PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N670FE)
Dated as of May 1, 1997
among
FEDERAL EXPRESS CORPORATION,
Lessee
PMCC LEASING CORPORATION,
Owner Participant
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as Owner Trustee,
Owner Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Indenture Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Pass Through Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Subordination Agent
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 777, REGISTRATION NO. N670FE
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
DEFINITIONS............................................................. 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds........................................ 4
Section 2.02. Certificates............................................. 5
Section 2.03. Owner Participant's Instructions to Owner Trustee........ 5
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent, Stipulated
Loss Values and Termination Values....................... 5
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date......................... 6
Section 3.02. Commitments to Participate in Purchase Price............. 6
Section 3.03. Owner Participant's Instructions to Owner Trustee........ 9
Section 3.04. Transaction Costs........................................ 9
Section 3.05. Postponement of Delivery Date............................ 9
Section 3.06. Closing.................................................. 11
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).......... 11
Section 4.02. Conditions Precedent (Delivery Date)..................... 20
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.... 28
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 28
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 29
Section 6.02. Offering by Lessee....................................... 35
Section 6.03. Certain Covenants of Lessee.............................. 35
Section 6.04. Survival of Representations and Warranties............... 43
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate................................................... 43
Section 7.02. Citizenship.............................................. 44
Section 7.03. Representations, Warranties and Covenants of Owner
Participant.............................................. 45
Section 7.04. Representations, Covenants and Warranties of SSB and the
Owner Trustee............................................ 50
Section 7.05. Representations, Warranties and Covenants of the Indenture
Trustee.................................................. 52
Section 7.06. Indenture Trustee's Notice of Default.................... 54
Section 7.07. Releases from Indenture.................................. 54
Section 7.08. Covenant of Quiet Enjoyment.............................. 54
Section 7.09. Pass Through Trustee's Representations and Warranties.... 54
Section 7.10. Survival of Representations, Warranties and Covenants.... 55
Section 7.11. Lessee's Assumption of the Certificates.................. 55
Section 7.12. Indebtedness of Owner Trustee............................ 57
Section 7.13. Compliance with Trust Agreement, Etc..................... 58
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants................................................ 58
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 60
Section 8.02. After-Tax Basis.......................................... 65
Section 8.03. Time of Payment.......................................... 66
Section 8.04. Contests................................................. 66
Section 8.05. Refunds.................................................. 69
Section 8.06. Lessee's Reports......................................... 69
Section 8.07. Survival of Obligations.................................. 70
Section 8.08. Payment of Taxes......................................... 70
Section 8.09. Reimbursements by Indemnitees Generally.................. 70
Section 8.10. Special Indemnity........................................ 70
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 71
Section 9.02. After-Tax Basis.......................................... 74
Section 9.03. Subrogation.............................................. 75
Section 9.04. Notice and Payment....................................... 75
Section 9.05. Refunds.................................................. 75
Section 9.06. Defense of Claims........................................ 76
Section 9.07. Survival of Obligations.................................. 77
Section 9.08. Effect of Other Indemnities.............................. 77
Section 9.09. Interest................................................. 77
Section 9.10. Special Indemnity........................................ 78
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 78
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 80
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 82
Section 12.02. Interest of Holders of Certificates..................... 82
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 82
Section 13.02. Further Assurances...................................... 83
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment.......................................... 83
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 83
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 84
Section 15.02. Reoptimization.......................................... 88
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 89
Section 17.02. Collateral Account...................................... 89
Section 17.03. Counterparts............................................ 90
Section 17.04. No Oral Modifications................................... 90
Section 17.05. Captions................................................ 91
Section 17.06. Successors and Assigns.................................. 91
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and the
Pass Through Trustee.................................... 91
Section 17.08. Severability............................................ 92
Section 17.09. Public Release of Information........................... 92
Section 17.10. Certain Limitations on Reorganization................... 92
Section 17.11. GOVERNING LAW........................................... 93
Section 17.12. Section 1110 Compliance................................. 93
Section 17.13. Reliance of Liquidity Providers......................... 93
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 93
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Debt Portion
EXHIBIT A(1)(a)(i) Opinion of Lessee's Counsel
(Certificate Closing Date)
EXHIBIT A(1)(a)(ii) Opinion of Lessee's Counsel
(Delivery Date)
EXHIBIT A(1)(b)(i) Opinion of Lessee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(1)(b)(ii) Opinion of Lessee's Special Counsel
(Delivery Date)
EXHIBIT A(2)(a) Opinion of Owner Participant's and Owner Participant
Guarantor's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's and Owner Participant
Guarantor's Counsel
EXHIBIT A(3) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(4)(a)(i) Opinion of Owner Trustee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(4)(a)(ii) Opinion of Owner Trustee's Special Counsel
(Delivery Date)
EXHIBIT A(5) Opinion of Pass Through Trustee's and Subordination
Agent's Special Counsel
EXHIBIT A(6)(a) Opinion of Liquidity Provider's Counsel
EXHIBIT A(6)(b) Opinion of Liquidity Provider's Special Counsel
EXHIBIT A(7) Opinion of Engine Manufacturer's Counsel
EXHIBIT A(8) Opinion of Manufacturer's and AVSA's Counsel
EXHIBIT A(9) Opinion of Special Aviation Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Purchase Agreement Assignment, Consent and
Agreement, AVSA Consent and Agreement
EXHIBIT F Form of Engine Warranty Assignment and Engine Consent
EXHIBIT G-1 Form of Assignment and Assumption Agreement
EXHIBIT G-2 Form of Owner Participant Guaranty
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N670FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N670FE) dated as of May 1, 1997 (this "Agreement") among FEDERAL EXPRESS
CORPORATION, a Delaware corporation (herein, together with its successors and
permitted assigns, the "Lessee"), PMCC LEASING CORPORATION, a Delaware
corporation (herein, together with its successors and permitted assigns, the
"Owner Participant"), STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as owner
trustee under the Trust Agreement referred to below (in such capacity as
trustee, together with its successors and permitted assigns, the "Owner
Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as otherwise expressly
stated herein, but solely as indenture trustee under the Indenture referred to
below (in such capacity as trustee, together with its successors and permitted
assigns, the "Indenture Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity, except as
otherwise expressly stated herein, but solely as pass through trustee of three
separate Pass Through Trusts (in such capacity as trustee, together with its
successors and permitted assigns, the "Pass Through Trustee"), and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but solely as
subordination agent (in such capacity as trustee, together with its successors
and permitted assigns, the "Subordination Agent").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article 1 hereof.
WHEREAS, the Owner Participant has entered into the Trust Agreement
with the Owner Trustee in its individual capacity, substantially in the form
of Exhibit D hereto, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Lessor's Estate for the benefit of the
Owner Participant on the terms specified in the Trust Agreement, subject to
the Lien of the Indenture.
WHEREAS, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of Pass Through Certificates issued by
each Pass Through Trust, an allocable amount of the proceeds of which
offering will be used by the Pass Through Trustee to purchase for each such
Pass Through Trust the Certificates of the Series and Maturity applicable
thereto.
WHEREAS, on the Certificate Closing Date, the Owner Trustee and the
Indenture Trustee will enter into the Indenture for the benefit of the Pass
Through Trustee, pursuant to which the Owner Trustee is issuing the
Certificates to the Subordination Agent on behalf of the Pass Through Trustee
as evidence of the loans made by the Pass Through Trustee to the Owner
Trustee, the proceeds of which loans will be deposited by the Indenture
Trustee on behalf of the Owner Trustee in the Collateral Account.
WHEREAS, concurrently with the execution and delivery hereof, (i)
Kredietbank N.V., acting through its New York Branch will enter into two
revolving credit agreements (each, a "Liquidity Facility"), one for the
benefit of the holders of Pass Through Certificates of each of the Pass
Through Trusts for the Series A Certificates and the Series B Certificates,
with the Subordination Agent, as agent for the Pass Through Trustee on behalf
of each such Pass Through Trust; and (ii) the Pass Through Trustee, each
Liquidity Provider and the Subordination Agent will enter into the
Intercreditor Agreement.
WHEREAS, the Certificates will be held by the Subordination Agent
pursuant to the Intercreditor Agreement on behalf of the Pass Through Trustee
for each of the Pass Through Trusts.
WHEREAS, prior to the Delivery Date, the Certificates will be secured
by the Liquid Collateral.
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee will be authorized and directed by the Owner Participant:
(a) on the Delivery Date, to purchase the Aircraft from AVSA;
(b) on the Certificate Closing Date, to execute and deliver the
Lease substantially in the form of Exhibit B hereto, pursuant to which,
subject to the terms and conditions set forth in said Lease, the Owner
Trustee agrees to lease to the Lessee, and the Lessee agrees to lease from
the Owner Trustee, the Aircraft on the Delivery Date, such lease to be
effected by the execution and delivery on the Delivery Date of a Lease
Supplement, in the form of Exhibit A to the Lease, covering the Aircraft
and incorporating by reference all of the terms of the Lease;
(c) on the Certificate Closing Date, to execute and deliver the
Indenture, substantially in the form of Exhibit C hereto, for the benefit
of the Holders from time to time of the Certificates, pursuant to which the
Owner Trustee agrees, among other things, (A) to deposit, mortgage and
pledge with the Indenture Trustee, as part of the Trust Indenture Estate,
all of the Lessor's Estate but not Excepted Payments, (B) on the
Certificate Closing Date, to issue Certificates substantially in the form
set forth in Exhibit B to the Indenture, the proceeds of the sale of which
will be held by the Indenture Trustee on behalf of the Owner Trustee in
the Collateral Account until released in accordance with the terms
hereof and of the Indenture, and (C) on the Delivery Date, to execute
and deliver the Indenture and Security Agreement Supplement,
substantially in the form of Exhibit A to the Indenture, covering the
Aircraft and supplementing the Indenture;
(d) on the Certificate Closing Date, to execute and deliver the
Purchase Agreement Assignment, whereby the Lessee assigns to the Owner
Trustee the right to purchase the Aircraft from AVSA and certain of the
Lessee's rights and interests under the Purchase Agreement and the Consent
and Guaranty to the extent that the same relate to the Aircraft (except to
the extent reserved in said Purchase Agreement Assignment), which Purchase
Agreement Assignment is to include as an annex a Consent and Agreement
executed by the Manufacturer and the AVSA Consent and Agreement executed by
AVSA, said Purchase Agreement Assignment, Consent and Agreement and AVSA
Consent and Agreement to be substantially in the form of Exhibit E hereto;
and
(e) on the Certificate Closing Date, to execute and deliver the
Engine Warranty Assignment, whereby the Lessee assigns to the Owner Trustee
certain of the Lessee's rights and interests under the GTA to the extent
that the same relate to the Engines (except to the extent reserved in the
Engine Warranty Assignment), which Engine Warranty Assignment is to include
as an annex an Engine Consent executed by the Engine Manufacturer, said
Engine Warranty Assignment and Engine Consent to be substantially in the
form of Exhibit F hereto.
WHEREAS, on the Delivery Date pursuant to and subject to the terms
and conditions of this Agreement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇
of Sale and the Airbus Guaranty, the Owner Trustee will purchase, and
receive title to, the Aircraft from AVSA and lease the Aircraft to the
Lessee pursuant to the Lease.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth in Schedule II hereto are incorporated herein for all purposes of this
Agreement and shall be equally applicable to both the singular and the plural
forms of the terms so defined.
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement, shall
enter into the Series Supplements, and, subject to the terms and conditions
set forth therein, on the Pass Through Closing Date (i) the Lessee shall
direct the Underwriters to execute a wire transfer or intra-bank transfer to
the Pass Through Trustee in the amount of the total proceeds payable pursuant
to the Underwriting Agreement with respect to the Pass Through Certificates
and (ii) the Pass Through Trustee shall deliver the Pass Through Certificates
to the Underwriters upon receipt by the Pass Through Trustee of such proceeds.
(b) Subject to the satisfaction or waiver of the conditions set
forth herein, on the Certificate Closing Date, on behalf of each Pass Through
Trust, from an allocable amount of the proceeds of the sale of the related
Pass Through Certificates, the Pass Through Trustee shall purchase the
Certificates specified for such Pass Through Trust on Schedule I hereto. For
each Pass Through Trust, the Pass Through Trustee shall pay an amount equal to
the principal amount of Certificates of the Series and Maturity that relates
to such Pass Through Trust, which amounts in the aggregate shall equal the
aggregate principal amount of the Certificates as specified in Section 2.04 of
the Indenture. The aggregate amount payable by the Pass Through Trustee
pursuant to this Section 2.01(b) shall be payable by wire transfer or
intra-bank transfer to the Indenture Trustee on behalf of the Owner Trustee.
(c) On the Certificate Closing Date, the Indenture Trustee shall,
on behalf of the Owner Trustee, deposit, by wire transfer or intra-bank
transfer, the amounts received by it pursuant to Section 2.01(b) hereof in the
Collateral Account pursuant to the Indenture.
(d) On the Certificate Closing Date concurrently with the events
specified in Section 2.01(b) hereof, the parties hereto shall execute and
deliver, to the extent they are parties thereto, and consent to the execution
and delivery of (if they are not parties thereto), the Lease (other than the
Lease Supplement), the Indenture (other than the Indenture and Security
Agreement Supplement), and the other documents listed in Section 4.01(d)
hereof, and the Owner Trustee shall execute and deliver to the Indenture
Trustee for authentication, and the Indenture Trustee shall authenticate and
deliver to the Subordination Agent on behalf of the Pass Through Trustee for
each of the Pass Through Trusts, upon the request of the Owner Trustee, the
Certificates as provided in Section 2.02 hereof.
(e) The Closings shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 2.02. Certificates. Subject to the satisfaction or waiver
of the conditions set forth herein, on the Certificate Closing Date, the Owner
Participant will instruct the Owner Trustee to execute and deliver to the
Indenture Trustee, and the Indenture Trustee shall authenticate and deliver,
upon the request of the Owner Trustee, to the Subordination Agent on behalf of
the Pass Through Trustee for each of the Pass Through Trusts, the Certificates
specified for such Pass Through Trust on Schedule I attached hereto, which (i)
shall be issued in the principal amount and in the Series and Maturity set
forth for such Certificate in Schedule I hereto, (ii) shall bear interest at
the interest rate set forth for such Certificate in Schedule I hereto, (iii)
shall be issued in such form and on such terms as are specified in the
Indenture, (iv) shall be dated and authenticated on the Certificate Closing
Date and shall bear interest from the Certificate Closing Date and (v) shall
be registered in the name of the Subordination Agent on behalf of the Pass
Through Trustee for such Pass Through Trust.
Section 2.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the issuance of Certificates in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the action specified in Section 1.01 (other than clauses (a) and
(c)) of the Trust Agreement and confirmation that all conditions to closing
in respect of the Certificate Closing Date set forth in Section 4.01 (but
not Section 4.02) hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values and Termination Values. On or prior to the Delivery
Date, the percentages for Basic Rent referred to in Schedule II of the Lease
and the percentages for Stipulated Loss Value and Termination Value in
Schedule III and Schedule IV, respectively, of the Lease shall be adjusted
(upward or downward), subject to the procedures set forth in Section 3.04 of
the Lease and the minimum values established by Section 3.05 of the Lease and
the definitions of Stipulated Loss Value and Termination Value, to reflect
changes in the pricing assumptions with respect to (i) the Delivery Date being
other than June 2, 1997, (ii) a different rate of interest or amortization
schedule assumed by the Owner Participant in calculating such percentages from
that assumed by the Owner Participant in originally calculating such
percentages, (iii) Transaction Costs being other than as assumed in Section
10.01 hereof, (iv) any change in the length of the Basic Term (but in no event
shall the Term exceed 23.25 years) and (v) a Change in Tax Law which occurs
after the date of the execution of this Agreement but on or prior to the
Delivery Date. Notwithstanding anything herein to the contrary, the Lessee
shall have no obligation to enter into the transaction contemplated by this
Agreement other than with respect to Transaction Costs as described in Section
2.03 below and its obligation to purchase the Aircraft as provided in Section
3.05(a) hereof if, as a result of a Change in Tax Law after the date of
execution of this Agreement but on or prior to the Delivery Date, the Net
Present Value of Rents is increased by 100 basis points or more.
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date. The Lessee agrees
to give the Owner Participant, the Indenture Trustee, the Owner Trustee and
the Pass Through Trustee at least three (3) Business Days' written or
facsimile notice prior to the Delivery Date (which notice shall be effective
only if received not later than 10:00 a.m. (New York City time) on the date
that is at least three (3) Business Days prior to the Delivery Date), which
Delivery Notice shall specify the amount of the Purchase Price, the amount of
the Owner Participant's Commitment, the Debt Portion, the Delivery Date for
the Aircraft, the serial number of the Airframe and each Engine, and the
Aeronautics Authority registration number for the Aircraft.
Section 3.02. Commitments to Participate in Purchase Price. (a)
Participation in Purchase Price. Subject to the terms and conditions of this
Agreement, on the Delivery Date, (i) subject to the proviso to this Section
3.02(a), the Indenture Trustee agrees to release the Debt Portion or such
lesser amount as may then be held in the Collateral Account together with the
Lessee Shortfall (as defined in clause (iii) below), if any, to the Owner
Trustee for application to the Purchase Price as provided below, (ii) the
Owner Participant agrees to participate in the Lessor's payment of the
Purchase Price by making an investment in the beneficial ownership of the
Lessor's Estate in an amount equal to the amount set forth in Ancillary
Agreement II, (iii) subject to the proviso to this Section 3.02(a), the Lessee
agrees to pay to the Indenture Trustee the excess, if any, of (I) the Debt
Portion over (II) such amount as may then be held in the Collateral Account
(the "Lessee Shortfall") as provided in Section 17.02(a) hereof, and (iv)
pursuant to the Purchase Agreement as assigned pursuant to the Purchase
Agreement Assignment, AVSA shall sell the Aircraft to the Owner Trustee and
the Owner Trustee shall immediately thereafter lease the Aircraft to the
Lessee pursuant to the Lease. In consideration for the assignment to the
Owner Trustee by the Lessee under the Purchase Agreement Assignment of the
Lessee's right to purchase the Aircraft for the remaining balance due under
the Purchase Agreement and for the transfer of title to the Aircraft from
AVSA to the Owner Trustee, the following cash payments will be made by wire
transfer of immediately available funds on the Delivery Date: (A) by the
Owner Trustee to AVSA, an amount equal to the remaining balance due to AVSA
under the Purchase Agreement for the Aircraft, as evidenced by the Invoice,
or if the proviso to this Section 3.02(a) is applicable, such amount as it
shall have received from the Owner Participant not to exceed such remaining
balance due to AVSA, (B) by the Owner Trustee to the Lessee, an amount
equal to the Purchase Price (or if the proviso to this Section 3.02(a) is
applicable, the amount received from the Owner Participant) minus the cash
payment to AVSA pursuant to clause (A) above and (C) by the Indenture
Trustee, on behalf of the Owner Trustee, to the Lessee the excess of any
amounts as may then be held in the Collateral Account over the Debt
Portion; provided, however, that if (1) the Delivery Date has been
postponed, (2) the investments contemplated by Section 2.14(b) of the
Indenture have been made, (3) such investments do not mature on the
rescheduled Delivery Date and (4) the Lessee elects not to break such
investments, then the Indenture Trustee shall not release amounts in the
Collateral Account to the Owner Trustee and the Lessee shall instead pay to
AVSA any balance of the Purchase Price remaining after payment to AVSA by
the Owner Trustee as contemplated by clause (A) above and the Indenture
Trustee shall pay to the Lessee at the end of the applicable investment
period referred to in Section 2.14(b) of the Indenture all amounts then
held in the Collateral Account.
(b) Payment of Commitment. The Owner Participant agrees with the
Lessee and only with the Lessee on behalf of the Owner Trustee, subject to the
terms and conditions of this Agreement, to make the amount of its Commitment
available for and on account of the Owner Trustee on the Delivery Date
specified in the Delivery Notice pursuant to Section 3.03 hereof by wire
transfer, initiated by 10:00 a.m. (New York City time on such day) of such
amount in immediately available funds, to the Owner Trustee for deposit in its
account at State Street Bank and Trust Company, Boston, Massachusetts, ABA
No. ▇▇▇-▇▇▇-▇▇▇, A/C No. ▇▇▇▇-▇▇▇-▇, Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, Re: FedEx
Equity Payments Account. The amount of the Owner Participant's Commitment
shall be held for the account of the Owner Participant by the Owner Trustee
until released by the Owner Participant or its special counsel at closing or
until returned to the Owner Participant in accordance with Section 3.02(c)
hereof.
(c) No Obligation to Increase Commitments; Delayed Delivery. (i) If
the Indenture Trustee shall default in its obligation to make the amount of
its Debt Portion available pursuant hereto, the Owner Participant shall have
no obligation to make any portion of such Debt Portion available or to
increase the amount of its Commitment, and the obligations of the Owner
Participant shall remain subject to the terms and conditions of this
Agreement, until no later than September 30, 1997.
(ii) Subject to the provisions of Section 3.05 hereof, if the closing
of the transactions contemplated by the Operative Agreements shall not have
been consummated by 2:00 p.m. (New York City time), or such earlier time as
directed by the Lessee, on the Scheduled Delivery Date, the Owner Trustee
shall, if instructed in writing by the Lessee, at the risk and expense of the
Lessee, use its reasonable best efforts to cause the Owner Participant's
Commitment to be invested and reinvested to the extent practicable at the
direction received by it from the Lessee (with a copy to the Owner
Participant), at the risk of the Lessee, in Permitted Investments consisting
of either commercial paper or time deposits; provided, however, that in the
absence of instructions by 2:00 p.m. (New York City time) the Owner Trustee
shall use its reasonable best efforts to cause such amount or the proceeds
thereof to be invested and reinvested to the extent practicable in overnight
Eurodollar time deposits. Earnings on any such investments shall be applied
to the Lessee's payment obligations, if any, to such Owner Participant
pursuant to the next succeeding paragraph, and the balance, if any, of such
earnings remaining after such application shall be paid in accordance with the
Lessee's written instructions.
If for any reason (i) the Operative Agreements shall not be executed
and delivered by the respective parties thereto and/or the delayed Delivery
Date shall not occur (whether by reason of a failure to meet a condition
precedent thereto set forth in Article 4 hereof or otherwise) on or before the
third Business Day after the Scheduled Delivery Date (or earlier if requested
by the Owner Participant) or, if earlier, the Cut-Off Date, or (ii) the Lessee
has notified the Owner Trustee (with a copy to the Owner Participant) prior to
2:00 p.m. (New York City time) on any date after the Scheduled Delivery Date
that it does not intend to go forward to close the transactions contemplated
hereby for such Delivery Date, the Owner Participant may cancel any funding
arrangements made to fund its Commitment on the Scheduled Delivery Date but
the Owner Participant's Commitment hereunder with respect to the Aircraft
shall not be terminated thereby until September 30, 1997, whereupon the
Owner Participant's Commitment hereunder shall terminate. On such third
Business Day (or such earlier date) or September 30, 1997, as the case may
be, or the earliest practicable Business Day thereafter, the Owner Trustee
shall return the amounts held by it hereunder to the Owner Participant,
provided that the Owner Trustee shall have had a reasonable time to
liquidate any Permitted Investments it has been authorized to invest in
pursuant to the preceding paragraph and to obtain the proceeds therefrom in
funds of the type originally received, and the Lessee shall pay interest on
such funds to the Owner Participant at the Debt Rate, such interest to be
payable for the period from and including such Scheduled Delivery Date to
but excluding the date such funds are returned to the Owner Participant in
accordance with the terms hereof; provided that if any such funds are
returned to the Owner Participant after 2:00 p.m. (New York City time) on
any such date, such funds shall be deemed for purposes of this paragraph to
have been returned on the next succeeding Business Day.
The Lessee shall reimburse the Owner Trustee on demand for any loss
incurred by the Owner Trustee as a result of the investment of funds by the
Owner Trustee in accordance with the terms of this Section 3.02(c). Further,
the Lessee shall indemnify the Owner Trustee and hold it harmless from and
against any cost or expense the Owner Trustee may incur as a result of any
investment of funds or transfer of funds referred to herein in accordance with
the terms hereof. The Owner Trustee shall not be liable for failure to invest
such funds except as otherwise provided herein or for any losses incurred on
such investments except for any losses arising out of its own gross negligence
or willful misconduct.
Section 3.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the release of its Commitment in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the actions specified in Sections 1.01(a) and (c) of the Trust
Agreement and confirmation that all conditions to closing set forth in
Section 4.02 hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 3.04. Transaction Costs. If the transactions contemplated
by this Article 3 are consummated, as and when any portion of Transaction
Costs becomes due and payable, the Owner Participant shall, as soon as
practicable upon receipt of bills or invoices for the amounts payable make
such payments or, if the Lessee shall have already made such payment, shall
reimburse the Lessee therefor or shall, as soon as practicable, furnish the
Owner Trustee funds sufficient to, and the Owner Trustee shall, as soon as
practicable, make payment of such portion to the Person or Persons entitled to
payment upon presentation to the Owner Trustee of bills or invoices for the
amount of such payment. If such transactions are not consummated, the Lessee
shall pay or cause to be paid all the Transaction Costs; provided, however
that if the failure of such transactions to be consummated is due to (i) a
failure of the Owner Participant to obtain investment approval to proceed with
the transaction contemplated hereby, (ii) a failure to negotiate the Operative
Agreements in good faith by the Owner Participant or (iii) a wrongful act by
the Owner Participant, the Lessee shall have no obligation to pay those costs
and expenses incurred directly by the Owner Participant in connection with the
transactions contemplated by this Agreement described in Sections 10.01(a)(i)
and (xi) hereof, but the Lessee shall be obligated to pay all other
Transaction Costs.
Section 3.05. Postponement of Delivery Date. (a) If the Owner
Participant shall for any reason fail or refuse to make the full amount of its
Commitment available on the Scheduled Delivery Date in accordance with the
terms of Section 3.02 hereof, the Owner Trustee will promptly give each party
confirmed facsimile notice thereof and the Lessee shall postpone the Delivery
Date for a period of not more than five (5) Business Days, but in no event
later than September 30, 1997. If the Owner Participant shall for any reason
fail or refuse to make the full amount of its Commitment available in
accordance with the terms of Section 3.02 hereof on such postponed Delivery
Date, (i) if the Owner Participant fails to make available its Commitment in
breach of its obligations under this Agreement, the Lessee shall cause the
Owner Participant to assign to another equity investor identified by the
Lessee its interest in the Lessor's Estate pursuant to Section 7.03(d) hereof
and (ii) if no such equity investor is identified, or if such equity investor
fails to close such transactions, or if the Owner Participant fails to make
available its Commitment for any other reason than as specified in clause (i)
above, the Owner Participant's interest in the Lessor's Estate shall be
automatically conveyed to the Lessee without any further action, and the
parties hereto shall take such actions as may be advisable or necessary to
give effect to such conveyance. From and after any such conveyance, the
Owner Participant's obligations hereunder and under the other Operative
Agreements shall cease. The exception to the Lessee's indemnity set forth
in clause (viii) of Section 9.01(b) hereof shall not be applicable to any
such conveyance other than a conveyance pursuant to clause (i) above. For
the avoidance of doubt, it is understood and agreed that if for any reason
other than the failure of the Manufacturer or AVSA to deliver the Aircraft,
the Lessee does not enter into the Lease Supplement with the Owner Trustee
on or prior to the Cut-Off Date, the Indenture Trustee and the Pass Through
Trustee agree that the Lessee shall purchase the Aircraft and assume all of
the obligations of the Owner Trustee under the Certificates upon
satisfaction of the requirements set forth in Section 4.02 hereof, as the
same may be modified by the provisions of Section 7.11 hereof and as
otherwise necessary to reflect a full recourse secured aircraft financing
of the Lessee. If the Lessee has identified an equity investor under the
circumstances set forth in clause (i) above, the Owner Participant agrees
to assign its interest in the Lessor's Estate as provided in said clause
(i). In case of any such conveyance pursuant to said clause (i) (but
subject to the satisfaction of the conditions precedent specified herein),
the Indenture Trustee shall release the Debt Portion or such lesser amount
as may then be held in the Collateral Account for application to the
payments contemplated in the last sentence of Section 3.02(a) hereof,
subject to the proviso to Section 3.02(a) hereof.
(b) Release of Obligations. If the Delivery Date has not occurred
on or prior to the Cut-Off Date (i) in the case of the Indenture Trustee and
the Pass Through Trustee, as a result of a failure of the Manufacturer or AVSA
to deliver the Aircraft, or (ii) in the case of the Owner Participant, for any
reason, then, in such event, the Owner Trustee shall not purchase the Aircraft
from AVSA, and the parties to the Operative Agreements shall have no further
obligations or liabilities under any of said Operative Agreements with respect
to the Aircraft, including the obligation of the Owner Participant to
participate in the payment of the Purchase Price, and such documents shall
terminate and have no further force or effect with respect to the Aircraft;
provided, however, that the Lessee shall provide, no later than the Cut-Off
Date, notice of prepayment to the Indenture Trustee and the Certificates shall
be prepaid on the 15th day following the Cut-Off Date as provided in Section
6.02(a)(vi) of the Indenture and Section 17.02(c) hereof and provided further,
that (i) the Lessee's obligation to pay any Transaction Costs as provided in
Section 3.04 hereof (to the extent such section is applicable) and to
indemnify such parties to the extent provided in such documents, shall not be
diminished or modified in any respect and (ii) the obligations of the Owner
Trustee, the Indenture Trustee and the Lessee to return funds and pay
interest, costs, expenses and other amounts thereon or in respect thereof as
provided in Section 3.02 hereof shall continue.
(c) Optional Postponement. Without limiting the provisions of
Section 3.02(c) hereof, the Scheduled Delivery Date may be postponed from time
to time (but in no event shall the Delivery Date be later than the Cut-Off
Date) for any reason, other than pursuant to Section 3.05(a) hereof, if the
Lessee gives the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Pass Through Trustee confirmed facsimile notice (or telephone notice
followed by written confirmation) of such postponement and notice of the date
to which the Delivery Date has been postponed, such notice of postponement to
be received by each party no later than 11:00 a.m. (New York City time) on the
Business Day preceding the Scheduled Delivery Date.
Section 3.06. Closing. The closing with respect to the purchase and
lease of the Aircraft on the Delivery Date shall take place at the offices of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date). The
obligations of the Owner Trustee, the Owner Participant, the Indenture
Trustee, the Subordination Agent and the Pass Through Trustee on behalf of
each Pass Through Trust to participate in the transactions contemplated hereby
on the Certificate Closing Date are subject to the fulfillment to the
satisfaction of such party (or waiver by such party), prior to or on the
Certificate Closing Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligations of any party):
(a) Certificates. (i) On the Certificate Closing Date, there shall
have been duly issued and delivered by the Owner Trustee to the
Subordination Agent on behalf of the Pass Through Trustee for each Pass
Through Trust, against payment therefor, a Certificate, substantially in
the form set forth in Exhibit B to the Indenture, duly authenticated, dated
the Certificate Closing Date and registered in the name of the
Subordination Agent, in the principal amounts, Series and Maturity, bearing
the interest rate and the other economic terms specified in the Series
Supplements and otherwise as provided in Section 2.04 of the Indenture.
The Pass Through Certificates shall be registered under the Securities Act,
any applicable state securities laws shall have been complied with, and the
Pass Through Agreement shall have been qualified under the Trust Indenture
Act, and (ii) on the Certificate Closing Date, the "Certificates" (as
defined in each of the Related Indentures) have been duly issued and
delivered by the "Owner Trustee" (as defined in each of the Related
Indentures) to the Subordination Agent on behalf of the Pass Through
Trustee for each Pass Through Trust.
(b) Legal Investment. On the Certificate Closing Date, no fact or
condition shall exist under applicable laws or regulations, or
interpretations of any such laws or regulations by applicable regulatory
authorities, which, in the opinion of the Owner Participant or its special
counsel, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee or their special counsel, would make it illegal for the Owner
Participant, the Lessee, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee, and no change in
circumstances shall have occurred which would otherwise make it illegal or
otherwise in contravention of guidance issued by regulatory authorities for
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through
Trustee, the Subordination Agent or the Indenture Trustee, to participate
in the transactions to be consummated on the Certificate Closing Date; and
no action or proceeding shall have been instituted nor shall governmental
action before any court, governmental authority or agency be threatened
which in the opinion of counsel for the Owner Participant, the Indenture
Trustee, the Subordination Agent or the Pass Through Trustee is not
frivolous, nor shall any order have been issued or proposed to be issued by
any court, or governmental authority or agency, as of the Certificate
Closing Date, to set aside, restrain, enjoin or prevent the consummation of
any of the transactions contemplated by this Agreement or by any of the
other Operative Agreements.
(c) Underwriters. The Underwriters shall have transferred the funds
specified in Section 2.01(a) hereof and all conditions thereunder shall
have been satisfied or waived.
(d) Documents. This Agreement and the following documents shall
have been duly authorized, executed and delivered by the respective
party or parties thereto, shall each be satisfactory in form and
substance to the Lessee, the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would
be a default thereunder, and copies executed or certified as requested
by the Lessee, the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee, the Subordination Agent or the Owner Participant, as
the case may be, of such documents shall have been delivered to the
Owner Participant, the Lessee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent and the Owner Trustee (provided that
the sole chattel-paper original of each of the Lease and each Ancillary
Agreement amendatory of the Lease, shall be delivered to the Indenture
Trustee):
(i) the Lease;
(ii) the Indenture;
(iii) in the case of the Owner Participant only, the Tax Indemnity
Agreement;
(iv) the Purchase Agreement and the Consent and Guaranty;
(v) the Purchase Agreement Assignment and the French Pledge
Agreement with respect thereto;
(vi) the GTA;
(vii) the Trust Agreement;
(viii) the Ancillary Agreement I;
(ix) the Ancillary Agreement II;
(x) the Owner Participant Guaranty;
(xi) the Intercreditor Agreement; and
(xii) the Liquidity Facility for each of the Pass Through Trusts for
the Series A Certificates and the Series B Certificates.
(e) Approvals. All approvals and consents of any trustees or
holders of any indebtedness or obligations of the Lessee, which in the
opinion of the Owner Participant, the Pass Through Trustee or the Indenture
Trustee are required in connection with any transaction contemplated by
this Agreement, shall have been duly obtained.
(f) Financing Statements. Uniform Commercial Code ("UCC") financing
statements covering all the security interests (and other interests)
intended to be created by or pursuant to the Granting Clause of the
Indenture shall have been executed and delivered by the Owner Trustee, as
debtor, and by the Indenture Trustee, as secured party, for and on behalf
of the Holders, and such financing statements shall have been duly filed or
duly submitted for filing in the State of Connecticut, and all other
actions shall have been taken which, in the opinion of the Owner
Participant, the Pass Through Trustee and the Underwriters, are necessary
to perfect and protect such security interests and other interests.
(g) Corporate Documents. Except when such Person is the delivering
party, the Owner Participant, the Owner Trustee, the Pass Through Trustee,
the Lessee and the Indenture Trustee (acting directly or by authorization
to its counsel) shall have received the following, in each case in form and
substance satisfactory to it:
(i) a copy of the certificate of incorporation and by-laws of the
Lessee, certified by the Secretary or an Assistant Secretary of the
Lessee as of the Certificate Closing Date, and a copy of the minutes
of the regular meeting of the board of directors of the Lessee,
certified as such as of the Certificate Closing Date by such
Secretary or Assistant Secretary, duly authorizing the lease by the
Lessee of the Aircraft under the Lease and the execution, delivery
and performance by the Lessee of this Agreement, the Lease, the Tax
Indemnity Agreement, the Pass Through Agreement, the Series
Supplements, the other Operative Agreements to which the Lessee is
or is to be a party and each other document to be executed and
delivered by the Lessee in connection with the transactions
contemplated hereby;
(ii) a copy of the articles of incorporation and bylaws of the
Owner Participant and the Owner Participant Guarantor, certified by
the Secretary or an Assistant Secretary of the Owner Participant or
the Owner Participant Guarantor as of the Certificate Closing Date,
and a copy of the resolutions of the board of directors of the Owner
Participant, certified as such as of the Certificate Closing Date by
such Secretary or an Assistant Secretary, authorizing the execution
and delivery by the Owner Participant of this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative
Agreements to which the Owner Participant is or is to be a party and
each other document to be executed and delivered by the Owner
Participant in connection with the transactions contemplated hereby,
and a copy of the resolutions of the board of directors of the Owner
Participant Guarantor, certified as such as of the Certificate
Closing Date by the Secretary or an Assistant Secretary, authorizing
the execution and delivery by the Owner Participant Guarantor of the
Owner Participant Guaranty and the other Operative Agreements to
which such Owner Participant Guarantor is or is to be a party and
each other document to be executed and delivered by the Owner
Participant Guarantor in connection with the transactions
contemplated hereby;
(iii) a copy of the articles of association and by-laws and other
instruments of the Owner Trustee, certified by the Secretary or an
Assistant Secretary of the Owner Trustee as of the Certificate
Closing Date (or other like instruments satisfactory to the Lessee
and the Owner Participant) and evidence authorizing the execution,
delivery and performance by the Owner Trustee in its individual
capacity or as Owner Trustee, as the case may be, of this Agreement,
the Trust Agreement and each of the other Operative Agreements to
which it is or is to be a party, whether in its individual capacity
or as Owner Trustee, and each other document to be executed and
delivered by the Owner Trustee in connection with the transactions
contemplated hereby;
(iv) a copy of the articles of association and by-laws and
other instruments of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture Trustee as of
the Certificate Closing Date (or other like instruments
satisfactory to the Lessee and the Owner Participant) and evidence
authorizing the execution, delivery and performance by the
Indenture Trustee of each of this Agreement, the Indenture and
each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by
the Indenture Trustee in connection with the transactions
contemplated hereby;
(v) a copy of the articles of association and by-laws and other
instruments of the Pass Through Trustee, certified by the Secretary
or an Assistant Secretary of the Pass Through Trustee as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Pass Through Trustee of
this Agreement, the Pass Through Agreement, the Series Supplements
and each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by the
Pass Through Trustee in connection with the transactions contemplated
hereby;
(vi) a copy of the articles of association and by-laws and other
instruments of the Subordination Agent, certified by the Secretary or
an Assistant Secretary of the Subordination Agent as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Subordination Agent of
this Agreement, the Intercreditor Agreement and each of the other
Operative Agreements to which it is or is to be a party, and each
other document to be executed and delivered by the Subordination
Agent in connection with the transactions contemplated hereby; and
(vii) such other documents, evidences, materials, and information
with respect to the Lessee, the Owner Trustee, the Indenture Trustee,
the Pass Through Trustee and the Owner Participant as the Indenture
Trustee, the Pass Through Trustee or the Owner Participant may
reasonably request in order to establish the consummation of the
transactions contemplated by this Agreement.
(h) Officer's Certificate of Lessee. On the Certificate Closing
Date, the following statements shall be true, and the Owner Participant,
the Owner Trustee, the Pass Through Trustee and the Indenture Trustee shall
have received a certificate signed by the Vice President and Treasurer or
any other duly authorized officer of the Lessee, dated the Certificate
Closing Date, stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(i) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Certificate Closing Date, the following statements shall
be true, and the Lessee, the Pass Through Trustee, the Owner Trustee and
the Indenture Trustee shall have received a certificate from (i) the Owner
Participant, signed by a duly authorized officer of the Owner Participant
dated the Certificate Closing Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto, are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(j) Other Officer's Certificates. On the Certificate Closing Date,
the following statements shall be true, and the Lessee, the Pass Through
Trustee, the Owner Trustee, the Subordination Agent and the Indenture
Trustee shall have received a certificate from each of SSB and the Owner
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Indenture Trustee), FSB and the Indenture
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Owner Trustee), FSB and the Pass Through
Trustee (in the case of the Lessee, the Indenture Trustee, the
Subordination Agent and the Owner Trustee) and FSB and the Subordination
Agent (in the case of the Lessee, the Pass Through Trustee, the Indenture
Trustee and the Owner Trustee), signed by a duly authorized officer of SSB
and FSB, respectively, dated the Certificate Closing Date, stating with
respect to SSB and the Owner Trustee, with respect to FSB and the Indenture
Trustee, with respect to FSB and the Pass Through Trustee or with respect
to FSB and the Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Certificate
Closing Date as though made on and as of such date (except to the
extent that such representations and warranties relate solely to
an earlier date, in which case such certificate shall state that
such representations and warranties were true and correct on and
as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens.
(k) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Certificate Closing Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(a) hereto and the General Counsel's Office of the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(b) hereto, each addressed to the Underwriters, the Owner
Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee, each Liquidity Provider and the Lessee;
(iii) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Indenture
Trustee, in the form of Exhibit A(3) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(iv) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(i) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(v) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(vi) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Pass Through
Trustee and the Subordination Agent, in the form of Exhibit A(5)
hereto and addressed to the Underwriters, the Owner Participant, the
Indenture Trustee, the Owner Trustee, the Pass Through Trustee, each
Liquidity Provider and the Lessee; and
(vii) ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal Department of
Kredietbank N.V., in the form of Exhibit A(6)(a) hereto, and Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel for the Liquidity Providers,
in the form of Exhibit A(6)(b) hereto, each addressed to the Pass
Through Trustee, the Subordination Agent, each Liquidity Provider and
the Lessee.
(l) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(m) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(n) Other Agreements. The Lessee and the Pass Through Trustee
shall have entered into the Pass Through Agreement and the Series
Supplements, all conditions to the effectiveness of each thereof shall
have been satisfied or waived, and the Pass Through Certificates shall
have been issued pursuant to the Series Supplements. The Lessee and the
Underwriters shall have entered into the Underwriting Agreement, all
conditions to the effectiveness thereof shall have been satisfied or
waived, and the Pass Through Certificates shall have been delivered
pursuant to the Underwriting Agreement. All conditions to the
effectiveness of each Liquidity Facility shall have been satisfied or
waived.
(o) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements
referred to in subparagraph (f) of this Section 4.01, or in connection with
the issuance of the Certificates shall have been duly paid or caused to be
paid in full; and (B) all sales or use taxes and duties related to the
consummation of the transactions contemplated by the Operative Agreements
on the Certificate Closing Date which are then due and payable shall have
been duly paid in full.
(p) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Certificate Closing Date in connection with the transactions contemplated
by this Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Certificate Closing Date in
connection with the transactions contemplated by this Agreement shall have
been issued, and all such permits shall be in full force and effect on the
Certificate Closing Date.
(q) Section 131.3 of the New York State Banking Law Filing. SSB
shall have delivered evidence of its filing made with the New York
Superintendent of Banking pursuant to Section 131.3 of the New York State
Banking Law.
Section 4.02. Conditions Precedent (Delivery Date). Subject to the
last paragraph of this Section 4.02, the obligations of the Owner Trustee, the
Owner Participant, the Indenture Trustee, the Subordination Agent and the Pass
Through Trustee on behalf of each Pass Through Trust to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of each party (or waiver by such party), prior
to or on the Delivery Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligation of any party):
(a) Notice, Etc. Each party hereto shall have received a Delivery
Notice pursuant to Section 3.01 hereof at least three (3) Business Days
prior to the Delivery Date.
(b) Legal Investment. No change shall have occurred after the
Certificate Closing Date and on or prior to the Delivery Date in applicable
laws or regulations, or interpretations of any such laws or regulations by
applicable regulatory authorities, which, in the opinion of the Owner
Participant or its special counsel, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee or their special counsel,
would make it illegal for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, and no change in circumstances shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance issued
by regulatory authorities for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, to participate in the transactions to be consummated on the
Delivery Date; and no action or proceeding shall have been instituted nor
shall governmental action before any court, governmental authority or
agency be threatened which in the opinion of counsel for the Owner
Participant, the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee is not frivolous, nor shall any order have been issued or
proposed to be issued by any court, or governmental authority or agency, as
of the Delivery Date, to set aside, restrain, enjoin or prevent the
consummation of any of the transactions contemplated by this Agreement or
by any of the other Operative Agreements.
(c) Documents. The documents referred to in Section 4.01(d) hereof
shall each be in full force and effect and the following documents shall
have been duly authorized, executed and delivered by the respective party
or parties thereto, shall each be satisfactory in form and substance to the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee,
the Subordination Agent and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would be
a default thereunder, and copies executed or certified as requested by the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee
or the Owner Participant, as the case may be, of such documents shall have
been delivered to the Owner Participant, the Lessee, the Indenture Trustee,
the Pass Through Trustee and the Owner Trustee (provided that the sole
chattel-paper original of the Lease Supplement shall be delivered to the
Indenture Trustee):
(i) the Lease Supplement covering the Aircraft, dated the Delivery
Date;
(ii) an Indenture and Security Agreement Supplement covering the
Aircraft, dated the Delivery Date;
(iii) the Invoice;
(iv) AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale and the
Airbus Guaranty;
(v) the Consent and Agreement and the AVSA Consent and Agreement;
and
(vi) the Engine Warranty Assignment and the Engine Consent.
(d) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Delivery Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(iii) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(ii) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(iv) counsel for the Engine Manufacturer, in the form of Exhibit
A(7) hereto and addressed to the Underwriters, the Owner Participant,
the Indenture Trustee, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Lessee;
(v) ▇▇▇▇▇▇▇▇ Chance, special counsel for AVSA and the
Manufacturer, in the form of Exhibit A(8) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(vi) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special aviation counsel, in
the form of Exhibit A(9) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee; and
(vii) in the case of the Owner Participant only, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, tax counsel to the Owner Participant,
addressed to the Owner Participant, with respect to certain tax
matters.
(e) Title, Airworthiness and Registration. On the Delivery Date,
the following statements shall be true, and the Owner Participant, the
Indenture Trustee, the Pass Through Trustee and the Owner Trustee shall
have received evidence from the Lessee reasonably satisfactory to the
Owner Participant, the Indenture Trustee, the Pass Through Trustee and
the Owner Trustee to the effect that:
(i) the Owner Trustee has good and marketable title (subject to
filing and recording of AVSA's FAA ▇▇▇▇ of Sale with the Aeronautics
Authority) to the Aircraft, free and clear of Liens, except the
rights of the Owner Trustee and the Lessee under the Lease and the
Lease Supplement covering the Aircraft, the rights of the Indenture
Trustee under the Indenture and the beneficial interest of the Owner
Participant created by the Trust Agreement and the interest of the
Certificate Holders created by the Indenture and the Indenture and
Security Agreement Supplement covering the Aircraft, which evidence
shall include AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale
and the Airbus Guaranty;
(ii) the Aircraft has been duly certificated by the Aeronautics
Authority as to type and airworthiness in accordance with the terms
of the Operative Agreements;
(iii) AVSA's FAA ▇▇▇▇ of Sale, the Lease and Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft and the Trust Agreement
shall have been duly filed for recordation (or shall be in the
process of being so duly filed for recordation) with the Aeronautics
Authority pursuant to the Transportation Code; and
(iv) application to the Aeronautics Authority for registration of
the Aircraft in the name of the Owner Trustee shall have been duly
made and the Lessee shall have temporary or permanent authority to
operate the Aircraft.
(f) Financing Statements. A UCC notice filing describing the Lease
as a lease shall have been executed and delivered by the Owner Trustee, as
lessor, and the Lessee, as lessee (which filing shall name the Indenture
Trustee as assignee of the Owner Trustee) and shall have been duly filed in
the State of Tennessee.
(g) Payments. The Owner Participant shall have made available its
Commitment to the Owner Trustee and the other payments contemplated by
Section 3.02 hereof shall have been made.
(h) Report of Aircraft Expert. The Owner Participant shall have
received a report prepared by BK Associates, Inc. addressed to the Owner
Participant (with an abbreviated report to the Lessee) which report shall
be in form and substance satisfactory to the Owner Participant to the
effect, among other things, that on the Delivery Date:
(i) (A) the estimated fair market value of the Aircraft net of
any cost to the Owner Participant or the Owner Trustee of return at
the end of the Basic Term and any Fixed Renewal Term (determined
without including in such value any increase or decrease for
inflation or deflation during the Term) is equal to or greater than
20% of the Purchase Price for the Aircraft and (B) at least 20% of
the useful economic life of the Aircraft will be remaining at the end
of the Basic Term and any Fixed Renewal Term;
(ii) the estimated useful life of the Aircraft is at least 133% of
the Basic Term and any Fixed Renewal Term;
(iii) the Purchase Price of the Aircraft is no greater than the
fair market value of the Aircraft on the Delivery Date;
(iv) on the Delivery Date, the Aircraft will not require any
modifications, improvements or additions in order to be rendered
complete for its intended purpose by the Lessee;
(v) the amount payable by the Lessee upon the exercise of its
purchase option pursuant to Section 4.02(a)(F) of the Lease equals or
exceeds the currently estimated Fair Market Value of the Aircraft on
such date (taking into account inflation or deflation to such date);
and
(vi) the Aircraft is not limited use property.
(i) Insurance. Each of the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee and the Owner Participant shall have received
such evidence as it deems appropriate, including, without limitation, an
independent insurance broker's report, together with certificates of
insurance from such broker, in form and substance satisfactory to the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee and the
Owner Participant to establish that the insurance required by Article 13 of
the Lease is in effect.
(j) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements and
the documents and instruments referred to in subparagraphs (e) and (f) of
this Section 4.02, or in connection with the purchase of the Aircraft by
the Owner Trustee and the making by the Owner Participant of its equity
investment shall have been duly paid or caused to be paid in full; and (B)
all sales or use taxes and duties related to the consummation of the
transactions contemplated by the Operative Agreements on the Delivery Date
which are then due and payable shall have been duly paid in full.
(k) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(l) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease (assuming, for this purpose, that the provisions
of Article 16 of the Lease had become operative on the Certificate Closing
Date and not the Delivery Date) or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(m) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Delivery Date in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Delivery Date in connection with
the transactions contemplated by this Agreement shall have been issued, and
all such permits shall be in full force and effect on the Delivery Date.
(n) Officer's Certificate of Lessee. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received a certificate signed by the Vice President and Treasurer or any
other duly authorized officer of the Lessee, dated the Delivery Date,
stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(o) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Delivery Date, the following statements shall be true,
and the Lessee, the Pass Through Trustee, the Owner Trustee and the
Indenture Trustee shall have received a certificate from the Owner
Participant, signed by a duly authorized officer of (i) the Owner
Participant dated the Delivery Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement (excluding the Tax Indemnity Agreement) to which
it is a party and in any certificate delivered pursuant hereto or
thereto, are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(p) Other Officer's Certificates. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Lessee,
the Pass Through Trustee, the Owner Trustee, the Subordination Agent and
the Indenture Trustee shall have received a certificate from each of SSB
and the Owner Trustee (in the case of the Lessee, the Pass Through Trustee,
the Owner Participant, the Subordination Agent and the Indenture Trustee),
FSB and the Indenture Trustee (in the case of the Lessee, the Pass Through
Trustee, the Owner Participant, the Subordination Agent and the Owner
Trustee), FSB and the Pass Through Trustee (in the case of the Lessee, the
Indenture Trustee, the Owner Participant, the Subordination Agent and the
Owner Trustee) and FSB and the Subordination Agent (in the case of the
Lessee, the Indenture Trustee, the Owner Participant, the Pass Through
Trustee and the Owner Trustee) signed by a duly authorized officer of SSB
and FSB, respectively, dated the Delivery Date, stating with respect to SSB
and the Owner Trustee, with respect to FSB and the Indenture Trustee, with
respect to FSB and the Pass Through Trustee or with respect to FSB and the
Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Delivery Date
as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens affecting the Trust
Indenture Estate or the Lessor's Estate or any part thereof.
(q) Release of Debt Portion. The Indenture Trustee shall have
released the Debt Portion from (or such lesser amount as may then be held
in) the Collateral Account or if the proviso to Section 3.02(a) is
applicable, then the Lessee shall have made the payment required to be made
to AVSA pursuant to such proviso.
Notwithstanding anything else to the contrary in this Section 4.02, it shall
not be a condition precedent to the obligations of the Indenture Trustee, the
Pass Through Trustee or the Subordination Agent that the conditions in Section
4.02(n) and (o) be satisfied if the Lessee certifies that the failure to
fulfill such condition precedent is not reasonably likely to materially
adversely affect the holders of Pass Through Certificates and, in the event of
such failure, there has been delivered to the Indenture Trustee written
confirmation from both ▇▇▇▇▇'▇ and S&P of the rating on any class of Pass
Through Certificates.
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.
Promptly upon the registration of the Aircraft and the filing and, where
appropriate, recordation pursuant to the Transportation Code, of AVSA's FAA
▇▇▇▇ of Sale, the Trust Agreement, the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security Agreement
Supplement covering the Aircraft attached as exhibits) and the Indenture (with
the Indenture and Security Agreement Supplement covering the Aircraft attached
as an exhibit), the Lessee shall cause Special Aviation Counsel to deliver to
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through Trustee
and the Indenture Trustee an opinion as to (i) the due registration of the
Aircraft in the name of the Owner Trustee, (ii) the due recording pursuant to
the Transportation Code of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Lease (with such Lease Supplement, the Indenture and such Indenture and
Security Agreement Supplement attached as exhibits), and the Indenture (with
such Indenture and Security Agreement Supplement attached as an exhibit), and
(iii), subject to customary qualifications, the lack of any intervening
documents with respect to the Aircraft.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby on
the Certificate Closing Date is subject to the conditions that, prior to or on
the Certificate Closing Date, the Lessee shall have received the certificates
and other documents which are referred to in, or the opinions to be addressed
to it under, as the case may be, paragraphs (d), (g)(ii)-(v), (i), (j),
(k)(ii)-(vi) of Section 4.01 hereof and the Underwriters shall have made
available the amounts required to be paid by them pursuant to Section 2.01
hereof, and the Lessee's obligation to participate in the transactions
contemplated hereby on the Delivery Date, is subject to the conditions that,
on or prior to the Delivery Date, the Lessee shall have received the documents
which are referred to in, or the opinions to be addressed to it under, as the
case may be, paragraphs (c) and (d)(ii)-(v) of Section 4.02 hereof and the
Indenture Trustee shall have released the Debt Portion from (or such lesser
amount as may then be held in) the Collateral Account.
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties. The Lessee
represents and warrants to the Owner Participant, the Owner Trustee (in its
individual capacity and as Owner Trustee), the Pass Through Trustee (in its
individual capacity and as Pass Through Trustee), each Liquidity Provider and
the Indenture Trustee (in its individual capacity and as Indenture Trustee)
that, on the date hereof and as of the Certificate Closing Date and the
Delivery Date (unless any such representation is specifically made as of one
date):
(a) the Lessee is a corporation duly organized and validly existing
and is in good standing under the laws of the State of Delaware with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) in Memphis, Tennessee,
and is duly qualified to do business as a foreign corporation and is in
good standing in all jurisdictions in which it has intrastate routes, or
offices or major overhaul facilities or in which other activities of the
Lessee require such qualification;
(b) the Lessee has full power, authority and legal right to conduct
its business and operations as currently conducted and to own or hold under
lease its Properties and to enter into and perform its obligations under
this Agreement, the other Operative Agreements to which it is a party, the
Pass Through Agreement and the Series Supplements (the "Lessee Documents");
(c) the Lessee is an "air carrier" within the meaning of the
Transportation Code and a holder of a certificate under Sections 41102(a)
and 41103 of the Transportation Code and a "citizen of the United States"
within the meaning of Section 40102(a)(15) of the Transportation Code
holding an "air carrier operating certificate" issued under Chapter 447 of
the Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and each such certificate is
in full force and effect;
(d) the Lessee possesses all necessary certificates, franchises,
licenses, permits, rights and concessions and consents (collectively
"permits") which are material to the operation of the routes flown by it
and the conduct of its business and operations as currently conducted and
each such permit is in full force and effect;
(e) the execution, delivery and performance of the Lessee Documents
by the Lessee have been duly authorized by all necessary corporate action
on the part of the Lessee and do not require any stockholder approval, or
approval or consent of any trustee or holder of any indebtedness or
obligations of the Lessee, and each such document has been duly executed
and delivered or, in the case of the Operative Agreements identified in
Section 4.02(c) hereof, will on the Delivery Date be executed and delivered
by the Lessee and constitutes (or will constitute, as the case may be) the
legal, valid and binding obligations of the Lessee enforceable against it
in accordance with the terms thereof except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws or equitable principles of general application to or affecting
the enforcement of creditors' rights generally (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(f) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body (other than the SEC) is required
for the execution, delivery or performance by the Lessee of the Lessee
Documents or for the use and maintenance of the Aircraft except for such
registrations, applications and recordings referred to in the opinions of
Special Aviation Counsel delivered or to be delivered pursuant to Sections
4.02(d)(iii) and 4.03 hereof and except for the filings referred to in
Sections 4.01(f) and 4.02(f) hereof, all of which shall have been duly
obtained or made and shall be in full force and effect on and as of the
Certificate Closing Date or the Delivery Date, or as contemplated by said
Sections;
(g) neither the execution, delivery or performance by the Lessee of
the Lessee Documents nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent (other than the Consent and Agreement, the AVSA
Consent and Agreement, the Engine Consent and the Consent and Guaranty) or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of the Lessee or any order,
writ, injunction or decree of any court or governmental authority against
the Lessee or by which it or any of its Properties is bound or any
indenture, mortgage or contract or other agreement or instrument to which
the Lessee is a party or by which it or any of its Properties is bound, or
constitutes or will constitute a default thereunder or results or will
result in the imposition of any Lien upon any of its Properties;
(h) there are no pending or, to the knowledge of the Lessee,
threatened actions, suits, investigations or proceedings (whether or not
purportedly on behalf of the Lessee) against or affecting the Lessee or any
of its Property before or by any court or administrative agency which (A)
involve the Aircraft, (B) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the fiscal year
ended May 31, 1996 (as updated by Note 7 to the financial statements
included in the Lessee's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (ii) in the Lessee's Current Reports on Form 8-K dated June 7, 1996,
August 16, 1996 and March 4, 1997, as to which no representation is made
concerning the Lessee's liability (if any) or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, if adversely determined, would materially and
adversely affect the consolidated financial condition, business or
operations of the Lessee, or (C) if adversely determined would adversely
affect the ability of the Lessee to perform its obligations under the
Lessee Documents;
(i) the Lessee has filed or caused to be filed all tax returns which
are required to be filed and has paid or caused to be paid all taxes shown
to be due and payable pursuant to such returns or pursuant to any
assessment received by the Lessee (other than assessments the payment of
which is being contested in good faith by the Lessee by appropriate
proceedings that do not involve any material danger of sale, forfeiture or
loss of the Aircraft or any part thereof), and the Lessee has no knowledge
of any related actual or proposed deficiency or additional assessment which
either in any case or in the aggregate would materially adversely affect
the Lessee's consolidated financial condition (other than, in any such case,
assessments, the payment of which is being contested in good faith by the
Lessee, as to which no representation is made concerning the Lessee's
liability (if any) or the effect of any adverse determination upon the
Lessee's consolidated financial condition);
(j) except for (A) the registration in the Owner Trustee's name of
the Aircraft pursuant to the Transportation Code to be accomplished by
filing with the FAA, of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Affidavits and the Application, (B) the filing with and, where appropriate,
recordation by the FAA pursuant to the Transportation Code of the
Indenture, the Indenture and Security Agreement Supplement covering the
Aircraft, the Lease and the Lease Supplement covering the Aircraft, (C) the
filing of the financing statements referred to in Sections 4.01(f) and
4.02(f) hereof and (D)(x) on the Certificate Closing Date, the taking of
possession by the Indenture Trustee of the Liquid Collateral and
maintaining possession by the Indenture Trustee thereof as contemplated in
Section 2.14(a) of the Indenture and (y) on the Delivery Date, the taking
of possession by the Indenture Trustee of the original counterpart of the
Lease and the Lease Supplement covering the Aircraft, no further action,
including any filing or recording of any document, is necessary or
advisable in order (i) to establish the Owner Trustee's title to and
interest in the Aircraft and the Lessor's Estate as against the Lessee and
any third parties, or (ii) to perfect the first security interest in and
mortgage Lien on the Trust Indenture Estate in favor of the Indenture
Trustee;
(k) on the Delivery Date, the Owner Trustee has received good and
marketable title to the Aircraft, free and clear of all Liens, except the
rights of the Lessee under the Lease and the Lease Supplement, the rights
of the Indenture Trustee under the Indenture and the beneficial interest of
the Owner Participant created by the Trust Agreement;
(l) the Lessee has heretofore delivered to the Owner Participant
true and correct copies of the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 and its Quarterly Reports on Form 10-Q for
the fiscal quarters ended August 31, 1996, November 30, 1996 and February
28, 1997, and of the audited consolidated balance sheet of the Lessee for
the fiscal year ended May 31, 1996 and the unaudited consolidated balance
sheets of the Lessee as of August 31, 1996, November 30, 1996 and February
28, 1997, and the related consolidated statements of income, changes in
common stockholders' investment and cash flows for the fiscal year and
interim reporting periods ended on such dates, accompanied (except in the
case of such interim reporting periods) by a report thereon containing
opinions without qualification, except as therein noted, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent public accountants; said financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly the financial position of the
Lessee as of such dates and the results of its operations and cash flows
for such periods and such Annual Report, Quarterly Reports and financial
statements did not, as of their respective dates of filing with the SEC,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein not misleading;
(m) with respect to ERISA:
(i) none of the Pension Plans (as defined at the end of this
Section 6.01(m)) nor their related trusts have been terminated in a
distress termination pursuant to Section 4041(c) of ERISA or by the
Pension Benefit Guaranty Corporation (together with any successor
agency or instrumentality thereto, the "PBGC") pursuant to Section
4042 of ERISA, nor have any actions been taken to so terminate any
Pension Plan or related trust and neither the Lessee nor any ERISA
Affiliate (as defined at the end of this Section 6.01(m)) has
incurred or could reasonably be expected to incur any material
liability with respect to a Pension Plan under Section 4062, 4063,
4064 or 4069 of ERISA;
(ii) there have been no "reportable events" (as such term is
defined in Section 4043(b) of ERISA) with respect to any Pension Plan
which have resulted or could reasonably be expected to result in any
material liability of the Lessee or any ERISA Affiliate;
(iii) no "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code) exists with
respect to any Pension Plan, whether or not waived, nor has any
request for a waiver under Section 412(d) of the Code been, or is
reasonably likely to be, filed with respect to any of the Pension
Plans;
(iv) neither the Lessee nor any ERISA Affiliate has failed to make
any contribution or payment to any Pension Plan which has resulted or
could reasonably be expected to result in the imposition of a Lien
under Section 302(f) of ERISA or Section 412(n) of the Code;
(v) all Pension Plans are in compliance in all material respects
with all applicable provisions of ERISA and the Code;
(vi) neither the Lessee nor any ERISA Affiliate has incurred or is
reasonably likely to incur any material withdrawal liability pursuant
to Section 4201 or 4204 of ERISA or any material liability under
Section 515 of ERISA;
(vii) to the best of the Lessee's knowledge, neither the Lessee
nor any ERISA Affiliate has engaged in a "prohibited transaction"
(within the meaning of Section 4975 of the Code or Section 406 of
ERISA) which could reasonably be expected to subject the Lessee to
the tax or penalties on prohibited transactions imposed by Section
4975 of the Code or Section 502 of ERISA; and
(viii) assuming the truth of the representations contained in
Section 7.09 hereof and compliance with Section 10.06 of the
Indenture, the execution and delivery of this Agreement and the other
Operative Agreements and the consummation of the transactions
contemplated hereby and thereby will not involve any transaction
which is prohibited by Section 406 of ERISA or in connection with
which a tax could be imposed pursuant to Section 4975 of the Code.
No part of the funds to be used by the Lessee in satisfaction of its
obligations under this Agreement or any other of the Operative
Agreements to which the Lessee is a party or to which the Lessee is
bound are the assets of any employee benefit plan subject to Title I
of ERISA, or any individual retirement account or an employee benefit
plan subject to Section 4975 of the Code;
as used in this Section 6.01(m), the term "Pension Plan" means an employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA) which is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and which is maintained, or contributed to,
by the Lessee or any ERISA Affiliate, and the term "ERISA Affiliate" means
any entity which together with the Lessee would be treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code;
(n) the Lessee is a Citizen of the United States;
(o) except for the filings referred to in Sections 4.01(f), 4.02(e)
and 4.02(f) hereof, no governmental approval of any kind is required of the
Owner Participant or for the Owner Participant's execution of or
performance under this Agreement or any agreement contemplated hereby by
reason of any fact or circumstance of the Lessee, the nature of the
Aircraft or the Lessee's proposed operations or use of the Aircraft;
(p) on the Delivery Date, all premiums with respect to the insurance
required to be provided by the Lessee on or prior to the Delivery Date
under Article 13 of the Lease have been paid by the Lessee;
(q) on the Delivery Date, all sales or use taxes relating to the
sale of the Aircraft by AVSA to the Owner Trustee which are then or were
theretofore due shall have been paid;
(r) the Lessee is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Lessee is a
party or by which it or any of its Properties or assets may be bound, or in
violation of any applicable law, which default or violation would have a
material adverse effect on the financial condition, business or operations
of the Lessee or its ability to perform any of its obligations under the
Lessee Documents;
(s) no Default or Event of Default or Event of Loss or event, which
with the passage of time or if continued unremedied or unaltered would
constitute an Event of Loss, has occurred or exists;
(t) on the Delivery Date, the Aircraft will be in such condition so
as to enable the airworthiness certificate of such Aircraft to be in good
standing under the Transportation Code; the Aircraft will have been duly
certificated by the FAA as to type and airworthiness; there will be in
effect with respect to the Aircraft a current and valid airworthiness
certificate issued by the FAA pursuant to the Transportation Code; and
there is no fact known to the Lessee which materially adversely affects the
value, utility or condition of the Aircraft;
(u) on the Certificate Closing Date and the Delivery Date, the
Lessee shall not be in default in the performance of any term or condition
of the Purchase Agreement, the Purchase Agreement Assignment, the Engine
Warranty Assignment and the GTA and the aggregate amount of loans shall not
exceed the Debt Portion;
(v) neither the Lessee nor any subsidiary of the Lessee is an
"investment company" or a company "controlled by an investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(w) on the Delivery Date, the Aircraft will, upon delivery, be fully
equipped to operate in commercial service and will comply with all
governmental requirements governing such service; and
(x) there are no broker's or underwriter's fees payable on behalf
of the Lessee in connection with the transactions contemplated in the
Operative Agreements other than those of the Underwriters and First
Chicago Leasing Corporation referred to in Article 10 hereof.
Section 6.02. Offering by Lessee. The Lessee represents and
warrants that it has authorized no one to act on its behalf in connection with
the offer or sale of any interest in the Lessor's Estate or the Trust
Agreement other than First Chicago Leasing Corporation. Neither the Lessee
nor, based on representations of First Chicago Leasing Corporation, anyone
acting on its behalf has directly or indirectly offered any interest in the
Lessor's Estate or the Trust Agreement, or similar interests, for sale to, or
solicited any offer to acquire any of the same from, anyone other than the
Owner Participant and no more than 15 other accredited investors (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended).
Section 6.03. Certain Covenants of Lessee. The Lessee covenants and
agrees with the Owner Participant, the Owner Trustee (in its individual
capacity and as Owner Trustee), the Pass Through Trustee (in its individual
capacity and as Pass Through Trustee) and the Indenture Trustee (in its
individual capacity and as Indenture Trustee) as follows:
(a) The Lessee will cause to be done, executed, acknowledged and
delivered at the Lessee's cost and expense all such further acts,
conveyances and assurances as the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee or the Owner Participant shall reasonably require for
accomplishing the purposes of this Agreement, the Trust Agreement, the
Purchase Agreement, the Purchase Agreement Assignment, the GTA, the Engine
Warranty Assignment, the Indenture, the Indenture and Security Agreement
Supplement, the Tax Indemnity Agreement, the Lease and the Lease Supplement
and the other Operative Agreements to which it is a party. Without
limiting the generality of this Section 6.03(a), the Lessee will promptly
take, or cause to be taken, at the Lessee's cost and expense, such action
with respect to the recording, filing, re-recording and re-filing of the
Indenture, each Indenture and Security Agreement Supplement, the Lease,
each Lease Supplement and any financing statements or other instruments as
may be necessary, or as requested by the Indenture Trustee and appropriate,
to maintain the perfection of the first security interest and the Lien
created by the Indenture, and the Owner Trustee's title to and interest in
the Aircraft and the Lessor's Estate as against the Lessee and any third
parties or if the Lessee cannot take, or cause to be taken, such action,
will furnish to the Indenture Trustee and the Owner Trustee timely notice
of the necessity of such action, together with such instruments, in
execution form, and such other information as may be required to enable
either of them to take such action at the Lessee's cost and expense in a
timely manner.
(b) From and after the Delivery Date, the Lessee shall maintain the
certificates referred to in Section 7.01 of the Lease and shall cause the
Aircraft to be duly registered, and at all times to remain duly registered,
in the name of the Owner Trustee, under the Transportation Code, and shall
furnish to the Owner Trustee such information as may be required to enable
the Owner Trustee to make application for such registration; provided,
however, that the Owner Participant, the Owner Trustee and the Indenture
Trustee agree that if at any time after December 31, 2004, so long as no
Event of Default shall have occurred and be continuing, the Lessee has
requested their consent to the registration of the Aircraft in the name of
the Owner Trustee (or, if appropriate under the laws of such
jurisdiction of reregistration, in the name of the Lessee or a sublessee
as a "lessee" or a "sublessee"), at the Lessee's expense, in a country
listed in Schedule III hereto with which the United States then
maintains normal diplomatic relations (and which is not then
experiencing war or substantial civil unrest), the Owner Participant,
the Owner Trustee and the Indenture Trustee upon receipt by the Owner
Participant, the Owner Trustee and the Indenture Trustee of the
assurances and opinion described below, shall not unreasonably withhold
their consent to such change in registration (it being agreed, without
limitation, that the inability of the Lessee to deliver such assurances
or such opinion shall constitute reasonable grounds to withhold such
consent).
As a condition to any change in the registration of the Aircraft, the
Owner Participant, the Owner Trustee in its individual and trust capacities,
and the Indenture Trustee shall have received:
(i) assurances satisfactory to them:
(A) to the effect that the insurance provisions of the Lease have
been and will be complied with and are and shall be in full force and
effect upon such change of registry;
(B) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft;
(C) that the Owner Trustee's right, title and interest in and to
the Aircraft is recognized and fully enforceable in the new
jurisdiction of registry, that the rights of the Owner Trustee in and
to the Aircraft will not be impaired in such new jurisdiction of
registry and that the new jurisdiction of registry will give effect
to the title and registry of the Aircraft therein substantially to
the same extent as does the Government;
(D) that such new country of registry (x) would provide
substantially equivalent protection for the rights of owner
participants, lessors or lenders in similar transactions as provided
under United States law (except that, in the absence of restrictions
under the laws of such country on rights and remedies of lessors and
secured parties similar to those imposed by Sections 362 and 363 of
the Bankruptcy Code, rights and remedies similar to those available
under Section 1110 of the Bankruptcy Code shall not be required) and
(y)(i) if such change in registration is made other than in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards at least comparable to those of
the FAA, and (ii) if such change in registration is made in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards in conformity with those set
forth in Section 7.02(a)(i) of the Lease;
(E) that import and export certificates and any exchange permits
necessary to allow all Rent and other payments provided for under the
Lease, if required, shall have been procured at the Lessee's own cost
and expense by the Lessee;
(F) that the Lessee shall have effected or caused to be effected
at the Lessee's own cost and expense all recordings and filings that
are required to perfect the Lien of the Indenture;
(G) to the effect that the original indemnities (and any
additional indemnities for which the Lessee is then willing to
enter into a binding agreement to indemnify) in favor of the Owner
Participant, the Owner Trustee (in its individual capacity and as
trustee under the Trust Agreement), the Indenture Trustee (in its
individual capacity, and as trustee under the Indenture), the Pass
Through Trustee (in its individual capacity, and as trustee under
the Pass Through Agreement) and the other Indemnitees under this
Agreement, the Indenture, the Pass Through Agreement and (in the
case of the Owner Participant only) the Tax Indemnity Agreement,
afford each such party substantially the same protection as
provided prior to such change of registry;
(H) that such change will not result in the imposition of, or
increase in the amount of, any Tax (which, for this purpose, includes
the loss of any tax benefits assumed by the Owner Participant to be
available to it based upon the assumptions set forth in Section 2 of
the Tax Indemnity Agreement) for which the Lessee has not agreed to
indemnify the Owner Participant to its reasonable satisfaction, the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee (or
any successor, assign or Affiliate thereof) and the Trust Estate;
(I) that any value added tax, customs duty, tariff or similar
governmental charge relating to the change in jurisdiction of
registration of the Aircraft shall have been paid in full or
adequately provided for by the Lessee to the satisfaction of the
Owner Trustee, the Indenture Trustee and the Owner Participant;
(J) of the payment by the Lessee of any reasonable fees and
expenses of the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee in connection with such change
of registry, including any reasonable attorneys' fees and expenses;
(K) that duties and tariffs, if applicable, shall have been paid
for by the Lessee;
(L) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft and the Trust
Indenture Estate, that all recordings and filings required to so
perfect the Lien of the Indenture have been duly effected, and that
no Liens (except Liens permitted under Section 6.01 of the Lease)
shall arise by reason of such registration; and
(M) that appropriate deregistration powers of attorney in favor of
the Owner Trustee and the Indenture Trustee have been executed and
delivered by the Lessee and any sublessee and, if necessary or
desirable for the effectiveness thereof, filed with the relevant
aeronautics authority; and
(ii) a favorable opinion of counsel (reasonably satisfactory to the
Owner Trustee, the Indenture Trustee and the Owner Participant) in the new
jurisdiction of registry, addressed and reasonably satisfactory to such
parties in scope, form and substance, to the effect:
(A) that the terms (including, without limitation, the governing
law, service-of-process and jurisdictional-submission provisions
thereof) of the Lease and the Indenture are legal, valid, binding and
enforceable in such jurisdiction against the Lessee, any sublessee,
the Owner Trustee and the Indenture Trustee, respectively;
(B) that it is not necessary for the Owner Participant, the Owner
Trustee, the Indenture Trustee or the Pass Through Trustee to
register or qualify to do business or meet other requirements not
already met in such jurisdiction in connection with the registration
in the new jurisdiction (and the filing and/or recordation therein of
the Indenture or the Lease) and the exercise of any rights or
remedies with respect to the Aircraft pursuant to the Lease or the
Indenture or in order to maintain such registration and the Lien of
the Indenture;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b)(i)(D)(x) of this Section 6.03) in respect of the
transactions contemplated hereby, including, without limitation, the
remedies provided in the Indenture and the Lease;
(D) that there is no tort liability of the beneficial owner,
record owner, lessor or mortgagee of an aircraft not in possession
thereof under the laws of such jurisdiction, other than tort
liability which might reasonably have been imposed on such owner,
lessor or mortgagee under the laws of the United States or any state
thereof (it being understood that, in the event such latter opinion
cannot be given in a form satisfactory to the Owner Trustee, the
Owner Participant and the Indenture Trustee, such opinion shall be
waived, if insurance reasonably satisfactory to the Owner
Participant, the Indenture Trustee and the Owner Trustee, in its
individual capacity, is provided, at the Lessee's expense, to cover
such risk and the Lessee undertakes to keep such insurance in full
force and effect);
(E) that the laws of such jurisdiction will not impair the rights
of the Lessor in and to the Aircraft or under the Lease and (unless
the Lessee shall have agreed to provide insurance reasonably
satisfactory to the Indenture Trustee and the Owner Participant
covering the risk of requisition of use of the Aircraft by the
government of registry of the Aircraft) require fair compensation by
the government of such jurisdiction payable in currency freely
convertible into United States dollars for the loss of use of the
Aircraft in the event of such requisition;
(F) that the Owner Trustee's title to the Aircraft is recognized
and fully enforceable in such jurisdiction, that such jurisdiction
will give effect to the title of the Aircraft therein substantially
to the same extent as does the Government, and that the Lien of the
Indenture shall continue as a first priority, duly perfected lien on
the Aircraft;
(G) to such further effect with respect to such other matters as
the Owner Participant, the Owner Trustee, or the Indenture Trustee may
reasonably request; and
(H) the Lien of the Indenture continues to constitute a first
priority, duly perfected Lien on the Aircraft.
(c) The Lessee shall promptly file any reports, or furnish to the
Owner Trustee and the Owner Participant such information as may be required
to enable the Owner Trustee and the Owner Participant timely to file any
reports required to be filed by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any governmental authority.
(d) The Lessee will cause the Special Aviation Counsel to file, and
where appropriate record, on the Delivery Date, AVSA's FAA ▇▇▇▇ of Sale,
the Lease, the Lease Supplement, the Trust Agreement, the Indenture and the
Indenture and Security Agreement Supplement. The following documents shall
be filed and, where appropriate, recorded on the Delivery Date with the
Aeronautics Authority in the following order of priority: first, AVSA's
FAA ▇▇▇▇ of Sale, second, the Application, with the Trust Agreement and the
Affidavits, third, the Indenture with the Indenture and Security Agreement
Supplement attached thereto, and fourth, the Lease with the Lease
Supplement, the Indenture and the Indenture and Security Agreement
Supplement attached thereto.
(e) The Lessee will furnish to the Owner Participant, the Owner
Trustee and the Indenture Trustee annually after the execution of this
Agreement, by March 15 of each year, commencing with the year 1998, an
opinion, reasonably satisfactory to the Owner Participant and the Indenture
Trustee, of Special Aviation Counsel, or other counsel specified from time
to time by the Lessee acceptable to the Lessor and the Indenture Trustee:
(i) stating either (1) that in the opinion of such counsel such action has
been taken with respect to the recording, filing, re-recording and
re-filing of the Lease, the Indenture, the Trust Agreement, and any
supplements to any of them and any financing statements, continuation
statements or other instruments, and all other action has been taken, as is
necessary to maintain the Owner Trustee's title to and interest in the
Aircraft and the Lessor's Estate as against the Lessee and any third
parties and to maintain the perfection of the security interests created by
said documents and reciting the details of such action, or (2) that in the
opinion of such counsel no such action is necessary to maintain such title
or the perfection of such security interests; (ii) specifying all other
action which needs to be taken during the succeeding 14 months in order to
maintain such title and the perfection of such security interests (which
the Lessee agrees timely to take); and (iii) stating that the Owner Trustee
is the owner of legal title to the Aircraft, and the Aircraft is free and
clear of all Liens, except the security interest created by the Indenture
and such as are permitted by the Lease and the Indenture.
(f) The Lessee shall at all times maintain its corporate existence
except as permitted by Section 6.03(g) hereof and all of its rights,
privileges and franchises necessary in the normal conduct of its business,
except for any corporate right, privilege or franchise (i) that it
determines, in its reasonable, good faith business judgment, is no longer
necessary or desirable in the conduct of its business and (ii) the loss of
which will not materially adversely affect or diminish the rights of the
Holders or the Owner Participant.
(g) The Lessee shall not enter into any merger or consolidation, or
convey, transfer or lease all or substantially all of its assets as an
entirety to any Person, unless the surviving corporation or Person which
acquires by conveyance, transfer or lease all or substantially all of the
assets of the Lessee as an entirety (i) is a domestic corporation organized
and existing under the laws of the United States or a political subdivision
thereof, (ii) is a Citizen of the United States, (iii) is a U.S. Air
Carrier, (iv) expressly assumes by an instrument in writing in form and
substance satisfactory to the Owner Participant, the Indenture Trustee and
the Owner Trustee all of the Lessee's obligations hereunder and under the
other Operative Agreements, and each other document contemplated hereby or
thereby and the Lessee delivers such instrument to the Indenture Trustee,
the Owner Participant and the Owner Trustee, (v) provides an opinion from
outside counsel to the Lessee which counsel shall be reasonably
satisfactory to the Owner Participant and the Indenture Trustee and which
opinion shall be reasonably satisfactory to the Owner Participant and the
Indenture Trustee, and an officer's certificate, each stating that such
merger, consolidation, conveyance, transfer or lease and the instrument
noted in clause (iv) above comply with this Section 6.03(g), that such
instrument is a legal, valid and binding obligation of, and is enforceable
against, such survivor or Person, and that all conditions precedent herein
provided for relating to such transaction have been complied with, and (vi)
immediately after such merger, consolidation or conveyance, transfer or
lease, as the case may be, the surviving company (or Person which acquires
by conveyance, transfer or lease the assets of the Lessee) is in compliance
with all of the terms and conditions of this Agreement and the Lease and
each other Operative Agreement and each other document contemplated hereby
or thereby; provided that no such merger, consolidation or conveyance,
transfer or lease shall be permitted if the same gives rise to an Event of
Default.
Upon any consolidation or merger, or any conveyance, transfer or
lease of all or substantially all of the assets of the Lessee and the
satisfaction of the conditions specified in this Section 6.03(g), the
successor corporation formed by such consolidation or into which the Lessee
is merged or the Person to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Lessee under this Agreement and the Lease and each other
Operative Agreement and any other document contemplated hereby and thereby
to which the Lessee is a party with the same effect as if such successor
corporation had been named as the Lessee herein and therein. No such
conveyance, transfer or lease of all or substantially all of the assets of
the Lessee as an entirety shall have the effect of releasing the Lessee or
any successor corporation which shall theretofore have become the Lessee
hereunder in the manner prescribed in this Section 6.03(g) from its
liability hereunder or under the other Operative Agreements. Nothing
contained herein shall permit any lease, sublease, or other arrangement for
the use, operation or possession of the Aircraft except in compliance with
the applicable provisions of the Lease.
(h) The Lessee agrees to give prompt written notice to the Owner
Participant, the Owner Trustee and the Indenture Trustee of any change in
the address of its chief executive office (as such term is used in Section
9-103(3) of the Tennessee Uniform Commercial Code) or of any change in its
corporate name.
(i) The Lessee agrees to furnish to the Owner Participant, the
Lessor and the Indenture Trustee:
(A) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Lessee, a
consolidated balance sheet as of the end of such fiscal year, and the
related consolidated statements of income, common stockholders'
equity, retained earnings and cash flows of the Lessee for the fiscal
year then ended as prepared and certified by the Lessee's independent
certified public accountants, including their opinion;
(B) within sixty (60) days after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Lessee,
a consolidated balance sheet of the Lessee prepared by it as of the
close of the accounting period then ended, together with the related
consolidated statements of income, retained earnings and cash flows
for such accounting period certified by the chief accounting officer
or a financial vice president of the Lessee;
(C) promptly upon their general transmission, copies of all
reports and statements furnished by the Lessee to its stockholders;
(D) promptly after filing with the SEC, copies of the Lessee's
Annual Reports on Form 10-K (including all corresponding annual
reports to shareholders), Quarterly Reports on Form 10-Q and, if
requested, any registration statement or prospectus filed by the
Lessee with any securities exchange or with the SEC;
(E) promptly upon (and in any event within five (5) Business Days
after) any officer of the Lessee obtaining knowledge of any condition
or event which constitutes a Default or an Event of Default, an
officer's certificate specifying the nature and period of existence
thereof and what action the Lessee has taken or is taking or proposes
to take with respect thereto;
(F) from time to time, such other financial information as the
Lessor, the Owner Participant or the Indenture Trustee may
reasonably request.
Concurrently with the delivery of the financial statements referred
to in clause (A) above, the Lessee shall deliver to the Lessor, the Owner
Participant, the Indenture Trustee and the Pass Through Trustee a certificate
of the Lessee, signed by any one of the President, the Chief Financial
Officer, the General Counsel, the Treasurer or the principal accounting
officer of the Lessee, stating that the signer, or an employee reporting to
same, is familiar with the relevant terms of this Agreement and the Lease and
the signer has reviewed, or has caused to be made under such Person's
supervision a review, of the activities of the Lessee and that, to the best of
his or her knowledge, there does not exist any Default or any Event of Default
or if a Default or an Event of Default exists or did exist, specifying the
nature thereof, the period of existence thereof and what action the Lessee has
taken or proposes to take with respect thereto.
Section 6.04. Survival of Representations and Warranties. The
representations and warranties of the Lessee provided in Sections 6.01 and
6.02 hereof and in any other Operative Agreement shall survive the Closings
hereunder and the delivery of the Aircraft and the expiration or other
termination of this Agreement and the other Operative Agreements.
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate. (a) [Reserved]
(b) Owner Participant. The Owner Participant represents and
warrants that its interest in the Lessor's Estate and the Trust Agreement is
being acquired by it for its own account and not with a view to resale or
distribution thereof; provided, however, that the disposition by the Owner
Participant of its interest in the Lessor's Estate and the Trust Agreement
shall, subject to the terms and provisions of Section 7.03(d) hereof (except
as provided in clause (ii) of Section 3.05(a) hereof), at all times be within
its control and the foregoing representation shall not limit the Owner
Participant's right to transfer or sell such interests pursuant to the terms
of this Agreement. Neither the Owner Participant nor anyone authorized to act
on its behalf has directly or indirectly offered any interest in the Lessor's
Estate or the Trust Agreement, or in any similar security, for sale to, or
solicited any offer to acquire any of the same from, anyone. The Owner
Participant further represents and warrants that neither it nor anyone
authorized to act on its behalf has made or will make any offer, solicitation
or sale of any interest in the Lessor's Estate or the Trust Agreement in
violation of the provisions of Section 5 of the Securities Act of 1933, as
amended. No representation in this Section 7.01(b) shall include any action
or inaction of the Lessee, First Chicago Leasing Corporation, the
Subordination Agent, the Underwriters or any Affiliates of any thereof whether
or not such action or inaction is purportedly on behalf of the Owner Trustee,
the Owner Participant or any of their Affiliates.
Section 7.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity and as Trustee, and the Owner Participant
severally represents and warrants that it is or will be a Citizen of the
United States on the Delivery Date. If the Owner Participant or the Owner
Trustee in its individual capacity does not comply with the requirements of
this Section 7.02, the Owner Trustee, the Indenture Trustee and the Owner
Participant hereby agree that a Default or an Event of Default shall not be
deemed to have occurred and be continuing under the Lease due to
non-compliance by the Lessee with the registration requirements in the Lease
occasioned by the noncompliance of the Owner Participant or the Owner Trustee.
(b) Owner Trustee. The Owner Trustee, in its individual capacity,
covenants that if at any time on or after the Delivery Date it shall have
actual knowledge that it has ceased to be a Citizen of the United States, it
will resign immediately as the Owner Trustee if such citizenship is necessary
under the Transportation Code as in effect at such time or, if it is not
necessary under the Transportation Code as in effect at such time, if it is
informed in writing by the Lessee, the Indenture Trustee or the Owner
Participant that such lack of United States citizenship would have any adverse
effect on the Lessee, the Indenture Trustee, the Holders or the Owner
Participant. The Owner Trustee, in its individual capacity, further covenants
that if at any time it appears reasonably probable that it will cease to be a
Citizen of the United States based on information that is (i) known to a
Responsible Officer or (ii) generally known to the public, it will promptly so
notify, to the extent permitted by law, all parties to this Agreement.
(c) Owner Participant. The Owner Participant agrees, solely for the
benefit of the Lessee, the Pass Through Trustee, the Indenture Trustee and the
Owner Trustee, that if at any time on or after the Delivery Date when the
Aircraft is registered or the Lessee proposes to register the Aircraft in the
United States (i) either it shall cease to be, or an event which has been
publicly disclosed has occurred of which the Owner Participant has knowledge
and which will cause the Owner Participant to cease to be, a Citizen of the
United States and (ii) the Aircraft shall or would therefore become ineligible
for registration in the name of the Owner Trustee under the Transportation
Code and regulations then applicable thereunder, then the Owner Participant
shall give notice thereof to the Lessee, the Owner Trustee and the Indenture
Trustee and shall (at its own expense and without any reimbursement or
indemnification from the Lessee) immediately (and in any event within a period
of 20 days) (x) effect a voting trust or other similar arrangement, (y)
transfer in accordance with the terms of this Agreement and the Trust
Agreement all its rights, title and interest in and to such Trust Agreement,
the Lessor's Estate and this Agreement, or (z) take any other alternative
action that would prevent any deregistration, or maintain or permit the United
States registration, of the Aircraft. It is agreed that the Owner Participant
shall be liable to pay promptly on request (A) to each of the other parties
hereto any actual damages (but not consequential damages) suffered by any such
other party to the extent the same shall result from the representation and
warranty of the Owner Participant in the first sentence of Section 7.02(a)
hereof proving to be untrue as of the Delivery Date; and (B) to the Lessee,
the Indenture Trustee or the Pass Through Trustee for any damages actually
(but not consequentially) incurred by the Lessee, the Indenture Trustee and
the Pass Through Trustee as a result of the Owner Participant's failure to
comply with its obligations pursuant to the first sentence of this Section
7.02(c); provided, that, the foregoing shall not restrict the Pass Through
Trustee or the Indenture Trustee from asserting against the Owner Participant
any damages actually incurred by the holders of any Pass Through Certificates.
Each party hereto agrees, upon the request and at the sole expense of the
Owner Participant, to cooperate with the Owner Participant in complying with
its obligations under the provisions of the first sentence of this Section
7.02(c), but without any obligation on the part of such other party to take
any action believed by it in good faith to be unreasonably burdensome to such
party or materially adverse to its business interests.
Section 7.03. Representations, Warranties and Covenants of Owner
Participant. (a) Representations, Warranties and Covenants. In addition to
and without limiting its other representations and warranties provided for in
this Article 7, the Owner Participant represents and warrants on the date
hereof and as of the Certificate Closing Date and the Delivery Date that:
(i) it is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware and it has full
corporate power, authority and legal right to carry on its present business
and operations, to own or lease its Properties and to enter into and to
carry out the transactions contemplated by this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative Agreements
to which it is party;
(ii) the execution, delivery and performance by it of this
Agreement, the Tax Indemnity Agreement, and the Trust Agreement and the
other Operative Agreements to which it is party have been duly authorized
by all necessary corporate action on its part and, assuming the accuracy of
the Lessee's representations in Section 6.01(o) hereof, do not require any
governmental approvals that would be required to be obtained by the Owner
Participant;
(iii) based on the representations, warranties and covenants
contained in Sections 6.01(m)(viii), 6.02 and 7.09 hereof and compliance
with Section 10.06 of the Indenture, neither the execution, delivery or
performance by the Owner Participant of this Agreement, the Tax Indemnity
Agreement, and the Trust Agreement and the other Operative Agreements to
which it is party nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent or approval under any law, governmental rule or
regulation applicable to the Owner Participant or the charter documents,
as amended, or bylaws, as amended, of the Owner Participant or any
order, writ, injunction or decree of any court or governmental authority
against the Owner Participant or by which it or any of its Properties is
bound or any indenture, mortgage or contract or other agreement or
instrument to which the Owner Participant is a party or by which it or
any of its Properties is bound, or constitutes or will constitute a
default thereunder or results or will result in the imposition of any
Lien upon any of its Properties;
(iv) this Agreement, the Tax Indemnity Agreement and the Trust
Agreement and the other Operative Agreements to which it is party have been
or on the Certificate Closing Date will be duly executed and delivered by
the Owner Participant and constitute or on the Certificate Closing Date
will constitute the legal, valid and binding obligation of the Owner
Participant enforceable against it in accordance with their terms except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws or equitable principles of general
application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(v) it is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Owner
Participant is a party or by which it or any of its Properties may be
bound, or in violation of any applicable law, which default or violation
would have a material adverse effect on the financial condition, business
or operations of the Owner Participant or an adverse effect on the ability
of the Owner Participant to perform its obligations under this Agreement
and the other Operative Agreements to which it is or is to be a party;
(vi) there are no pending or, to the knowledge of the Owner
Participant, threatened actions, suits, investigations or proceedings
against the Owner Participant before any court, administrative agency or
tribunal which are expected to materially adversely affect the ability of
the Owner Participant to perform its obligations under this Agreement and
the other Operative Agreements to which it is or is to be a party and the
Owner Participant knows of no pending or threatened actions or proceedings
before any court, administrative agency or tribunal involving it in
connection with the transactions contemplated by the Operative Agreements;
(vii) neither the execution and delivery by it of this Agreement or
the other Operative Agreements to which it is a party nor the performance
of its obligations hereunder or thereunder requires the consent or approval
of or the giving of notice to, the registration with, or the taking of any
other action in respect of, any governmental authority or agency that would
be required to be obtained or taken by the Owner Participant except for
filings contemplated by this Agreement;
(viii) no part of the funds to be used by it to acquire the interests
to be acquired by the Owner Participant under this Agreement constitutes
assets (within the meaning of ERISA and any applicable rules and
regulations) of any employee benefit plan subject to Title I of ERISA or of
any plan or individual retirement account subject to Section 4975 of the
Code; and
(ix) it is a "U.S. Person" as defined in Section 7701(a)(30) of the
Code and is not a tax resident of another country.
Notwithstanding the foregoing or anything else contained in this
Agreement, the Owner Participant makes no representation or warranty in this
Agreement with respect to laws, rules or regulations relating to aviation or
to the nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship, design,
patent or trademark infringement, operation, merchantability or fitness for
use of the Aircraft, other than such laws, rules or regulations relating to
the citizenship requirements of the Owner Participant under applicable
aviation law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens attributable to it (or
an Affiliate thereof) and that there will not be any Lessor's Lien
attributable to it (or an Affiliate thereof) on the Certificate Closing Date.
The Owner Participant agrees with and for the benefit of the Lessee, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee that the Owner
Participant will, at its own cost and expense, take such action as may be
necessary (by bonding or otherwise, so long as neither the Lessee's operation
and use of the Aircraft nor the validity and priority of the Lien of the
Indenture is impaired) to duly discharge and satisfy in full, promptly after
the same first becomes known to the Owner Participant, any Lessor's Lien
attributable to the Owner Participant (or an Affiliate thereof), provided,
however, that the Owner Participant shall not be required to discharge or
satisfy such Lessor's Lien which is being contested by the Owner Participant
in good faith and by appropriate proceedings so long as such proceedings do
not involve any material danger of the sale, forfeiture or loss of the
Aircraft or the Lessor's Estate or the Trust Indenture Estate or any interest
in any thereof or otherwise materially adversely affect the validity or
priority of the Lien of the Indenture.
(c) Reimbursement. Without limiting any other rights the parties
hereto may have as a result of any breach by the Owner Participant of its
obligations in Section 7.03(b) hereof, the Owner Participant agrees to
reimburse each other party hereto for all reasonable legal fees and expenses
of counsel that may be incurred by any such party as a result of the failure
of the Owner Participant to discharge and satisfy any such Lessor's Lien in
accordance with the terms of Section 7.03(b) hereof.
(d) Assignment of Interests of Owner Participant. At any time after
the Delivery Date (or upon the direction of the Lessee if Section 3.05(a)(i)
hereof shall be applicable), and subject to the conditions set forth in this
Section 7.03(d), the Owner Participant may assign, convey or otherwise
transfer to a single institutional investor or an Affiliate of an
institutional investor all (but not less than all) of the Beneficial Interest,
provided that it gives the Lessee and the Indenture Trustee at least 10
Business Days' notice of such assignment, conveyance or other transfer and
provided further that the Owner Participant and any Owner Participant
Guarantor shall remain liable for all obligations of the Owner Participant
under the Trust Agreement and the Operative Agreements to which the Owner
Participant is a party to the extent (but only to the extent) relating to the
period on or before the date of such transfer and provided that the transferee
agrees by a written instrument substantially in the form attached hereto as
Exhibit G-1 to assume primary liability for all obligations as an Owner
Participant under the Trust Agreement and the other Operative Agreements to
which such Owner Participant is a party relating to the period after the date
of transfer. Any such transferee shall (a) be (i) a bank, savings
institution, finance company, leasing company or trust company, national
banking association acting for its own account or in a fiduciary capacity as
trustee or agent under any pension, retirement, profit sharing or similar
trust or fund, insurance company, fraternal benefit society or corporation
acting for its own account having a combined capital and surplus (or, if
applicable, consolidated tangible net worth or its equivalent) of not less
than $75,000,000, (ii) a subsidiary of any Person described in clause (i)
where such Person provides (A) support for the obligations assumed by such
transferee subsidiary reasonably satisfactory to the Lessee, the Owner Trustee
and the Indenture Trustee or (B) an unconditional guaranty substantially in
the form of Exhibit G-2 attached hereto of such transferee subsidiary's
obligations, or (iii) an Affiliate of the transferring Owner Participant, so
long as such Affiliate has a combined capital and surplus (or, if applicable,
consolidated tangible net worth or its equivalent) of not less than
$75,000,000, (b) be legally capable of binding itself to the obligations of
the Owner Participant and shall expressly agree to assume all obligations of
the Owner Participant under the Trust Agreement and this Agreement and (c)
provide representations substantially similar to those contained in Sections
7.02(a) and 7.03(a) hereof. In the event of any such assignment, conveyance
or transfer, the transferee shall become a party to the Trust Agreement and
shall agree to be bound by all the terms of and will undertake all of the
obligations of the Owner Participant contained in the Trust Agreement and the
other Operative Agreements in the manner set forth in the form attached as
Exhibit G-1. A transferee hereunder shall be (i) a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (or any successor provision thereto) and
such transferee shall be personally liable for any debt service to the extent
that its receipt of rentals is reduced by reason of any withholding Taxes that
result from such transferee's failure to be such a "U.S. Person" and (ii) a
Citizen of the United States or has established a voting trust, voting powers
or other arrangement reasonably satisfactory to the Indenture Trustee and the
Lessee to permit the Owner Trustee to be the registered owner of the Aircraft
under the Transportation Code. A transferee hereunder shall not be, and in
acquiring the Beneficial Interest shall not use the assets of, an employee
benefit plan subject to Title I of ERISA or an individual retirement account
or a plan subject to Section 4975 of the Code. Assuming the truth of the
representations made in Sections 6.01(m) and 7.06 hereof and compliance with
Section 10.06 of the Indenture, no such assignment, conveyance or transfer
shall violate any provision of law or regulation or create a relationship
which would be in violation thereof. The Owner Trustee shall not be on notice
of or otherwise bound by any such assignment, conveyance or transfer unless
and until it shall have received an executed counterpart of the instrument of
such assignment, conveyance or transfer. Upon any such disposition by the
Owner Participant to a transferee as above provided, the transferee shall be
deemed the "Owner Participant" or "Trustor" for all purposes of the Operative
Agreements, and shall be deemed to have made all the payments previously made
by its transferor and to have acquired the same interest in the Lessor's
Estate as theretofore held by its transferor; and each reference therein to
the "Owner Participant" or "Trustor" shall thereafter be deemed a reference
to such transferee. Notwithstanding anything to the contrary contained in
this Section 7.03(d), in no event shall the Owner Participant transfer its
interest in the Beneficial Interest to any entity whose business is that of
a nationwide or worldwide overnight or expedited delivery small package air
courier, cargo or freight deliverer or which competes with the Lessee in
such lines of business. The Lessee agrees that it will reasonably
cooperate with the Owner Participant in effecting an assignment of the
Owner Participant's interests including, without limitation, providing
letters to any successor Owner Participant permitting such successor Owner
Participant to rely on any opinions provided by the Lessee on the Delivery
Date.
(e) Actions with Respect to Lessor's Estate, Etc. The Owner
Participant agrees that it will not take any action to subject the Lessor's
Estate or the trust established by the Trust Agreement, as debtor, to the
reorganization or liquidation provisions of the Bankruptcy Code or any other
applicable bankruptcy or insolvency statute.
Section 7.04. Representations, Covenants and Warranties of SSB and
the Owner Trustee. (a) In addition to and without limiting its other
representations and warranties provided for in this Article 7, SSB represents
and warrants, in its individual capacity with respect to items (i), (ii),
(iii)(A), (iv), (v), (vi) and (vii) below, and as the Owner Trustee with
respect to items (iii)(B) and (iv) on the date hereof and as of the
Certificate Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
with its principal place of business and chief executive office (as such
terms are used in Article 9 of the Uniform Commercial Code) at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department
and has full corporate power and authority, in its individual capacity or
(assuming the Trust Agreement has been duly authorized, executed and
delivered by the Owner Participant) as the Owner Trustee, as the case may
be, to carry on its business as now conducted, and to execute, deliver and
perform this Agreement and the Operative Agreements to which it is or is to
be a party;
(ii) the execution, delivery and performance by SSB, either in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement and the Operative Agreements to which it is or is to be party
have been duly authorized by all necessary corporate action on its part,
and do not contravene its articles of association or by-laws; each of this
Agreement and the other Operative Agreements to which it is or is to be a
party has been duly authorized, and has been duly executed and delivered
or, in the case of the Operative Agreements identified in Section 4.02(c)
hereof, will on the Delivery Date be duly executed and delivered by SSB,
either in its individual capacity or as the Owner Trustee, as the case may
be, and neither the execution and delivery thereof nor SSB's performance
of or compliance with any of the terms and provisions thereof will violate
any Federal or Connecticut law or regulation governing SSB's banking or
trust powers;
(iii) (A) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or is
to be party when duly executed and delivered will, to the extent each such
document is entered into by SSB in its individual capacity, constitute the
legal, valid and binding obligation of SSB in its individual capacity
enforceable against it in such capacity in accordance with its respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and the performance by SSB in its individual capacity of
any of its obligations thereunder does not contravene any lease, regulation
or contractual restriction binding on SSB in its individual capacity;
(B) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or
is to be party when duly executed and delivered will, to the extent each
such document is entered into by the Owner Trustee in its trust
capacity, constitute the legal, valid and binding obligation of the
Owner Trustee enforceable against it in such capacity in accordance with
its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights (regardless of whether enforceability
is considered in a proceeding in equity or at law), and the performance
by the Owner Trustee of any of its obligations thereunder does not
contravene any lease, regulation or contractual restriction binding on
the Owner Trustee;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against SSB before any court or administrative agency
which would materially and adversely affect the ability of SSB, either
in its individual capacity or as the Owner Trustee, as the case may be,
to perform its obligations under the Operative Agreements to which it is
or is to be party;
(v) it shall give the Lessee, the Indenture Trustee and the Owner
Participant at least thirty (30) days' prior written notice in the event of
any change in its chief executive office or name;
(vi) neither the execution and delivery by it, either in its
individual capacity or as the Owner Trustee, as the case may be, of any of
the Operative Agreements to which it is or is to be a party, requires on
the part of SSB in its individual capacity or any of its Affiliates the
consent or approval of or the giving of notice to, the registration with,
or the taking of any other action in respect of, any Federal or Connecticut
governmental authority or agency governing its banking or trust powers; and
(vii) on the Certificate Closing Date, the proceeds arising from the
issuance and sale of the Certificates shall be free of Lessor's Liens
attributable to SSB in its individual capacity and on the Delivery Date the
Owner Trustee shall be holding whatever title to the Aircraft as was
conveyed to it by AVSA, the Aircraft shall be free of Lessor's Liens
attributable to SSB in its individual capacity and SSB in its individual
capacity is a Citizen of the United States.
(b) Lessor's Liens. SSB, in its individual capacity, further
represents, warrants and covenants that there are no Lessor's Liens
attributable to it in its individual capacity and that there will not be any
such Lessor's Liens on the Certificate Closing Date or the Delivery Date. The
Owner Trustee, in its trust capacity, and at the cost and expense of the
Lessee, covenants that it will in its trust capacity promptly, and in any
event within 30 days after the same shall first become known to it, take such
action as may be necessary to discharge duly any Lessor's Liens attributable
to it in its trust capacity. SSB, in its individual capacity, covenants and
agrees that it will at its own expense take such action as may be necessary to
duly discharge and satisfy in full, promptly, and in any event within 30 days
after the same shall first become known to it, any Lessor's Liens attributable
to it in its individual capacity which may arise at any time after the date of
this Agreement.
(c) Indemnity for Lessor's Liens. SSB, in its individual capacity,
agrees to indemnify and hold harmless the Lessee, the Indenture Trustee, the
Owner Participant and the Pass Through Trustee and the Owner Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Pass Through Trustee or the
Owner Trustee as a result of the failure of SSB to discharge and satisfy any
Lessor's Liens attributable to it in its individual capacity, as described in
Section 7.04(b) hereof.
(d) Securities Act. None of SSB, the Owner Trustee or any Person
authorized by either of them to act on its behalf has directly or indirectly
offered or sold or will directly or indirectly offer or sell any interest in
the Lessor's Estate, or in any similar security relating to the Lessor's
Estate, or in any security the offering of which for purposes of the
Securities Act of 1933, as amended, would be deemed to be part of the same
offering as the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person.
(e) Actions With Respect to Lessor's Estate, Etc. Neither SSB, in
its individual capacity, nor the Owner Trustee will take any action to subject
the Lessor's Estate or the trust established by the Trust Agreement, as
debtor, to the reorganization or liquidation provisions of the Bankruptcy Code
or any other applicable bankruptcy or insolvency statute.
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee. (a) The Indenture Trustee in its individual capacity (other
than as the Pass Through Trustee) represents on the date hereof and as of the
Certificate Closing Date and the Delivery Date as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Indenture, this Agreement and the other Operative Agreements to
which it is a party and to authenticate the Certificates to be delivered on
the Certificate Closing Date;
(ii) the Indenture and this Agreement and the other Operative
Agreements to which it is or is to be a party, and the authentication of
the Certificates to be delivered on the Certificate Closing Date, have been
duly authorized by all necessary corporate action on its part, and neither
the execution and delivery thereof nor its performance of any of the terms
and provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under, its articles of association or
by-laws;
(iii) each of the Indenture and this Agreement, and the other
Operative Agreements to which it is or is to be a party, has been duly
executed and delivered or, in the case of the Operative Agreements
identified in Section 4.02(c) hereof, will on the Delivery Date be executed
and delivered by it and, assuming that each such agreement is the legal,
valid and binding obligation of each other party thereto, is (or will be,
as the case may be), the legal, valid and binding obligation of the
Indenture Trustee, enforceable against the Indenture Trustee in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(iv) neither the execution and delivery by it of the Indenture and
this Agreement and the other Operative Agreements to which it is or is to
be a party, nor the performance by it of any of the transactions
contemplated hereby or thereby, requires the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any Federal or state governmental authority or agency
governing its banking and trust powers; and
(v) on the Certificate Closing Date, the Indenture Trustee holds
the Liquid Collateral on behalf of the Owner Trustee and on the Delivery
Date, the Indenture Trustee will hold the original counterparts of the
Lease and the Lease Supplement.
(b) Indenture Trustee's Liens. The Indenture Trustee, in its
individual capacity, further represents, warrants and covenants that there are
no Indenture Trustee's Liens attributable to it in its individual capacity and
that there will not be any Indenture Trustee's Liens on the Certificate
Closing Date or, as at and following the Delivery Date, the Aircraft. The
Indenture Trustee, in its individual capacity, covenants and agrees that it
will at its own expense take such action as may be necessary to duly discharge
and satisfy in full, promptly, and in any event within 30 days, after the same
shall first become known to it, any Indenture Trustee's Liens.
(c) Indemnity for Indenture Trustee's Liens. The Indenture Trustee,
in its individual capacity, agrees to indemnify and hold harmless the Lessee,
the Owner Participant, the Owner Trustee and the Pass Through Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Owner Trustee or the Pass
Through Trustee as a result of the failure of the Indenture Trustee to
discharge and satisfy any Indenture Trustee's Liens attributable to it in its
individual capacity, as described in Section 7.05(b) hereof.
Section 7.06. Indenture Trustee's Notice of Default. The Indenture
Trustee agrees to give the Owner Participant notice of any Default or Event of
Default promptly upon a Responsible Officer of the Indenture Trustee having
actual knowledge thereof.
Section 7.07. Releases from Indenture. The Indenture Trustee
covenants and agrees, for the benefit of the Lessee and the Owner Participant,
to execute and deliver the instruments of release from the Lien of the
Indenture which it is required to execute and deliver in accordance with the
provisions of Article XIV of the Indenture, and the Owner Participant agrees,
for the benefit of the Lessee, to cause the Owner Trustee to request the
Indenture Trustee to execute and deliver such instruments of release upon
written notice from the Lessee to make such request.
Section 7.08. Covenant of Quiet Enjoyment. Each of the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the Owner
Trustee covenants and agrees as to itself only that, so long as no Event of
Default under the Lease has occurred and is continuing, neither the Owner
Participant (or the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be) nor any Person lawfully claiming through the
Owner Participant (or the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, as the case may be) shall interfere with the Lessee's right
quietly to enjoy the Aircraft during the Term without hindrance or disturbance
by the Owner Participant (or the Owner Trustee, the Pass Through Trustee or
the Indenture Trustee, as the case may be).
Section 7.09. Pass Through Trustee's Representations and Warranties.
The Pass Through Trustee, in its individual capacity (except with respect to
clause (iii) below), represents and warrants as of the date hereof (except as
otherwise provided), as of the Pass Through Closing Date, the Certificate
Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Pass Through Agreement, the Series Supplements, the Intercreditor
Agreement and this Agreement and to execute and authenticate the Pass
Through Certificates to be delivered on the Pass Through Closing Date;
(ii) the execution, delivery and performance of this Agreement,
the Pass Through Agreement and the Series Supplements and the
performance of its obligations hereunder and thereunder (including the
execution and authentication of the Pass Through Certificates to be
delivered on the Pass Through Closing Date) have been fully authorized
by all necessary corporate action on its part, and, subject to (A) the
registration of the issuance and sale of the Pass Through Certificates
under the Securities Act, (B) compliance with any applicable state
securities laws and (C) the qualification of the Pass Through Agreement
under the Trust Indenture Act, neither the execution and delivery
thereof nor its performance of any of the terms and provisions thereof
will violate any Federal or Utah law or regulation relating to its
banking or trust powers or contravene or result in any breach of, or
constitute any default under its articles of association, or bylaws or
the provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it or its properties may be bound or
affected; and
(iii) each of this Agreement and the Pass Through Agreement has
been, and as of the Pass Through Closing Date the Series Supplements
will be, duly executed and delivered by it (in its individual and trust
capacities) and, assuming that each such agreement is the legal, valid
and binding obligation of each other party thereto, is or will be, as
the case may be, the legal, valid and binding obligation of the Pass
Through Trustee (in its individual and trust capacities), enforceable in
accordance with its respective terms except as limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 7.10. Survival of Representations, Warranties and Covenants.
The representations, warranties and covenants of the Owner Participant, the
Owner Trustee (in its individual or trust capacity), the Pass Through Trustee
(in its individual or trust capacity), the Indenture Trustee (in its
individual or trust capacity) and the Subordination Agent (in its individual
or trust capacity) provided for in this Article 7, and their respective
obligations under any and all of them, shall survive the Closings, the
delivery of the Aircraft and the expiration or other termination of this
Agreement, and the other Operative Agreements.
Section 7.11. Lessee's Assumption of the Certificates. (a) Subject
to compliance by the Lessee with all of its obligations under the Operative
Agreements, each of the Owner Participant, the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Lessee covenants and agrees that if
the Lessee elects to terminate the Lease and to purchase the Aircraft pursuant
to Section 4.02(a)(A), (D) or (E) of the Lease, and so long as no Event of
Default shall have occurred and be continuing then, upon compliance with the
applicable provisions of said Section 4.02(a) of the Lease, the Owner Trustee
will transfer to the Lessee, without recourse or warranty (except as to the
absence of Lessor's Liens attributable to the Owner Trustee) but subject to
the Lien of the Indenture, all of the Owner Trustee's right, title and
interest in and to the Aircraft, and if the Lessee, in connection with such
purchase, elects pursuant to Section 4.02(a)(A), (D) or (E) of the Lease to
assume the obligations of the Owner Trustee to the Indenture Trustee and the
Holders under the Indenture, the Certificates and hereunder, then the Lessee
shall so notify the Indenture Trustee (such notice to be given at least 30 and
not more than 60 days prior to the effective date of such assumption), and
each of the parties shall execute and deliver appropriate documentation
permitting the Lessee to assume such obligations on the basis of full recourse
to the Lessee, maintaining for the benefit of the Holders the security
interest in the Aircraft created by the Indenture, and upon compliance with
the provisions of this Section 7.11 releasing the Owner Participant and the
Owner Trustee from all obligations in respect of the Certificates, the
Indenture, this Agreement and the other Operative Agreements, except any
obligations relating to the period prior to such assumption and take all
such other actions, at the Lessee's expense, as are reasonably necessary to
permit such assumption by the Lessee.
(b) In connection with such assumption:
(i) the Lessee shall execute and deliver an instrument satisfactory
in form and substance to the Indenture Trustee (A) pursuant to which the
Lessee irrevocably and unconditionally assumes and undertakes, with full
recourse to the Lessee, to pay, satisfy and discharge when and as due (at
the stated maturity thereof, by acceleration or otherwise) the principal
of, Make-Whole Premium, if any, interest and all other sums owing on all
Outstanding Certificates (or on the Lessee's substituted obligations) in
accordance with their terms and to punctually perform and observe all of
the covenants and obligations hereunder and under the Indenture and the
Certificates (as the same may be amended in connection with such
assumption) to be performed or observed by the Owner Trustee and (B) which
contains amendments to the Indenture, in form and substance satisfactory to
the Holders and the Indenture Trustee, that incorporate therein such
provisions from the Lease and this Agreement as may be appropriate,
including, without limitation, events of default substantially identical in
scope and effect to those set forth in the Lease and covenants
substantially identical to the covenants of the Lessee hereunder and under
the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
7.11(b), any Uniform Commercial Code financing statements relating thereto,
and any other documents which shall be necessary (or reasonably requested
by the Indenture Trustee) to establish the Lessee's title to and interest
in the Aircraft or to reflect the substitution of the Lessee for the Owner
Trustee under the Operative Agreements or to continue the perfection of the
security interests in the Aircraft and the other rights, Property and
interests included in the Trust Indenture Estate for the benefit of the
Holders (or the Lessee's substituted obligations) shall be filed in such
form, manner and places as are necessary or, in the reasonable opinion of
the Indenture Trustee, advisable for such purpose;
(iii) the Indenture Trustee shall have received an insurance report
dated the effective date of such assumption of an independent insurance
broker and certificates of insurance, each in form and substance
satisfactory to the Indenture Trustee, as to the due compliance as of the
effective date of such assumption with the terms of Article 13 of the Lease
(as it relates to the Indenture Trustee) relating to the insurance with
respect to the Aircraft;
(iv) the Indenture Trustee shall have received evidence that as of
the effectiveness of the assignment on the date of such assumption the
Aircraft is free and clear of all Liens other than the Lien of the
Indenture and other Permitted Liens;
(v) the Indenture Trustee shall have received a certificate from
the Lessee that no Event of Default shall have occurred and be continuing
as of the effective date of such assumption; and
(vi) the Indenture Trustee shall have received (A) from counsel for
the Lessee (who may be the Lessee's General Counsel) a legal opinion, in
form and substance satisfactory to the Indenture Trustee (w) with respect
to the compliance of the assumption contemplated hereby with the terms,
provisions and conditions hereof, (x) with respect to the due
authorization, execution, delivery, validity and enforceability of the
instrument referred to in paragraph (i) of this Section 7.11(b), (y)
with respect to the continued perfection of the first and prior Lien and
security interest in the Aircraft for the benefit of the Holders of the
Certificates (or the Lessee's substituted obligations) referred to in
paragraph (ii) of this Section 7.11(b) and (z) with respect to the
continued availability of the benefits of Section 1110 of the Bankruptcy
Code to the Indenture Trustee for the benefit of the Holders with
respect to the Aircraft after giving effect to such assumption, (B) from
counsel to the Indenture Trustee and Special Aviation Counsel, a legal
opinion comparable to the respective opinions delivered on the
Certificate Closing Date or the Delivery Date, as the case may be, with
such changes therein as may be appropriate in light of such assumption,
and (C) in the case of each opinion described in clause (A) or (B)
above, covering such additional matters as the Indenture Trustee shall
reasonably request.
(c) The Lessee shall pay all reasonable expenses (including
reasonable fees and expenses of counsel) of the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee and the Owner Participant in connection with
such assumption.
Section 7.12. Indebtedness of Owner Trustee. So long as the
Indenture is in effect, the Owner Trustee, not in its individual capacity, but
solely as trustee under the Trust Agreement, shall not incur any indebtedness
for borrowed money except as expressly contemplated herein or in any other
Operative Agreement (excluding the Tax Indemnity Agreement) and shall not
engage in any business or other activity other than the transactions
contemplated herein or in any other Operative Agreement (excluding the Tax
Indemnity Agreement) and all necessary or appropriate activity related
thereto.
Section 7.13. Compliance with Trust Agreement, Etc. Each of the
Owner Participant, SSB and the Owner Trustee agrees with the Lessee, the
Indenture Trustee and the Pass Through Trustee that so long as the Lien of the
Indenture shall be in effect it will (i) comply with all of the terms of the
Trust Agreement applicable to it in its respective capacity, the noncompliance
with which would materially adversely affect any such party and (ii) not take
any action, or cause any action to be taken, to amend, modify or supplement
any other provision of the Trust Agreement in a manner that would materially
adversely affect any such party without the prior written consent of such
party. The Owner Trustee confirms for the benefit of the Lessee, the
Indenture Trustee and the Pass Through Trustee that it will comply with the
provisions of Article 2 of the Trust Agreement. Notwithstanding anything else
to the contrary in the Trust Agreement, so long as the Lease remains in
effect, the Owner Participant agrees not to terminate or revoke the trust
created by the Trust Agreement without the consent of the Lessee. If and so
long as the Indenture shall not have been discharged the consent of the
Indenture Trustee shall also be required prior to any termination or
revocation of such trust and in addition, the Owner Participant will, at the
Lessee's expense, promptly and duly execute and deliver to the Indenture
Trustee such documents and assurances including, without limitation,
conveyances, financing statements and continuation statements with respect to
financing statements and take such further action as the Indenture Trustee may
from time to time reasonably request and furnish in order to protect the
rights and remedies created or intended to be created in favor of the
Indenture Trustee under the Indenture and to create for the benefit of the
Certificate Holders a valid first priority Lien with respect to, and a first
and prior perfected security interest in, the Trust Indenture Estate.
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants. (a) Representations and Warranties. The Subordination Agent
represents and warrants as of the date hereof (except as otherwise provided),
as of the Pass Through Closing Date, the Certificate Closing Date and the
Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the corporate power and authority to enter into and perform its
obligations under this Agreement, the Liquidity Facilities and the
Intercreditor Agreement;
(ii) the execution, delivery and performance of this Agreement, each
of the Liquidity Facilities and the Intercreditor Agreement and the
performance of its obligations hereunder and thereunder have been fully
authorized by all necessary corporate action on its part, and, neither the
execution and delivery thereof nor its performance of any of the terms and
provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under its articles of association, or
bylaws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it or its properties may be
bound or affected;
(iii) each of this Agreement, the Liquidity Facilities and the
Intercreditor Agreement has been duly executed and delivered by it and,
assuming that each such agreement is the legal, valid and binding
obligation of each other party thereto, is or will be, as the case may be,
the legal, valid and binding obligation of the Subordination Agent,
enforceable in accordance with its respective terms except as limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the enforcement
of creditors' rights generally (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(iv) there are no Taxes payable by the Subordination Agent imposed
by the State of Utah or any political subdivision or taxing authority
thereof in connection with the execution, delivery and performance by
the Subordination Agent of this Agreement, any of the Liquidity
Facilities or the Intercreditor Agreement (other than franchise or other
taxes based on or measured by any fees or compensation received by the
Subordination Agent for services rendered in connection with the
transactions contemplated by the Intercreditor Agreement or any of the
Liquidity Facilities), and there are no Taxes payable by the
Subordination Agent imposed by the State of Utah or any political
subdivision thereof in connection with the acquisition, possession or
ownership by the Subordination Agent of any of the Certificates other
than franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered
in connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities);
(v) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent to
perform its obligations under this Agreement, the Intercreditor Agreement
or any Liquidity Facility;
(vi) the Subordination Agent has not directly or indirectly offered
any Certificate for sale to any Person or solicited any offer to acquire
any Certificates from any Person, nor has the Subordination Agent
authorized anyone to act on its behalf to offer directly or indirectly any
Certificate for sale to any Person, or to solicit any offer to acquire any
Certificate from any Person; and the Subordination Agent is not in default
under any Liquidity Facility; and
(vii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter or the Lessee.
(b) Covenants. (i) The Subordination Agent agrees not to amend any
Liquidity Facility without the consent of the Lessee (so long as no Event of
Default shall have occurred and be continuing) and of the Owner Participant
(such consents not to be unreasonably withheld).
(ii) In connection with the deposit in the applicable Cash
Account of amounts drawn pursuant to any Downgrade Drawing under a
Liquidity Facility, the Subordination Agent agrees, so long as no Event of
Default shall have occurred and be continuing, to pay to the Lessee
promptly following each Regular Distribution Date any Investment Earnings
on the amount so deposited which remain after application of such
Investment Earnings pursuant to Section 2.06 of such Liquidity Facility to
the interest payable on such Downgrade Drawing under Section 3.07 of such
Liquidity Facility. Capitalized terms used in this Section shall have the
meanings specified in the Intercreditor Agreement.
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes. (a) Generally. The
Lessee agrees promptly to pay when due, and to indemnify and hold each
Indemnitee harmless from all license, recording, documentary, registration and
other fees and all taxes (including, without limitation, income, gross
receipts, sales, rental, use, value added, property (tangible and intangible),
ad valorem, excise and stamp taxes), fees, levies, imposts, recording duties,
duties, charges, assessments or withholdings of any nature whatsoever,
together with any assessments, penalties, fines, additions to tax or interest
thereon (individually, a "Tax," and collectively called "Taxes"), however
imposed or asserted (whether imposed upon any Indemnitee, the Lessee, all or
any part of the Aircraft, Airframe, any Engine or any Part or the Lessor's
Estate, the Trust Indenture Estate, Rent, the Certificates or otherwise upon
or with respect to any Operative Agreement, any payments thereunder or
otherwise in connection therewith), by any Federal, state or local government
or taxing authority in the United States, or by any government or taxing
authority of a foreign country or of any political subdivision or taxing
authority thereof or by a territory or possession of the United States or an
international taxing authority relating to or measured by:
(i) the construction, mortgaging, financing, refinancing, purchase,
acceptance, rejection, delivery, nondelivery, transport, location, ownership,
registration, reregistration, deregistration, insuring, assembly, possession,
repossession, operation, use, non-use, condition, maintenance, repair,
improvement, conversion, sale, return, abandonment, preparation, installation,
storage, redelivery, replacement, manufacture, leasing, subleasing,
sub-subleasing, modification, alteration, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application or
disposition of, or the imposition of any Lien (or the incurrence of any
liability to refund or pay over any amount as a result of any Lien) on, the
Aircraft, the Airframe, any Engine or any Part or any interest therein;
(ii) amounts payable under the Operative Agreements;
(iii) the Property, or the income or other proceeds received with
respect to the Property attributable to the transactions contemplated by
the Operative Agreements, held by the Owner Trustee under the Trust
Agreement or after an Event of Default under the Lease, or by the Indenture
Trustee under the Indenture;
(iv) otherwise with respect to any Operative Agreement, any
interest therein or by reason of the transactions described in or
contemplated by the Operative Agreements;
(v) the principal or interest or other amounts payable with respect
to the Certificates;
(vi) the Pass Through Certificates or the Certificates or the
issuance, sale, acquisition, reoptimization, or refinancing thereof or the
beneficial interests in the Trust Estate or the Trust Indenture Estate or
the creation thereof under the Trust Agreement or the Indenture, or the
security interest created or perfected thereby or by any filing thereof;
(vii) any assumption by the Lessee pursuant to Section 7.11 of this
Agreement and Section 2.12 of the Indenture;
(viii) the Aircraft, the Airframe, any Engine or any Part; or
(ix) the rentals (including Basic Rent, Renewal Rent and
Supplemental Rent), receipts or earnings arising from the Operative
Agreements.
(b) Exceptions. The indemnity provided for in Section 8.01(a) shall
not extend to any of the following:
(i) With respect to an Indemnitee, Taxes based upon, measured by or
with respect to the net or gross income, items of tax preference or minimum
tax or excess profits, receipts, value-added taxes, capital, franchise, net
worth (whether denominated income, excise, capital stock, or doing
business taxes) or other similarly-based taxes (other than sales, use,
transfer, rental, ad valorem, stamp, property, or similar taxes) ("Income
Taxes"), provided, however, that this clause (i) shall not exclude from the
indemnity described in Section 8.01(a) above any such Income Taxes to the
extent such taxes are imposed by any jurisdiction in which the Indemnitee
would not be subject to such taxes but for, or would be subject to such
taxes solely as a result of, (x) the operation, registration, location,
presence, or use of the Aircraft, Airframe, any Engine or any Part thereof,
in such jurisdiction or (y) the place of incorporation or principal office
or the activities of the Lessee or any sublessee in such jurisdiction (it
being understood that (A) any such indemnity would be payable only to the
extent of the net harm incurred by the Indemnitee from such Income Taxes,
taking into account any incremental current Tax benefit in another tax
jurisdiction resulting from payment of such Income Taxes and (B) this
sentence would require indemnification in a jurisdiction in which the
Indemnitee is already subject to an Income Tax (an "Existing Income Tax")
only if an event set forth in Clause (x) or (y) of this sentence causes the
Indemnitee to be subject to an Income Tax in that jurisdiction (a "New
Income Tax") other than an Existing Income Tax, and such New Income Tax
would have been imposed even if the activities contemplated by the
Operative Agreements were the Indemnitee's sole nexus to the jurisdiction);
provided, further, that the provisions of this paragraph (b)(i) relating to
Income Taxes shall not exclude from the indemnity described in Section
8.01(a) hereof any Income Taxes for which the Lessee would be required to
indemnify an Indemnitee (x) so that any payment under the Operative
Agreements, otherwise required to be made on an After-Tax Basis, is made on
an After-Tax Basis or (y) pursuant to the last sentence of Section 8.02,
8.05, 9.02 or 9.05 of this Agreement;
(ii) [Reserved];
(iii) Taxes imposed with respect to the Aircraft and arising out
of or measured by acts, omissions, events or periods (or any combination
of the foregoing) which occur after the later of (A) the payment in full
of all amounts payable by the Lessee pursuant to and in accordance with
the Operative Agreements, or the earlier discharge in full of the
Lessee's payment obligations under and in accordance with the Lease and
the Operative Agreements, and (B) the earliest of (x) the expiration of
the Term of the Lease and return of the Aircraft in accordance with
Article 12 of the Lease, (y) the termination of the Lease in accordance
with the applicable provisions of the Lease and return of the Aircraft
in accordance with the Lease, or (z) the termination of the Lease in
accordance with the applicable provisions of the Lease and the transfer
of all right, title and interest in the Aircraft to the Lessee pursuant
to its exercise of any of its purchase options set forth in Section
4.02(a) of the Lease, provided that this exclusion (iii) shall not apply
in respect of any payment made after the dates set forth in clauses (A)
and (B) above unless such payment is made with respect to any event or
circumstance occurring on, with or prior to such return or transfer or
period prior to such return or transfer, or Taxes incurred in connection
with the exercise of any remedies pursuant to Article 17 of the Lease
following the occurrence of an Event of Default;
(iv) As to the Owner Trustee, Taxes imposed against the Owner
Trustee upon or with respect to any fees for services rendered in its
capacity as Owner Trustee under the Trust Agreement or, as to the
Indenture Trustee, Taxes imposed against the Indenture Trustee upon or
with respect to any fees received by it for services rendered in its
capacity as Indenture Trustee under the Indenture;
(v) Taxes imposed on an Indemnitee that would not have been imposed
but for the willful misconduct or gross negligence of such Indemnitee
(other than gross negligence or willful misconduct not actually committed
by but instead imputed to such Indemnitee by reason of such Indemnitee's
participation in the transactions contemplated by the Operative Agreements)
or the breach by such Indemnitee of: (i) in the case of an Indemnitee other
than the Owner Participant, any representation, warranty or covenant
contained in the Operative Agreements or any document delivered in
connection therewith and (ii) in the case of the Owner Participant, the
representations or covenants in Sections 7.02(a), (c); 7.03(a)(i), (ii),
(iii), (iv), (vii), (ix); and 7.03(b), (c), (d), (e) of this Agreement (in
either case unless attributable to a breach of representation, warranty or
covenant of the Lessee);
(vi) Taxes imposed on, and not collected by withholding from
payments of Rent, the Owner Trustee or the Owner Participant or any
successor, assign or Affiliate thereof which became payable by reason of
any voluntary or involuntary transfer or disposition by such Indemnitee
subsequent to the Delivery Date, including revocation of the Trust, of any
interest in some or all of the Aircraft, Airframe, Engines or Parts thereof
or its interest in the Lessor's Estate (not including any transfers of any
Certificates pursuant to Section 15.01(a) hereof) or a disposition in
connection with a bankruptcy or similar proceedings involving either the
Lessor or the Owner Participant other than (A) transfers resulting from a
loss, substitution or modification of the Aircraft, Engines or any Part,
(B) any transfer of the Aircraft, Engines or any Part (in each case other
than at Fair Market Value) to the Lessee or other person in possession
thereof, (C) transfers attributable to an Event of Default or (D) a
transfer pursuant to the Lessee's exercise of its rights under Section
10.01 of the Lease; the parties agree to cooperate to minimize any such
Taxes covered by this provision;
(vii) Taxes imposed on the Owner Participant for which the Lessee is
obligated to indemnify the Owner Participant pursuant to the Tax Indemnity
Agreement;
(viii) Taxes imposed on a successor, assign or other transferee
of the Owner Participant or the Owner Trustee that is not a U.S. Person
or an Indemnitee as of the date hereof under the Operative Agreements
(including, without limitation, a transferee which is a new lending
office of an original Indemnitee) which on the Certificate Closing Date
is an Indemnitee (for purposes of this clause (viii), an "original
Indemnitee") or such original Indemnitee to the extent that such Taxes
exceed the amount of Taxes that would have been imposed and would have
been indemnifiable pursuant to Section 8.01(a) hereof had there not been
a succession, assignment or other transfer by such original Indemnitee
of any such interest of such Indemnitee in the Aircraft or any Part, any
interest in or under any Operative Agreement, or any proceeds thereunder
(it being understood that for purposes of determining the amount of
indemnification that would have been due to such original Indemnitee
with respect to a net income Tax, it shall be assumed that such original
Indemnitee would be subject to taxation on its income at the highest
marginal statutory rate applicable to it), provided, however, that the
exclusion provided by this clause (viii) shall not apply in the case of
a succession, transfer or disposition (A) that occurs after the Lease
has been declared in default or if such transfer or disposition is
pursuant to the exercise of remedies under Article 17 of the Lease, (B)
which is an actual or deemed transfer pursuant to Section 7.11 hereof or
as a consequence of a Refinancing under Section 15.01 hereof, or any
actual or deemed transfer of a Certificate that as part of a Refinancing
under Section 15.01 hereof is not retired, but only to the extent the
Taxes attributable to such transfer exceed the amount of Taxes that
would have been imposed on such transferor if the debt had instead been
retired, (C) to the extent necessary to make payments with respect to
such Taxes on an After-Tax Basis, (D) to the extent such Taxes are
directly attributable to the failure of the Lessee to take
administrative actions as have been reasonably requested of it in
writing in a timely manner and which will result in no after-tax cost or
expense to the Lessee or (E) in the case of the Owner Participant or the
Lessor, to any Tax other than an Income Tax;
(ix) [Reserved];
(x) Any Taxes which have been included in the Purchase Price and
which have been paid to the applicable taxing authorities;
(xi) Any Taxes which would not have been imposed but for a Lessor's
Lien or an Indenture Trustee's Lien; and
(xii) Any Taxes imposed on the Owner Participant arising under or in
connection with any prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975(c)(1) of the Code ("Prohibited Transaction");
provided, however, that in the event any prohibited transaction arises
which is not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually or
collectively, a "PTE") then the indemnity provided for herein shall extend
to any Taxes incurred by the Owner Participant (or any Affiliate thereof)
as the result of any Prohibited Transaction arising out of the purchase or
holding of any Loan Certificates by an employee benefit plan subject to
Title I of ERISA or by a plan subject to Section 4975 of the Code
(individually or collectively, an "ERISA Plan") with respect to which the
Owner Participant is a party in interest, within the meaning of Section
3(14) of ERISA, or a disqualified person,within the meaning of Section 4975
of the Code, except, however, that such Indemnity shall not extend to any
Taxes incurred by the Owner Participant (or any Affiliate thereof) as the
result of any Prohibited Transaction occurring with respect to the purchase
or holding of any Loan Certificates (A) over which purchase or holding the
Owner Participant (or an Affiliate thereof) has discretion or control
(other than in the capacity of a custodian, directed trustee or other
similar nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan sponsor"
within the meaning of Section 3(16)(B) of ERISA.
(c) Withholding. The Pass Through Trustee shall withhold any Taxes
required to be withheld on payments to any holder of a Pass Through
Certificate who is a Non-U.S. Person except to the extent that such a holder
of a Pass Through Certificate has furnished evidence to the Pass Through
Trustee sufficient under applicable law to entitle such holder of a Pass
Through Certificate to any exemption from or reduction in the rate of
withholding on interest claimed by such holder of a Pass Through Certificate.
The Indenture Trustee shall withhold any Taxes required to be withheld on any
payment to a Holder pursuant to Section 5.09 of the Indenture. If the
Indenture Trustee or the Pass Through Trustee fails to withhold a Tax required
to be withheld with respect to any Holder of a Certificate or any holder of a
Pass Through Certificate or any claim is otherwise asserted by a taxing
authority against the Owner Trustee or Owner Participant for any withholding
tax, the Lessee will indemnify the Owner Trustee and the Owner Participant
(without regard to the exclusions set forth in Section 8.01(b) hereof) on an
After-Tax Basis against any such Taxes required to be withheld and any
interest and penalties with respect thereto, along with any other costs
(including reasonable attorney's fees) incurred in connection with any such
claim. The Indenture Trustee or the Pass Through Trustee, as the case may be,
in its individual capacity (and without recourse to the Trust Indenture
Estate), shall indemnify the Lessee (without regard to the exclusions set
forth in Section 8.01(b) hereof) on an After-Tax Basis for any payment the
Lessee shall have made pursuant to the preceding sentence.
Section 8.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Tax indemnified against under Section 8.01
shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Tax not
been incurred, provided that the calculation of any additional amounts owing
to any Indemnitee as a result of the Lessee's obligation to indemnify on an
After-Tax Basis shall be made without regard to the exclusions set forth in
Section 8.01(b). If any Indemnitee actually realizes a tax benefit by
reason of the payment of any Tax paid or indemnified against by the Lessee,
such Indemnitee shall promptly pay to the Lessee, to the extent such tax
benefit was not previously taken into account in computing such payment,
but not before the Lessee shall have made all payments then due to such
Indemnitee under this Agreement, the Tax Indemnity Agreement and any other
Operative Agreement, an amount equal to the lesser of (x) the sum of such
tax benefit plus any other tax benefit actually realized by such Indemnitee
that would not have been realized but for any payment made by such
Indemnitee pursuant to this sentence and not already paid to the Lessee,
and (y) the amount of the payment made under Section 8.01 hereof and this
Section 8.02 by the Lessee to such Indemnitee plus the amount of any other
payments by the Lessee to such Indemnitee theretofore required to be made
under this Section 8.02 and Sections 8.01 and 8.05 hereof (and the excess,
if any, of the amount described in clause (x) above over the amount
described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments
to such Indemnitee pursuant to Section 8.01 hereof); provided, however,
that notwithstanding the foregoing portions of this sentence, such
Indemnitee shall not be obligated to make any payment to the Lessee
pursuant to this sentence as long as an Event of Default shall have
occurred and be continuing under the Lease. The Lessee shall reimburse on
an After-Tax Basis such Indemnitee (and without regard to Section 8.01(b)
hereof, except for clause (v) thereof) for any payment of a tax benefit
pursuant to the preceding sentence (or a tax benefit otherwise taken into
account in calculating the Lessee's indemnity obligation hereunder) to the
extent that such tax benefit is subsequently disallowed or reduced
(including the expiration of any tax credit carryovers or carrybacks of
such Indemnitee that would not otherwise have expired).
Section 8.03. Time of Payment. Any amount payable to an Indemnitee
pursuant to this Article 8 shall be paid promptly, but in any event within 30
days after receipt of a written demand therefor from such Indemnitee
accompanied by a written statement describing in reasonable detail the basis
for such indemnity and the computation of the amount so payable, provided that
in the case of amounts which are being contested by the Lessee in good faith
or by the Indemnitee in either case pursuant to Section 8.04 hereof, such
amount shall be payable within 30 days after the time such contest is finally
resolved.
Section 8.04. Contests. If a written claim is made against any
Indemnitee for Taxes with respect to which the Lessee is liable for a payment
or indemnity hereunder, such Indemnitee shall promptly (but in any event
within 30 days of receipt thereof) give the Lessee notice in writing of such
claim and shall furnish the Lessee with copies of any written requests for
information sent to such Indemnitee (and not the Lessee) from any taxing
authority to the extent relating to such Taxes with respect to which the
Lessee may be required to indemnify hereunder and with respect to which it
would be necessary or beneficial to have information provided by the Lessee;
provided, however, that the failure of an Indemnitee to give such notice or
furnish such copy shall not terminate any of the rights of such Indemnitee
under this Article 8, except to the extent that the Lessee's contest rights
have been materially and adversely impaired by the failure to provide such
notice or copy. The Lessee may, at its option, contest in its own name or, if
required by law, require the Indemnitee to contest in good faith, with due
diligence and at the Lessee's expense, if timely requested in writing by the
Lessee, the validity, applicability or amount of such Taxes by:
(i) resisting payment thereof if lawful and practicable or not
paying the same except under protest if protest is necessary and proper in
each case so long as non-payment will not result in a material risk of the
sale, forfeiture or loss of, or the creation of a Lien other than a
Lessor's Lien on the Aircraft, Airframe or any Engine or any risk of
criminal liability; or
(ii) if the payment be made, using reasonable efforts to obtain a
refund thereof in appropriate administrative and judicial proceedings.
Notwithstanding the foregoing, the Lessee shall not be permitted or entitled
to contest any such Tax in its own name unless the Tax is reflected in a
report or a return of the Lessee or raised in an audit or other proceeding of
the Lessee and the Lessee is allowed to directly contest such Tax under
applicable law of the taxing jurisdiction provided, that if the Lessee is so
permitted under applicable law to contest a Tax asserted against the Lessee
and the same or similar Tax is also asserted against the Indemnitee, each of
the Lessee and such Indemnitee shall conduct its contest in its own name and
the Lessee and such Indemnitee will cooperate in a reasonable manner with
respect to the respective contests of such Tax.
If the Indemnitee, after reasonable discussion with the Lessee and
consideration in good faith of any suggestion made by the Lessee as to the
method of pursuing such contest, elects to conduct the contest, such
Indemnitee shall control the contest and shall determine the manner in which
to contest such Taxes and shall periodically or upon the Lessee's request
advise the Lessee of the progress of such contest; provided, however, that the
Lessee shall have the right to be consulted in good faith with respect to any
contest of claims subject to indemnification hereunder, including governmental
and judicial conferences and the right to be consulted in good faith regarding
the relevant portions of all related submissions to any governmental or other
authority, provided, however, that the Lessee shall be permitted to
participate in any such contest only (x) with respect to issues that can be
separated on audit from any Taxes for which the Lessee is not required to
indemnify the Indemnitee hereunder, and (y) if the Indemnitee shall have
determined that in its judgment, exercised in its sole discretion, neither
such participation nor the separation of issues will adversely affect the
Indemnitee. The Indemnitee will not settle a contest that results in a final
determination without consent of the Lessee, unless the Indemnitee waives its
right to indemnification with respect to such contest and any related contest.
Notwithstanding the preceding sentences of this Section 8.04, such Indemnitee
shall not be required to take or continue any action unless the Lessee shall
have (i) agreed in writing to pay and shall pay the Indemnitee on a current
basis and on an After-Tax Basis the after-tax cost of all reasonable fees and
expenses (including reasonable attorneys' fees and accountants' fees) which
such Indemnitee may incur as a result of contesting such Taxes, (ii) made all
payments and indemnities (other than contested payments and indemnities) then
due to the Indemnitee hereunder or with respect to any of the transactions
contemplated by or under the Operative Agreements and (iii) acknowledged in
writing the Lessee's obligation to such Indemnitee pursuant to this Agreement
to the extent that the contest is not successful, unless it is reasonably
clear from the resolution of the contest that an exclusion set forth in
Section 8.01(b) hereof applies. In no event shall such Indemnitee be required
or the Lessee be permitted to contest pursuant to this Section 8.04 the
imposition of any Tax for which the Lessee is obligated to indemnify any
Indemnitee hereunder unless (i) such Indemnitee shall have received, at the
Lessee's expense, an opinion of its tax counsel, such counsel to be reasonably
satisfactory to the Lessee ("Tax Counsel"), to the effect that there exists a
reasonable basis for contesting such claim, (ii) such Indemnitee (and, if such
Indemnitee is not the Owner Participant, the Owner Participant and such
Indemnitee) shall have determined that such contest will not result in any
material risk of loss, sale or forfeiture of, or the creation of a Lien (other
than Lessor's Liens) on, the Aircraft or any part thereof or interest thereon
or in a risk of criminal liability, or adversely affect the Trust Indenture
Estate, (iii) if a Payment Default, Bankruptcy Default or an Event of Default
shall have occurred and be continuing, the Lessee shall have provided security
for its obligations hereunder reasonably satisfactory to the Indemnitee, (iv)
if such contest shall be conducted in a manner requiring payment of the claim
in advance, the Lessee shall have advanced sufficient funds, on an interest
free basis, to make the payment required, and agreed to indemnify the
Indemnitee against any additional net adverse tax consequences on an After-Tax
Basis to such Indemnitee of such advance, (v) the issue shall not be the same
as an issue previously contested hereunder and decided adversely, unless the
Indemnitee shall have received at the Lessee's sole expense, a written
opinion, in form and substance reasonably satisfactory to such Indemnitee, of
Tax Counsel to the effect that the applicable circumstances or law has changed
and that in light thereof, there is substantial authority for contesting such
claim and (vi) the amount of the indemnity payments the Lessee would be
required to make with respect to such adjustment, when aggregated with similar
adjustments that could be raised in other taxable years of such Indemnitee
exceeds $50,000; provided, that in the event that such Indemnitee is not
required under this paragraph to contest any Tax liability for which the
Lessee is obligated to indemnify any Indemnitee, the Lessee may contest such
Tax liability in the name of the Lessee, if permitted by law. The Lessee may
appeal or require the Indemnitee to appeal any judicial decision provided the
foregoing requirements of this Section 8.04 are met and the Indemnitee shall
have received, at the Lessee's expense, an opinion of Tax Counsel, to the
effect that there is substantial authority for such appeal.
Nothing contained in this Section 8.04 shall require any
Indemnitee to contest or continue to contest, or permit Lessee to contest,
a claim which such Indemnitee would otherwise be required to contest
pursuant to this Section 8.04, if such Indemnitee shall waive payment by
Lessee of any amount that might otherwise be payable by Lessee under this
Article 8 in connection with such claim.
Section 8.05. Refunds. Upon receipt by an Indemnitee of a refund of
all or any part of any Taxes which the Lessee shall have paid for such
Indemnitee or for which the Lessee shall have reimbursed or indemnified such
Indemnitee, and provided there shall not have occurred and be continuing any
Payment Default, Bankruptcy Default or Event of Default by the Lessee
hereunder or under the Lease (in which case payment shall not be made to the
Lessee until such Payment Default, Bankruptcy Default or Event of Default
shall have been cured), such Indemnitee shall pay to the Lessee an amount
equal to the amount of such refund less (x) any expenses not previously
reimbursed, (y) all payments then due to such Indemnitee under this Article
8 and (z) Taxes imposed with respect to the accrual or receipt thereof,
including interest received attributable thereto, plus any tax benefit
actually realized by such Indemnitee as a result of any payment by such
Indemnitee made pursuant to this sentence; provided, however, that such amount
shall not be payable (a) before such time as the Lessee shall have made all
payments or indemnities then due and payable to such Indemnitee under this
Article 8 and (b) to the extent that the amount of such payment would exceed
(i) the amount of all prior payments by the Lessee to such Indemnitee pursuant
to this Article 8 less (ii) the amount of all prior payments by such
Indemnitee to the Lessee pursuant to this Article 8.
Any subsequent loss of such refund or tax benefit shall be treated as
a Tax subject to indemnification under the provisions of this Article 8 (in
the case of any such tax benefit, without regard to Section 8.01(b) hereof).
Section 8.06. Lessee's Reports. In case any report or return is
required to be made with respect to any Taxes against which the Lessee is or
may be obligated to indemnify the Indemnitees under this Article 8, the Lessee
shall make such report or return, except for any such report or return that
the Indemnitee has notified the Lessee that it intends to file, in such manner
as will show the ownership of the Aircraft in the Owner Trustee and shall send
a copy of the applicable portions of such report or return to the Indemnitee
and the Owner Trustee or will notify the Indemnitee of such requirement and
make such report or return in such manner as shall be satisfactory to such
Indemnitee and the Owner Trustee. The Lessee will provide such information
reasonably available to the Lessee as the Indemnitee may reasonably require
from the Lessee to enable the Indemnitee to fulfill its tax filing
requirements with respect to the transactions contemplated by the Operative
Agreements (without duplication of the requirements of Section 3 of the Tax
Indemnity Agreement) and any audit information request arising from any such
filing. The Indemnitee will provide such information reasonably available to
it as the Lessee may reasonably require from such Indemnitee to enable the
Lessee to fulfill its tax filing requirements with respect to the transactions
contemplated by the Operative Agreements and any audit information request
arising from such filing; provided that in no event shall any Indemnitee be
required to provide copies of any of its tax returns or other confidential
information. The Lessee shall hold the Indemnitee harmless on an After-Tax
Basis from and against any liabilities, including penalties, additions to tax,
fines and interest, imposed upon or incurred by such Indemnitee to the extent
directly attributable to any insufficiency or inaccuracy in any return,
statement, or report prepared by the Lessee or information supplied by the
Lessee, or directly attributable to the Lessee's failure to supply reasonably
available information to such Indemnitee as required by this Section 8.06.
Section 8.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 8 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of the Operative Agreements.
Section 8.08. Payment of Taxes. With respect to any Tax otherwise
indemnifiable hereunder by the Lessee and applicable to the Aircraft,
Airframe, any Engine or Parts, to the extent permitted by the applicable
federal, state, local or foreign law, the Lessee shall pay such tax directly
to the relevant Taxing authority and file any returns or reports required with
respect thereto to the extent legally entitled to do so in its own name;
provided, however, that the Lessee shall not make any statements or take any
action which would indicate that the Lessee or any Person other than the Owner
Trustee or Owner Participant is the owner of the Aircraft, the Airframe, any
Engine or any Part or which would otherwise be inconsistent with the terms of
the Lease or the Tax Indemnity Agreement and the position thereunder of the
Owner Trustee and the Owner Participant. Copies of such returns or reports,
together with evidence of payment of any tax due, shall be sent by the Lessee
to the Owner Participant within thirty (30) days after the date of each
payment by the Lessee of any Tax.
Section 8.09. Reimbursements by Indemnitees Generally. To the
extent the Lessee is required to pay or withhold any Tax imposed on or with
respect to an Indemnitee in respect of the transactions contemplated by the
Operative Agreements, which Tax is not otherwise the responsibility of the
Lessee under the Operative Agreements, or any other written agreements between
the Lessee and such Indemnitee, then such Indemnitee shall pay to the Lessee
within 30 days of the Lessee's demand therefor an amount which equals the
amount actually paid by the Lessee with respect to such Taxes.
Section 8.10. Special Indemnity. Notwithstanding anything in this
Article 8 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally. (a) The Lessee agrees to indemnify each
Indemnitee against and agrees to protect, defend, save and keep harmless each
Indemnitee from any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, disbursements and expenses
(including legal fees and expenses and all costs and expenses relating to
amendments, supplements, adjustments, consents, refinancings and waivers under
the Operative Agreements except as otherwise provided in Section 10.01(c)(i)
or Article 15 hereof) of every kind and nature, including without limitation
Make-Whole Premium (unless excluded pursuant to Section 3.03 of the Lease)
(whether or not any of the transactions contemplated by this Agreement are
consummated) (individually, an "Expense," collectively, "Expenses"), which
may be imposed on, incurred or suffered by or asserted against any Indemnitee,
in any way relating to, based on or arising out of:
(i) this Agreement (including, without limitation, the execution,
delivery and performance hereof by the Owner Participant prior to the
delivery of the Aircraft), the Lease, the Indenture, the Trust Agreement,
the Intercreditor Agreement, the Liquidity Facilities, the Pass Through
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale or any
other Operative Agreement or any other document entered into in connection
herewith or any sublease or transfer or any transactions contemplated
hereby or thereby;
(ii) the operation, possession, use, non-use, maintenance, storage,
overhaul, delivery, non-delivery, control, repair or testing of the
Aircraft, Airframe, or any Engine or any engine used in connection with the
Airframe, or any part thereof by the Lessee, any sublessee or any other
Person whatsoever, whether or not such operation, possession, use, non-use,
maintenance, storage, overhaul, delivery, non-delivery, control, repair or
testing is in compliance with the terms of the Lease, including without
limitation, claims for death, personal injury or property damage or other
loss or harm to any Person whatsoever, including, without limitation, any
passengers, shippers or other Persons wherever located, and claims relating
to any laws, rules or regulations, including, without limitation,
environmental control, noise and pollution laws, rules or regulation;
(iii) the manufacture, design, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration, import,
export, performance, non-performance, lease, sublease, transfer,
merchantability, fitness for use, alteration, substitution or replacement
of any Airframe, Engine, or Part under the Lease, the Purchase Agreement,
the Purchase Agreement Assignment, the GTA or the Engine Warranty
Assignment or other transfer of use or possession, or other disposition of
the Aircraft, the Airframe, any Engine or any Part including, without
limitation, latent and other defects, whether or not discoverable, strict
tort liability, and any claims for patent, trademark or copyright
infringement;
(iv) any breach of or failure to perform or observe, or any other
non-compliance with, any condition, covenant or agreement to be performed,
or other obligations of the Lessee under any of the Operative Agreements,
or the falsity or inaccuracy of any representation or warranty of the
Lessee in any of the Operative Agreements (other than representations and
warranties in the Tax Indemnity Agreement);
(v) the Collateral Account and the Liquid Collateral;
(vi) the enforcement of the terms of the Operative Agreements and
the administration of the Trust Indenture Estate; and
(vii) the offer, issuance, sale or delivery of any Certificate or any
Pass Through Certificate, or any refunding or refinancing thereof, or
interest in the Lessor's Estate or the Trust Agreement or any similar
interest or in any way relating to or arising out of the Trust Agreement
and the Lessor's Estate, the Indenture or the Trust Indenture Estate
(including, without limitation, any claim arising out of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, or
any other federal or state statute, law or regulation, or at common law or
otherwise relating to securities), or the action or inaction of the Owner
Trustee or Indenture Trustee as trustees, in the manner contemplated by
this Agreement, the Indenture, the Indenture and Security Agreement
Supplement or the Trust Agreement and in the case of the Owner Participant,
its obligations arising under Section 6.01 of the Trust Agreement.
The foregoing indemnity by the Lessee is intended to include and cover, but is
not limited to, any Expense to which the Indemnitees may be subject as a
result of their respective ownership or leasing of any interest in or holding
of any Lien on the Aircraft, Airframe, any Engine or Part during the Term,
whether or not in the Lessee's possession or control, insofar as such Expense
relates to any activity or event whatsoever involving such item while it is
under lease to the Lessee (or after termination of the Lease in connection
with the exercise of remedies thereunder to the extent that such Expense is
attributable to the transactions contemplated hereby and by the other
Operative Agreements), and such Expense does not fall within any of the
exceptions listed in Section 9.01(b) hereof.
(b) Exceptions. The indemnity provided for in Section 9.01(a) shall
not extend to any Expense of any Indemnitee to the extent it:
(i) would not have occurred but for the willful misconduct or gross
negligence of such Indemnitee;
(ii) after the Delivery Date, is in respect of the Aircraft, and is
attributable to acts or events which occur after the Aircraft is no longer
part of the Lessor's Estate or, if the Aircraft remains a part of the
Lessor's Estate, after the expiration of the Term (unless the Aircraft is
being returned at such time, in which case after return of physical
possession; provided that if the Lease has been terminated pursuant to
Article 17 thereof, the indemnity provided in Section 9.01(a) hereof shall
survive for so long as Lessor or the Indenture Trustee shall be exercising
remedies under such Article 17), or to acts or events which occur after
return of possession of the Aircraft by the Lessee in accordance with the
provisions of the Lease (subject to the foregoing proviso if the Lessor has
terminated the Lease pursuant to Article 17 of the Lease) but in any such
case only to the extent not fairly attributable to acts or omissions of the
Lessee prior to expiration of the Term, including without limitation the
Lessee's failure to fully discharge all of its obligations under the Lease
or the other Operative Agreements;
(iii) is a Tax, whether or not the Lessee is required to indemnify
therefor pursuant to Article 8 hereof or pursuant to the Tax Indemnity
Agreement;
(iv) is a cost or expense required to be paid by the Owner
Participant or its permitted transferees (and not by the Lessee) pursuant
to this Agreement or any other Operative Agreement and for which the Lessee
is not otherwise obligated to reimburse the Owner Participant, directly or
indirectly pursuant to the terms of this Agreement or such other Operative
Agreement;
(v) would not have been incurred by such Indemnitee if such
Indemnitee had not been in breach of its representations or warranties, or
had not defaulted in the observance and performance of the terms and
provisions required to be observed and performed by it, in this Agreement,
the Purchase Agreement Assignment, the Lease, the Indenture, the Trust
Agreement or any other Operative Agreement to which it is a party unless
such breach or default shall be a result of the breach or default by the
Lessee of any of its obligations under the Operative Agreements or by
another Indemnitee of any of the foregoing;
(vi) [reserved];
(vii) is, in the case of the Owner Participant, Lessor's Liens to the
extent attributable to the Owner Participant; in the case of the Owner
Trustee, Lessor's Liens to the extent attributable to the Owner Trustee; in
the case of SSB, Lessor's Liens to the extent attributable to SSB; and in
the case of the Indenture Trustee, Indenture Trustee's Liens;
(viii) is, in the case of the Owner Participant or the Owner Trustee,
attributable to the offer or sale by such Indemnitee after the Certificate
Closing Date of any interest in the Aircraft, the Lessor's Estate or the
Trust Agreement or any similar interest (including an offer or sale
resulting from bankruptcy or other proceedings for the relief of debtors in
which such Indemnitee is the debtor), unless in each case such offer or
sale shall occur (x) in connection with a Refinancing, (y) as a result of
the occurrence of an Event of Default provided that either the Lease has
been declared in default or the transfer is pursuant to the exercise of
remedies under Article 17 of the Lease or (z) in connection with the
Lessee's exercise of its early termination option under Article 10 of the
Lease or its purchase options under Article 4 of the Lease or in connection
with Article 11 of the Lease;
(ix) is an Expense arising under or in connection with any
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code ("Prohibited Transaction"); provided,
however, that in the event any prohibited transaction arises which is
not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually
or collectively, a "PTE") then the indemnity provided for herein shall
extend to any Expenses incurred by the Owner Participant (or any
Affiliate thereof) as the result of any Prohibited Transaction arising
out of the purchase or holding of any Certificates by an employee
benefit plan subject to Title I of ERISA or by a plan subject to Section
4975 of the Code (individually or collectively, an "ERISA Plan") with
respect to which the Owner Participant is a party in interest, within
the meaning of Section 3(14) of ERISA, or a disqualified person,within
the meaning of Section 4975 of the Code, except, however, that such
Indemnity shall not extend to any Expenses incurred by the Owner
Participant (or any Affiliate thereof) as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Certificates (A) over which purchase or holding the Owner Participant
(or an Affiliate thereof) has discretion or control (other than in the
capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA.
Section 9.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Expense indemnified against under Section
9.01 shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Expense not
been incurred. If any Indemnitee actually realizes a permanent Tax benefit by
reason of the payment of such Expense paid or indemnified against by the
Lessee which was not considered in the computation thereof, such Indemnitee
shall promptly pay to the Lessee, but not before the Lessee shall have made
all payments theretofore due such Indemnitee under this Agreement, the Tax
Indemnity Agreement and any other Operative Agreement, an amount equal to the
lesser of (x) the sum of such Tax benefit plus any other permanent Tax benefit
actually realized by such Indemnitee as the result of any payment made by such
Indemnitee pursuant to this sentence and (y) the amount of such payment
pursuant to this Section 9.02 by the Lessee to such Indemnitee plus the amount
of any other payments by the Lessee to such Indemnitee theretofore made
pursuant to this Section 9.02 less the amount of any payments by such
Indemnitee to the Lessee theretofore made pursuant to this Section 9.02 (and
the excess, if any, of the amount described in clause (x) above over the
amount described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments to
such Indemnitee pursuant to this Section 9.02), it being intended that no
Indemnitee should realize a net Tax benefit pursuant to this Section 9.02
unless the Lessee shall first have been made whole for any payments by it to
such Indemnitee pursuant to this Section 9.02; provided, however, that
notwithstanding the foregoing portions of this sentence, such Indemnitee shall
not be obligated to make any payment to the Lessee pursuant to this sentence
so long as an Event of Default shall have occurred and be continuing. Any
Taxes that are imposed on any Indemnitee as a result of the disallowance or
reduction of such Tax benefit referred to in the next preceding sentence in a
taxable year subsequent to the year of allowance and utilization by such
Indemnitee (including the expiration of any tax credit carryovers or
carrybacks of such Indemnitee that would not otherwise have expired) shall be
indemnifiable pursuant to the provisions of Section 8.01 hereof without regard
to Section 8.01(b) hereof.
Section 9.03. Subrogation. Upon the payment in full of any
indemnity pursuant to this Article 9 by the Lessee (but not earlier), the
Lessee shall be subrogated to any right of the Indemnitee, other than with
respect to any of such Indemnitee's insurance policies or in connection
with any indemnity claim the Person indemnified may have against any other
Indemnitee in respect of the matter against which such indemnity has been
made.
Section 9.04. Notice and Payment. Each Indemnitee and the Lessee
shall give prompt written notice one to the other of any liability of which
such party has received notice for which the Lessee is, or may be, liable
under this Article 9; provided, however, that failure to give such notice
shall not terminate any of the rights of the Indemnitees under this Article 9,
except (with respect to such Indemnitee) to the extent that the Lessee has
been materially prejudiced by the failure to provide such notice. Unless
otherwise provided in the Operative Agreements, any amount payable to an
Indemnitee pursuant to this Article 9 shall be paid within 30 days after
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the basis for such indemnity
and the computation of the amount so payable.
Section 9.05. Refunds. If any Indemnitee shall obtain a recovery of
all or any part of any amount which the Lessee shall have paid to such
Indemnitee or for which the Lessee shall have reimbursed such Indemnitee under
this Article 9, and provided there shall not have occurred a Payment Default
or an Event of Default (in which case payment shall not be made to the Lessee
until such Payment Default or Event of Default shall have been cured) such
Indemnitee shall pay to the Lessee the amount of any such recovery, including
interest received with respect to the recovery, net of any Taxes paid or
payable as a result of the receipt of the recovery and interest, plus any net
additional permanent income tax benefits actually realized by Indemnitee as
the result of any payment made pursuant to this sentence less any reasonable
costs and expense of any Indemnitee not reimbursed by the Lessee; provided,
however, that such amount shall not be payable (a) before such time as the
Lessee shall have made all payments or indemnities then due and payable to
such Indemnitee under this Article 9 or (b) to the extent that the amount of
such payment would exceed the amount of all prior payments by the Lessee to
such Indemnitee pursuant to this Article 9, less the amount of all prior
payments by such Indemnitee to the Lessee pursuant to this Article 9. Any
subsequent loss of such recovery or tax benefit shall be subject to
indemnification under Article 8 or this Article 9, as the case may be, but
without regard to Section 8.01(b) hereof, other than Section 8.01(b)(v)
hereof.
Section 9.06. Defense of Claims. The Lessee or its insurers shall
have the right (in each such case at the Lessee's sole expense) to investigate
or, provided that (i) the Lessee or its insurers shall not reserve the right
to dispute liability with respect to any insurance policies pursuant to which
coverage is sought, (ii) in the case of the Lessee, no Payment Default or
Event of Default shall have occurred and be continuing or shall arise at any
time during the claim and (iii) the Lessee shall have first acknowledged in
writing to such Indemnitee the Lessee's obligation to indemnify such
Indemnitee hereunder in respect of such claim, defend any such claim
covered by insurance for which indemnification is sought pursuant to this
Article 9 and each Indemnitee shall cooperate with the Lessee or its
insurers with respect thereto, and provided, further, the Lessee shall not
be entitled to assume and control the defense of any such claim if and to
the extent (A) such Indemnitee reasonably objects to such control on the
ground that an actual or potential material conflict of interest exists
where it is advisable for such Indemnitee to be represented by separate
counsel or on the grounds that such proceeding involves the potential
imposition of criminal liability on such Indemnitee or (B) such proceeding
will involve any material danger of the sale, forfeiture or loss of, or the
creation of any Lien on the Aircraft or the Trust Estate (unless the Lessee
posts a bond or other security reasonably acceptable in form and substance
to such Indemnitee) or involve any material risk of civil liability to such
Indemnitee for which it is not indemnified hereunder. Subject to the
immediately foregoing sentence, where the Lessee or the insurers under a
policy of insurance maintained by the Lessee undertake the defense of an
Indemnitee with respect to such a claim, no additional legal fees or
expenses of such Indemnitee in connection with the defense of such claim
shall be indemnified hereunder unless the fees or expenses were incurred at
the written request of the Lessee or such insurers. Subject to the
requirement of any policy of insurance applicable to a claim, an Indemnitee
may participate at its own expense at any judicial proceeding controlled by
the Lessee or its insurers pursuant to the preceding provisions, to the
extent that such party's participation does not, in the opinion of the
independent counsel appointed by the Lessee or its insurers to conduct such
proceedings, interfere with such control; and such participation shall not
constitute a waiver of the indemnification provided in this Section 9.06.
No Indemnitee shall enter into any settlement or other compromise with
respect to any claim described in this Section 9.06 without the prior
written consent of the Lessee, which consent shall not unreasonably be
withheld or delayed, unless such Indemnitee waives its right to be
indemnified under this Article 9 with respect to such claim. The Lessee
shall not enter into any settlement or compromise which the Lessee has not
agreed to discharge or with respect to which the Lessee has not agreed to
indemnify such Indemnitee to such Indemnitee's satisfaction or which admits
any criminal violation, gross negligence or willful misconduct on the part
of any Indemnitee without the prior written consent of such Indemnitee.
Section 9.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 9 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of this Agreement, the Tax Indemnity
Agreement, the Trust Agreement, the Indenture, the Purchase Agreement
Assignment, the Engine Warranty Assignment, the Lease and the other Operative
Agreements but, as to such indemnities after the expiration or other
termination of the Lease, only with respect to losses, liabilities,
obligations, damages, penalties, claims, actions, suits, costs, Expenses and
disbursements caused by events occurring or existing (or fairly attributable
to the Lessee's acts or omissions) prior to such termination or expiration or
incurred in the process of (i) the return or disposition of the Aircraft under
Article 12 or Article 17 of the Lease, or (ii) the termination of the Lease or
the Indenture or, if later, the return of the Aircraft.
Section 9.08. Effect of Other Indemnities. The Lessee's obligations
under the indemnities provided for in this Agreement shall be those of a
primary obligor whether or not the Person indemnified shall also be
indemnified with respect to the same matter under the terms of this Agreement,
the Lease, the Indenture, the Trust Agreement, or any other document or
instrument, and the Person seeking indemnification from the Lessee pursuant to
any provision of this Agreement may proceed directly against the Lessee
without first seeking to enforce any other right of indemnification.
Section 9.09. Interest. The Lessee will pay to each Indemnitee on
demand, to the extent permitted by applicable law, interest on any amount of
indemnity not paid when due pursuant to this Article 9 until the same shall be
paid, at the Past Due Rate.
Section 9.10. Special Indemnity. Notwithstanding anything in this
Article 9 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs. (a) Transaction
Costs. The Owner Participant shall pay (or reimburse the Lessee if the Lessee
shall have previously made such payment) all fees and expenses of the
following persons relating to the public offering of the Pass Through
Certificates contemplated by the Underwriting Agreement and related to the
transactions contemplated hereby on the Certificate Closing Date and the
Delivery Date: (i) the fees and expenses of counsel for the Owner Participant;
(ii) the fees and expenses of the transaction documentation counsel for the
Lessee and counsel for the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee, each Liquidity Provider and the
Underwriters (other than those fees, expenses and disbursements payable by the
Underwriters pursuant to the Underwriting Agreement); (iii) the fees and
expenses of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇; (iv) any initial fees and expenses
of the Pass Through Trustee and each Liquidity Provider and the fees and
expenses of the Owner Trustee, the Subordination Agent and the Indenture
Trustee; (v) any compensation, commissions and discounts payable to the
Underwriters pursuant to the Underwriting Agreement; (vi) the fees, if any,
incurred in printing the Pass Through Certificates; (vii) the fees and
expenses incurred in connection with printing any amendment to the
Registration Statement on Form S-3 bearing Registration No. 333-07691,
printing any Preliminary Prospectus or Prospectus (as such terms are defined
in the Underwriting Agreement) for the offering of the Pass Through
Certificates; (viii) the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP; (ix) the
fees and expenses of ▇▇▇▇▇'▇ and S&P; (x) the fees and expenses (including
computer time-sharing charges) of First Chicago Leasing Corporation; (xi) the
reasonable out-of-pocket expenses of the Owner Participant, including, without
limitation, any amounts paid in connection with any appraisal report prepared
on behalf of the Owner Participant; (xii) reimbursement to the Owner
Participant, the Owner Participant Guarantor, the Owner Trustee, the Indenture
Trustee, the Subordination Agent, each Liquidity Provider and the Pass Through
Trustee for any and all fees, expenses and disbursements of the character
referred to above or otherwise incurred in connection with the negotiation,
preparation, execution and delivery, filing and recording of the Operative
Agreements and the documents contemplated thereby, including, without
limitation, travel expenses and disbursements which shall have been paid by
such party; (xiii) printing and duplicating expenses and all fees, taxes and
other charges payable in connection with the recording or filing on or
before the Delivery Date of the instruments described in this Agreement;
(xiv) initial fees, initial expenses, initial disbursements and the initial
costs of distributing the Certificates (but not the continuing fees,
expenses, disbursements and costs of distribution) of SSB, as lessor under
the Lease and as Owner Trustee under the Trust Agreement and with respect
to the administration of the Lease and the Lessor's Estate, of the
Indenture Trustee as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate and of the Subordination Agent
acting under the Intercreditor Agreement; and (xv) any other amounts
approved by the Lessee and the Owner Participant. The fees and expenses
described in clauses (ii) through (x) of this paragraph shall be allocable
to the Owner Participant under this Agreement (1) to the extent incurred
specifically with respect to the Owner Participant, and (2) to the extent
such fees and expenses are incurred but are not specifically attributable
to the Owner Participant, in the proportion that the principal amount of
the Certificates bears to the total amount of the Pass Through
Certificates.
The Owner Participant, the Owner Trustee and the Lessee acknowledge
that the percentages for Basic Rent, Stipulated Loss Value and Termination
Value set forth in the Lease have been prepared assuming the aggregate amount
payable by the Owner Participant pursuant to the preceding paragraph is 1.22%
of the Purchase Price (the "Estimated Expense Amount"). Transaction Costs
shall be paid in the manner provided in Section 3.04 hereof.
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of the entity
acting as Owner Trustee, as lessor under the Lease and as Owner Trustee under
the Trust Agreement with respect to the administration of the Lease and the
Lessor's Estate and the continuing fees, expenses and disbursements (including
reasonable counsel fees and expenses and initial fees relating to the
establishment of any replacement trustee) of the Indenture Trustee, as trustee
under the Indenture with respect to the administration of the Trust Indenture
Estate, the continuing fees, expenses and disbursements (including reasonable
counsel fees and initial fees relating to the establishment of a replacement
trustee) of the Pass Through Trustee and the Subordination Agent and the
continuing fees, expenses and disbursements (including reasonable counsel fees
and initial fees relating to the establishment of a replacement liquidity
provider) of the Liquidity Providers under each Liquidity Facility shall be
paid as Supplemental Rent by the Lessee, including without limitation any
amounts payable to the Indenture Trustee or on account of requests by the
Indenture Trustee for indemnification under Article XI of the Indenture.
(c) Amendments, Supplements and Appraisal. Without limitation of
the foregoing, the Lessee agrees:
(i) to pay as Supplemental Rent to the Owner Trustee, the Owner
Participant, Owner Participant Guaranty, the Indenture Trustee, the
Subordination Agent, the Liquidity Providers and the Pass Through Trustee
all costs and expenses (including reasonable legal fees and expenses)
incurred by any of them in connection with (a) any Default or Event of
Default and any enforcement or collection proceedings resulting therefrom,
or (b) the enforcement of the obligations of the Lessee hereunder or under
the other Operative Agreements, including, without limitation, the entering
into or giving or withholding of any amendments or supplements or waivers
or consents (whether or not consummated), including without limitation, any
amendment, supplement, waiver or consent resulting from any work-out,
restructuring or similar proceeding relating to the performance or
nonperformance by the Lessee of its obligations under the Operative
Agreements or (c) any amendment, supplement, waiver or consent (whether or
not entered into) under this Agreement, the Lease, the Indenture, the
Certificates, the Tax Indemnity Agreement, the Purchase Agreement
Assignment or any other Operative Agreement or document or instrument
delivered pursuant to any of them, which amendment, supplement, waiver or
consent is required by any provision of any Operative Agreement (including
any adjustment pursuant to Section 3.04 of the Lease) or is requested by
the Lessee or necessitated by the action or inaction of the Lessee;
provided, however, that the Lessee shall not be responsible for fees and
expenses incurred in connection with the offer, sale or other transfer
(whether pursuant to Section 7.03(d) hereof or otherwise) by the Owner
Participant after the Certificate Closing Date of any interest in the
Aircraft, the Lessor's Estate, the Beneficial Interest or the Trust
Agreement or any similar interest (and the Owner Participant shall be
responsible for all such fees and expenses), unless such offer, sale or
transfer shall occur (A) after the Lease has been declared in default or if
the transfer is pursuant to the exercise of remedies under Article 17 of
the Lease or (B) in connection with the termination of the Lease or action
or direction of the Lessee pursuant to Section 4.02, Article 10 or Article
11 of the Lease; and
(ii) to pay the fees, costs and expenses of all appraisers involved
in an independent appraisal of the Aircraft to the extent required under
Section 4.03 of the Lease.
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee. (a)
Resignation and Removal. The Owner Trustee or any successor Owner Trustee may
resign or may be removed by the Owner Participant, and a successor Owner
Trustee may be appointed and a Person may become Owner Trustee under the Trust
Agreement only in accordance with the provisions of Section 3.11 of the Trust
Agreement and the provisions of paragraphs (b) and (c) of this Section 11.01.
(b) Conditions to Appointment. The appointment in any manner of a
successor Owner Trustee pursuant to Section 3.11 of the Trust Agreement shall
be subject to the following conditions:
(i) Such successor Owner Trustee shall be a Citizen of the United
States;
(ii) Such successor Owner Trustee shall be a bank or a trust company
having combined capital, surplus and undivided profits of at least
$100,000,000 or a bank or trust company fully guaranteed by a direct or
indirect parent thereof having a combined capital, surplus and undivided
profits of at least $100,000,000;
(iii) Such appointment shall not violate any provisions of the
Transportation Code or any applicable rule or regulation of the applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered or create a relationship which would be in violation
of the Transportation Code or any applicable rule or regulation of the
applicable regulatory agency or body of any other jurisdiction in which the
Aircraft may then be registered;
(iv) Such successor Owner Trustee shall enter into an agreement
or agreements, in form and substance reasonably satisfactory to the
Lessee, the Owner Participant, the Pass Through Trustee and the
Indenture Trustee whereby such successor Owner Trustee confirms that it
shall be deemed a party to this Agreement, the Trust Agreement, the
Lease, the Lease Supplement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, the Indenture, the Indenture Supplement and
any other Operative Agreement to which the Owner Trustee is a party and
agrees to be bound by all the terms of such documents applicable to the
Owner Trustee and makes the representations and warranties contained in
Section 7.04 hereof (except that it may be duly incorporated, validly
existing and in good standing under the laws of the United States of
America or any State thereof); and
(v) All filings of Uniform Commercial Code financing and continuation
statements, filings in accordance with the Transportation Code and
amendments thereto shall be made and all further actions taken in
connection with such appointment as may be necessary in connection with
maintaining the validity, perfection and priority of the Lien of the
Indenture and the valid and continued registration of the Aircraft in
accordance with the Transportation Code.
(c) Appointment. For so long as the Aircraft remains registered
under the Transportation Code, the Owner Participant agrees to appoint
promptly a successor Owner Trustee meeting the requirements of Section
11.01(b) hereof in the event the Owner Participant has knowledge that the
Owner Trustee at any time shall not be a Citizen of the United States.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant. The Owner
Participant shall have no obligation or duty to the Lessee or to any Holder
with respect to the transactions contemplated by this Agreement, except those
obligations or duties expressly set forth in this Agreement, the Indenture,
the Trust Agreement, the Tax Indemnity Agreement, AVSA's FAA ▇▇▇▇ of Sale,
AVSA's Warranty ▇▇▇▇ of Sale, the Lease or any other Operative Agreement to
which the Owner Participant is a party and the Owner Participant shall not be
liable for the performance by any party hereto of such other party's
obligations or duties hereunder. Under no circumstances shall the Owner
Participant as such be liable to the Lessee, nor shall the Owner
Participant be liable to any Holder, for any action or inaction on the part
of the Owner Trustee or the Indenture Trustee in connection with this
Agreement, the Indenture, the Lease, the Trust Agreement, the Purchase
Agreement Assignment, the Engine Warranty Assignment, any other Operative
Agreement, the ownership of the Aircraft, the administration of the
Lessor's Estate or the Trust Indenture Estate or otherwise, whether or not
such action or inaction is caused by the willful misconduct or gross
negligence of the Owner Trustee or the Indenture Trustee.
Section 12.02. Interest of Holders of Certificates. A Holder of a
Certificate shall have no further interest in, or other right with respect to,
the Trust Indenture Estate when and if the principal and interest on all
Certificates held by such Holder and all other sums payable to such Holder
under this Agreement, under the Indenture and under such Certificates shall
have been paid in full.
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents. The Lessee
hereby consents in all respects to the execution and delivery of the
Indenture, the Intercreditor Agreement and the Liquidity Facilities and to all
of the terms of said documents, and the Lessee acknowledges receipt of an
executed counterpart of such documents; it being agreed that such consent
shall not be construed to require the Lessee's consent to any future
supplement to, or amendment, waiver or modification of the terms of the
Indenture, the Intercreditor Agreement or the Liquidity Facilities or the
Certificates, except that prior to the occurrence and continuance of an Event
of Default, no section of the Indenture, the Trust Agreement, the
Intercreditor Agreement or the Liquidity Facilities shall be amended or
modified in any manner materially adverse to the Lessee without its consent.
Section 13.02. Further Assurances. The Lessee hereby confirms to
the Owner Participant its covenants set forth in and obligations under the
Lease. The Lessee agrees that, except as otherwise provided in the
Indenture, the Owner Trustee may not enter into any amendment, modification
or supplement of, or give any waiver or consent with respect to, or approve
any matter or document as being satisfactory under the Lease without the
prior consent of the Indenture Trustee and the Owner Participant and that,
except as otherwise provided in the Indenture, upon an Indenture Event of
Default, the Indenture Trustee may act as the Lessor under the Lease to the
exclusion of the Owner Trustee. The Lessee further agrees to deliver to
the Indenture Trustee and the Owner Participant a copy of each notice,
statement, request, report or other communication given or required to be
given to the Owner Trustee under the Lease.
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment. The Pass Through Trustee and the Subordination Agent hereby
acknowledge and agree to be bound by all of the terms and conditions of the
Indenture, including without limitation, Section 8.01 thereof regarding the
rights of the Owner Participant to purchase the Certificates under
circumstances specified therein.
ARTICLE 14
NOTICES
Section 14.01. Notices. All notices, demands, declarations and
other communications required by this Agreement shall be in writing and
shall be deemed received (a) if given by telecopier, when transmitted and
the appropriate telephonic confirmation received if transmitted on a
Business Day and during normal business hours of the recipient, and
otherwise on the next Business Day following transmission, (b) if given by
certified mail, return receipt requested, postage prepaid five Business
Days after being deposited in the United States mail and (c) if given by
FedEx service (or, if a Default or Event of Default shall have occurred and
be continuing, by other comparable courier service), when received or
personally delivered, addressed:
(a) If to the Lessee, to its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President and Treasurer with a
copy to Senior Vice President and General Counsel at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, facsimile
(▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessee shall from time to
time designate in writing to the Lessor, the Indenture Trustee and the
Owner Participant;
(b) If to the Lessor or the Owner Trustee, to it ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (617)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessor
shall from time to time designate in writing to the Lessee and the
Indenture Trustee, with a copy to the Owner Participant;
(c) If to the Owner Participant, to its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President Leasing with
a copy to Director, Portfolio Administration, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
facsimile ▇▇▇ ▇▇▇-▇▇▇▇, or to such other address as the Owner Participant
may from time to time designate in writing to the Lessee and the Indenture
Trustee;
(d) If to the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee, to its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (801)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the
Indenture Trustee or the Pass Through Trustee, as the case may be, shall
from time to time designate in writing to the Lessor, the Lessee and the
Owner Participant; and
(e) If to a Liquidity Provider, to its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Manager, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as a
Liquidity Provider shall from time to time designate in writing to the
Lessor, the Lessee and the Indenture Trustee.
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing. (a) Subject to the terms and
conditions of this Section 15.01, the Lessee may request the Owner Participant
to participate in up to two refinancings in whole but not in part, of the
Certificates prior to the end of the Basic Term (a "Refinancing"). Such
Refinancings may be placed in either the private or public markets and shall
be denominated in United States dollars (or in any other foreign currency so
long as the Owner Participant is satisfied there is no foreign currency risk
to it), and shall be on terms that do not materially adversely affect the
Owner Participant. The Owner Participant agrees to negotiate promptly in good
faith to conclude an agreement with the Lessee as to the terms of any such
Refinancing transaction (including the terms of any debt to be issued in
connection with such refinancing and the documentation to be executed in
connection therewith). Without the prior written consent of the Owner
Participant, the prospectus and other offering materials relating to any
Refinancing in the form of a public offering shall not identify the Owner
Participant and shall not include any financial statements of the Owner
Participant or any Affiliate thereof. In connection with any such Refinancing
in the form of a public offering, the Lessee shall indemnify the Owner
Participant in a manner satisfactory to it for any liabilities under federal,
state or foreign securities laws resulting from such offering. The aggregate
principal amount of the new Certificates issued in connection with each
Refinancing shall be the same as the aggregate principal amount outstanding on
the Certificates being refinanced.
(b) Notwithstanding anything herein to the contrary, no Refinancing
will be permitted unless the Owner Participant and the Indenture Trustee shall
have received at least 15 days' prior written notice of the scheduled closing
date of such Refinancing and the Owner Participant shall have been provided
such longer period as it shall have required for a reasonable opportunity to
review the relevant documentation and the Owner Participant shall have
determined in good faith that neither it nor the Owner Trustee shall suffer
any loss or expense or bear any increased risk as a result of such Refinancing
(including, without limitation, any risk with respect to taxes or other
adverse consequences to the Owner Participant including the application of
Revenue Procedures 75-21 and 75-28 and Section 467 of the Code) for which it
has not been or will not have been indemnified by the Lessee in a manner
reasonably satisfactory to the Owner Participant, nor shall its rights against
all other parties taken as a whole be adversely affected compared to such
rights in effect under the Operative Agreements prior to such proposed
Refinancing.
Prior to the consummation of any Refinancing pursuant to this Section
15.01, the Owner Participant and the Lessee shall agree upon a schedule
setting forth each installment of Basic Rent and setting forth Stipulated Loss
Values and Termination Values payable pursuant to the Lease as a result of the
Refinancing in accordance with Section 3.04 of the Lease, and thereafter the
amounts set forth in such schedule shall become the amounts payable under the
Lease. Upon the consummation of the Refinancing, the evidence of indebtedness
issued pursuant to the Refinancing shall be considered "Certificates" for
purposes of this Agreement, the Lease and the Indenture.
(c) Notwithstanding the foregoing, the Owner Participant shall have
no obligation to proceed with any Refinancing transaction as contemplated by
this Section 15.01 unless the Lessee indemnifies the Owner Trustee and the
Owner Participant by agreement in form and substance satisfactory to each of
them, for any liability, obligation (other than the obligation to pay
principal and interest in respect of the refinanced indebtedness), cost or
expense (including, without limitation, reasonable attorneys' fees and
Make-Whole Premium or other amounts due under the Indenture), including any
adverse tax consequences or impact, related to or arising out of any such
Refinancing transaction.
(d) Without the prior written consent of the Owner Participant,
which consent may be withheld in its sole discretion, no such refinancing
shall (1) cause the aggregate principal amount of the indebtedness to be
substituted for the Certificates to exceed the aggregate principal amount
of the then outstanding Certificates, (2) cause the weighted average life
of such indebtedness to be different by more than 6 months than the
remaining weighted average life of the then outstanding Certificates, or
(3) cause the date of maturity of such indebtedness to be later than the
date of maturity of the Certificates being refinanced.
(e) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the
Certificates then outstanding; provided, however, that such Refinancing shall
be subject to the satisfaction of each of the following conditions:
(i) Payment of principal, accrued interest, Make-Whole Premium
and breakage costs, if any, and all other sums due and owing on the
Certificates payable under the Indenture;
(ii) Payment in full of all other amounts then due and owing by the
Lessee under this Agreement, the Indenture, the Lease, the Trust Agreement,
and the Certificates then outstanding shall have been made by the Lessee;
(iii) Such party shall have received such opinions of counsel
(including, without limitation, an opinion received by the Owner
Participant from independent tax counsel reasonably satisfactory to the
Lessee that such Refinancing shall not result in any adverse tax
consequences to such Owner Participant, unless the Lessee shall have agreed
to provide an indemnity in respect thereof reasonably satisfactory in form
and substance to the Owner Participant), certificates and other documents
as it may reasonably request, each in form and substance reasonably
satisfactory to such party;
(iv) All authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) The Lessee shall have provided or agreed to provide to the
Owner Participant, as Supplemental Rent under the Lease, sufficient
funds to pay any breakage costs, Make-Whole Premium and any other
amounts due under the Indenture;
(vi) The satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 15.01 to such
party's obligations under this Section 15.01;
(vii) No Payment Default, Bankruptcy Default or Event of Default
shall have occurred and be continuing or would occur immediately after
giving effect to such Refinancing;
(viii) In the event the Lessee shall not prohibit the purchase of
the Refinancing loan certificates by, or with the assets of, an employee
benefit plan, as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA or a plan or individual retirement account, which is
subject to Section 4975(c) of the Code, (individually or collectively, an
"ERISA Plan"), the Lessee will permit the placement of the Refinancing loan
certificates with an ERISA Plan only if either (A) if such placement is in
the form of pass through certificates, the sole underwriter or the manager
or co-manager of the underwriting syndicate or the selling or placement
agent of the Refinancing loan certificates represents to the Lessee that it
has a prohibited transaction exemption from the U.S. Department of Labor
with respect to pass through certificates (such as Prohibited Transaction
Exemption 89-88 or any other comparable exemption) or (B) purchasers of the
Refinancing loan certificates provide a representation (which may be in the
form of a deemed representation) regarding their source of funds used in
acquiring the Refinancing loan certificates and, if such purchasers
represent that they are using funds of an ERISA Plan in acquiring the
Refinancing loan certificates, such purchasers further represent that (1)
either they are relying on a prohibited transaction exemption from the U.S.
Department of Labor with respect to their purchase and holding of the
Refinancing loan certificates and they provide representations regarding
the satisfaction of the relevant conditions of such an exemption or (2)
their purchase and holding of the Refinancing loan certificates will not
constitute a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code. The reliance on any such exemption
will not be conditional on the Owner Participant's representation
concerning its party in interest or other status with respect to ERISA
Plans. If neither exemption referred to in clause (A) or (B) of this
paragraph (viii) is valid or applicable in any respect to the purchase
and holding of the Refinancing loan certificates, or if the
representation in clause (B) of this paragraph (viii) that such purchase
and holding will not constitute a non-exempt prohibited transaction is
not correct, whichever is applicable, then the Lessee shall indemnify
the Owner Participant pursuant to, and to the extent provided for, under
Sections 8 and 9 hereof for Taxes and Expenses resulting from any
"prohibited transaction", within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code, occurring with respect to the placement
of the Refinancing loan certificates with, or the holding of the
Refinancing loan certificates by, any ERISA Plan with respect to which
the Owner Participant is a party in interest, within the meaning of
Section 3(14) of ERISA, or a disqualified person, within the meaning of
Section 4975 of the Code, provided, however, that if the Lessee shall
fail to obtain either of the representations set forth in clause (A) or
(B) of this paragraph (viii), such indemnity shall not be subject to the
exceptions set forth under Sections 8.01(b)(xii)(A) and (B) and
9.01(b)(ix)(A) and (B) hereof; and
(ix) The Lessee shall pay all costs and expenses (including legal
fees) incurred in connection with any proposed or actually consummated
Refinancing.
Section 15.02. Reoptimization. (a) If a Change in Tax Rate occurs
prior to the end of the Basic Term, then, subject to the terms and conditions
of this Section 15.02 and Section 3.04 of the Lease, the Owner Participant
may, upon 30 days' prior notice to the Lessee, the Indenture Trustee, the
Owner Trustee and the Holders, elect to modify the schedule of payments of
principal of the certificates issued ("Refinancing Certificates") in
connection with any Refinancing using private debt (not including debt issued
pursuant to an exemption from registration under the Securities Act relying on
Rule 144A promulgated thereunder but otherwise marketed in a manner
substantially similar to securities registered under the Securities Act, and
not including debt issued in connection with any offering of securities
registered under the Securities Act) due on each remaining Rent Payment Date
on or commencing on the Rent Payment Date next succeeding the date mutually
agreed to by the Owner Participant, the Lessee and the Indenture Trustee on
which the Owner Participant shall make such modification (the "Reoptimization
Date"). Promptly after making such modification, the Owner Participant shall
furnish each party hereto written notice of the amounts so recalculated.
(b) Adjustments to Refinancing Certificates. On the Reoptimization
Date, subject to the satisfaction on or before the Reoptimization Date of the
conditions set forth in Section 15.02(c), the Owner Trustee will issue and
deliver and the Indenture Trustee will authenticate, and each holder of a
Refinancing Certificate will accept delivery of, a new Refinancing Certificate
or Refinancing Certificates (in replacement of each Refinancing Certificate
then held by such holder, which Refinancing Certificates shall be surrendered
to the Indenture Trustee for cancellation) containing such changed principal
installments (expressed as a percentage of the original principal amount of
such Refinancing Certificate) as shall have been recalculated by the Owner
Participant, but in the same principal amount as, and containing terms
identical to, except as otherwise contemplated by Section 15.02(d) hereof, the
Refinancing Certificates originally issued in connection with the Operative
Agreements.
(c) Conditions to the Obligations of the Holders of the Refinancing
Certificates on the Reoptimization Date. The obligation of each holder of a
Refinancing Certificate to accept delivery of a new Refinancing Certificate on
the Reoptimization Date, and to surrender on such Reoptimization Date any
Refinancing Certificate then held by it, is subject to the following
conditions precedent having been satisfied on or before the Reoptimization
Date:
(i) the requirements of Section 15.02(d) hereof shall have been
satisfied;
(ii) the following documents, in form and substance satisfactory to
such Holder, shall have been duly authorized, executed and delivered by the
party or parties thereto and shall be in full force and effect: (A) if the
payments of Basic Rent, Stipulated Loss Values and Termination Values with
respect to the Term have been changed, an amendment to the Lease, dated the
Reoptimization Date, (B) an amendment to the Indenture setting forth any
changed repayment schedule to the Refinancing Certificates, dated the
Reoptimization Date and duly filed (or in the process of being so duly
filed) for recordation with the Aeronautics Authority and (C) replacement
Refinancing Certificates; and
(iii) in connection with any Reoptimization the Owner Participant
shall pay or agree to pay all reasonable costs and expenses incurred by the
Lessee, the Owner Trustee, the Indenture Trustee and each Holder of a
Refinancing Certificate (including, without limitation, reasonable legal
fees and expenses) in connection with any such reoptimization.
(d) Payment Schedules. Except as otherwise provided in this
Section 15.02 as long as the Refinancing Certificates remain outstanding,
the payment schedules for the Refinancing Certificates shall not be
modified.
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes. It is hereby agreed
between the Owner Participant and the Lessee (but the Lessee makes no
representation to such effect) that it is the intent of the parties for
Federal, state, local and foreign income tax purposes that the Owner
Participant will be treated as the owner of the Aircraft and the Lessee will
be treated as the lessee of the Aircraft.
Section 17.02. Collateral Account. (a) The Indenture Trustee shall
notify the Owner Trustee and the Lessee of any losses incurred on the
Specified Investments in the Collateral Account promptly upon the realization
thereof, as well as any fees, commissions and other costs, Taxes (other than
income taxes) and expenses, if any, incurred by the Indenture Trustee in
connection with its administration of the Collateral Account (collectively,
"Losses"). Promptly upon receipt of such notification but, in any event, no
later than the earlier of the Delivery Date (or, if later, the last day of any
investment period referred to in Section 2.14(b) of the Indenture during which
the Delivery Date occurs) and the 15th day after the Cut-Off Date, the Lessee
shall pay to the Indenture Trustee, on behalf of the Owner Trustee, for
deposit into the Collateral Account, an amount equal to such Losses (net of
any investment earnings).
(b) The Lessee shall pay to the Indenture Trustee, on behalf of the
Owner Trustee (A) on each Payment Date prior to the Delivery Date an amount
equal to the aggregate amount of interest accrued on the Certificates from
(and including) the Certificate Closing Date or previous Payment Date, as the
case may be, to, but excluding, such Payment Date and (B) on the first Payment
Date subsequent to the Delivery Date, interest accrued on the Certificates
from and including the last Payment Date (or, if none, the Certificate Closing
Date), to, but excluding, the Delivery Date. In addition, the Lessee will pay
to the Indenture Trustee on behalf of the Owner Trustee all amounts owed by
the Owner Trustee pursuant to clause (b) of the last paragraph of Section 2.04
of the Indenture.
(c) If the Aircraft has not been purchased by the Owner Trustee
on the Delivery Date, the Lessee agrees to pay to the Indenture Trustee, on
behalf of the Owner Trustee, on the 15th day following the Cut-Off Date the
excess, if any, of the amounts payable under Section 6.02(b)(1) of the
Indenture over the amounts released from the Collateral Account under
Section 2.16 of the Indenture.
(d) All amounts payable by the Lessee pursuant to this Section 17.02
shall be paid to the Indenture Trustee at its principal office at ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust
Department, or as the Indenture Trustee may otherwise direct within the United
States, by wire transfer of immediately available funds in U.S. Dollars no
later than 10:30 a.m., New York City time, on the due date of such payment.
Section 17.03. Counterparts. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section 17.04. No Oral Modifications. Neither this Agreement nor
any of its terms may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification is sought. No such written termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy shall have been
delivered to and executed by the Owner Trustee and the Indenture Trustee. A
copy of each such termination, amendment, supplement, waiver or modification
shall also be delivered to each other party to this Agreement.
The consent of each of the Pass Through Trustee and the Subordination
Agent, in its capacity as a party to this Agreement and not as a Holder, shall
not be required to modify, amend or supplement this Agreement or to give any
consent, waiver, authorization or approval with respect to this Agreement
under the circumstances in which the consent of the Indenture Trustee would
not be required for such modification, amendment, supplement, consent, waiver
or approval in accordance with Section 8.01(b) of the Indenture, provided that
the Pass Through Trustee shall be entitled to receive an Opinion of Counsel
(as defined in the Pass Through Agreement) necessary, in its sole discretion,
to establish that the Indenture Trustee's consent would not be required under
such circumstances.
Section 17.05. Captions. The table of contents preceding this
Agreement and the headings of the various Articles and Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions of this Agreement.
Section 17.06. Successors and Assigns. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the Lessee and its
successors and permitted assigns, the Subordination Agent and its successors
and permitted assigns, including without limitation each Holder of a
Certificate, the Owner Participant and its successors and permitted assigns,
the Owner Trustee and its successors as Owner Trustee (and any additional
owner trustee appointed) under the Trust Agreement, the Indenture Trustee and
its successors as Indenture Trustee (and any additional indenture trustee
appointed) under the Indenture and the Pass Through Trustee and its successors
as Pass Through Trustee (and any additional pass through trustee appointed).
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and
the Pass Through Trustee. Each of SSB and FSB is entering into this Agreement
solely in their respective capacities (except to the extent otherwise
expressly indicated), in the case of SSB, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, in the case of FSB, not in
its individual capacity but solely as Indenture Trustee under the Indenture
and as Pass Through Trustee under the Pass Through Agreement, and except as
otherwise expressly provided in this Agreement or in the Lease, the Indenture,
the Pass Through Agreement or the Trust Agreement, neither SSB, nor FSB,
shall be personally liable for or on account of its statements,
representations, warranties, covenants or obligations under this Agreement;
provided, however, that each of SSB and FSB accepts the benefits running to it
under this Agreement, and each agrees that (except as otherwise expressly
provided in this Agreement or any other Operative Agreement to which it is a
party) it shall be liable in its individual capacity for (a) its own gross
negligence or willful misconduct (whether in its capacity as trustee or in its
individual capacity), (b) any breach of representations and warranties or any
breach of covenants made in its individual capacity pursuant to or in
connection with this Agreement or the other Operative Agreements to which
it is a party, (c) any breach, in the case of the Owner Trustee, of its
covenants contained in Sections 3.05 and 3.08 of the Indenture, (d) the
failure to use ordinary care in receiving, handling and disbursing funds,
(e) in the case of the Owner Trustee, Lessor's Liens attributable to it in
its individual capacity, (f) in the case of the Indenture Trustee,
Indenture Trustee's Liens and (g) taxes, fees or other charges on, or based
on, or measured by, any fees, commissions or compensation received by it in
connection with the transactions contemplated by the Operative Agreements.
Section 17.08. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17.09. Public Release of Information. Subject to applicable
legal requirements (including, without limitation, securities laws
requirements, other regulatory requirements and other legally compelled
disclosures), so long as there shall not have occurred an Event of Default or
Indenture Event of Default, each party to this Agreement shall in each
instance obtain the prior written approval of each other party to this
Agreement concerning the exact text and timing of news releases, articles and
other information releases to the public media concerning any Operative
Agreements.
Section 17.10. Certain Limitations on Reorganization. The Indenture
Trustee and the Pass Through Trustee agree that, if (i) the Owner Trustee
becomes or all or any part of the Lessor's Estate or the trust created by the
Trust Agreement becomes the property of, a debtor subject to the
reorganization provisions of the Bankruptcy Code or any other applicable
bankruptcy or insolvency statutes, (ii) pursuant to any such reorganization
provisions, the Owner Participant is held to have recourse liability to the
debtor, the Owner Trustee or the trustee of the debtor directly or indirectly
on account of any amount payable as Make-Whole Premium, principal or interest
on the Certificates, or any other amount payable on any Certificate that is
provided in the Operative Agreements to be nonrecourse to the Owner
Participant and (iii) the Indenture Trustee actually receives any Recourse
Amount which reflects any payment by the Owner Participant on account of (ii)
above, then the Indenture Trustee, as the case may be, shall promptly refund
to the Owner Participant such Recourse Amount. For purposes of this Section
17.10, "Recourse Amount" means the amount by which the portion of such payment
by the Owner Participant on account of clause (ii) above received by the
Indenture Trustee exceeds the amount which would have been received by the
Indenture Trustee if the Owner Participant had not become subject to the
recourse liability referred to in (ii) above. Nothing contained in this
Section shall prevent the Indenture Trustee from enforcing any individual
obligation (and retaining the proceeds thereof) of the Owner Participant under
this Agreement or any other Operative Agreement to the extent herein or
therein provided, for which the Owner Participant has expressly agreed by the
terms of this Agreement to accept individual responsibility.
Section 17.11. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS AND IS BEING DELIVERED IN NEW
YORK.
Section 17.12. Section 1110 Compliance. The parties hereto agree
that the transactions contemplated by the Operative Agreements are expressly
intended to be, shall be and should be construed so as to be entitled to the
benefits and protection of Section 1110 of the Bankruptcy Code.
Section 17.13. Reliance of Liquidity Providers. Each of the parties
hereto agrees and acknowledges that each Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that each Liquidity Provider may rely on such representations
and warranties to the same extent as if such representations and warranties
were made to such Liquidity Provider directly. The terms of this Agreement
shall inure to the benefit of each Liquidity Provider, their respective
successors and permitted assigns.
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality. Each party hereto agrees (on behalf
of itself and each of its Affiliates, agents, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature, any non-public information supplied to it pursuant to this
Agreement which is identified by the Person supplying the same as being
confidential at the time the same is delivered to such party, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any of the parties hereto, (iii) to bank examiners or similar
regulatory authorities, auditors or accountants, (iv) in connection with any
litigation to which any one or more of the parties hereto is a party relating
to the transactions contemplated hereby or by any of the Operative Agreements,
(v) to an Affiliate of the parties hereto, (vi) to any assignee or participant
(or prospective assignee or participant) or other transferee so long as such
assignee or participant (or prospective assignee or participant) or other
transferee first executes and delivers to the respective party making such
assignment or participation an agreement in writing to be bound by the
provisions of this Section 18.01 or (vii) in the case of the Owner Participant
or the Owner Trustee (in its individual or trust capacity) to the Owner
Trustee (in its individual or trust capacity) or to the Owner Participant, as
the case may be.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers and
this Participation Agreement shall be effective this 22nd day of May, 1997.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Treasurer and Managing
Director - Structured Finance
OWNER PARTICIPANT:
PMCC LEASING CORPORATION
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager, Structured Finance
OWNER TRUSTEE:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise expressly provided herein,
but solely as Owner Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
INDENTURE TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Indenture Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PASS THROUGH TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Pass Through Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SUBORDINATION AGENT:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Subordination Agent
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
CERTIFICATE INFORMATION
1. Federal Express Corporation 1997-1 Pass Through Trust Class A
Federal Express Corporation Trust No. N670FE
Interest Rate: 7.50%
Maturity: January 15, 2017
Principal Amount: $33,352,000
2. Federal Express Corporation 1997-1 Pass Through Trust Class B
Federal Express Corporation Trust No. N670FE
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,507,000
3. Federal Express Corporation 1997-1 Pass Through Trust Class C
Federal Express Corporation Trust No. N670FE
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,533,000
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N670FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any Person, governmental department, bureau, commission or agency
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be received by a
Person shall be supplemented by a further payment to such Person so that the
sum of the two payments, after deduction of all Taxes resulting from the
receipt or accrual of such payments, shall be equal to the payment to be
received. In the case of amounts payable to the Lessor, the Owner Participant,
or any corporate Affiliate of the Owner Participant, it shall be presumed that
such Person is at all times subject to Federal income tax at the maximum
marginal rate generally applicable to corporations from time to time and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty ▇▇▇▇ of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a Replacement Engine) whether or not
any of such initial or Replacement Engines may from time to time be installed
on such Airframe or may be installed on any other airframe or on any other
aircraft, including any aircraft substituted pursuant to Section 11.03 of the
Lease. Prior to delivery of the initial Lease Supplement, references in the
Operative Agreements (including Section 3.05 of the Participation Agreement)
to Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N670FE and Manufacturer's serial number 777, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N670FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N670FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA ▇▇▇▇ of Sale. The ▇▇▇▇ of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty ▇▇▇▇ of Sale. The full warranty ▇▇▇▇ of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on September 2, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N670FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Law. Any change to the Code or the Treasury regulations
promulgated thereunder or the publication of any revenue ruling, revenue
procedure or any informational release by the Internal Revenue Service or the
Department of Treasury either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
of such change in writing prior to the Delivery Date.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. September 1, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N670FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N670FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N670FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof resulting from (i) claims against the Indenture Trustee not related to
the administration of the Trust Indenture Estate or any transactions pursuant
to the Indenture or any document included in the Trust Indenture Estate, (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the Lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N670FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N670FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA ▇▇▇▇
of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, any warranty with respect to
the Airframe and the Engines, all amounts of Basic Rent and Supplemental Rent,
including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. ▇▇▇▇▇'▇ Investors Service, Inc.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Basic Term
utilizing the multiple investment sinking fund method of analysis, computed on
the basis of the same methodology and assumptions as were utilized by the
Owner Participant in determining Basic Rent, Stipulated Loss Value and
Termination Value percentages, as the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N670FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N671FE, N672FE,
N673FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. September 2, 2020 and each January 15 and July 15
commencing on July 15, 1997.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by S&P and ▇▇▇▇▇'▇,
respectively or, if such ratings are unavailable, rated by any nationally
recognized rating organization in the United States equal to the highest
rating assigned by such rating organization; (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) overnight repurchase agreements with respect to the securities described
in clause (a) above entered into with an office of a bank or trust company
which is located in the United States of America or any bank or trust company
which is organized under the laws of the United States or any state thereof
and has capital, surplus and undivided profits aggregating at least $500
million.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Basic Term, the amount determined by multiplying the Purchase
Price by the percentage set forth in Schedule III of the Lease under the
heading "Stipulated Loss Value Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N670FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. The Basic Term of the lease for the Aircraft under the Lease
and, if renewed pursuant to Section 4.01 of the Lease, each Renewal Term for
the Aircraft for which the Lease is renewed, or such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that is
on or after December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on January 15, 2016, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N670FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, First Chicago
Capital Markets, Inc., ▇▇▇▇▇▇▇, Sachs & Co. and ▇.▇. ▇▇▇▇▇▇ & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE III
PERMITTED COUNTRY LIST
Australia Luxembourg
Austria Netherlands
Belgium New Zealand
Canada Norway
Denmark Philippines
Finland Portugal
France Republic of China (Taiwan)
Germany Singapore
Greece Sweden
Iceland Switzerland
Ireland Thailand
Japan United Kingdom
SCHEDULE IV
DEBT PORTION
Debt Portion $62,392,000
------------
EXHIBIT A(1)(a)(i)
[Letterhead of Federal Express]
[Certificate Closing Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates will be
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision, (i)
executed counterparts of the Pass Through Agreement, the Series Supplements
and the Operative Agreements to be delivered on the Certificate Closing
Date (the "Certificate Closing Date Documents") and (ii) the forms of the
Operative Agreements to be delivered on the Delivery Date. We have relied
upon originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, documents and other instruments as
in our judgment are relevant to rendering the opinions expressed below. As
to any facts material to the opinions expressed below (other than any
thereof relating to Federal), we have relied upon the representations and
warranties made in the Certificate Closing Date Documents, the accuracy of
which we have not independently investigated or verified. In such
examination, we have assumed the genuineness of all signatures (other than
the signatures of Federal) and the authenticity of all documents submitted
to us as originals and the conformity with the originals of all documents
submitted to us as copies. We have also assumed that each of the parties
to each of the Certificate Closing Date Documents, other than Federal, has
full power, authority and legal right to enter into such Certificate
Closing Date Documents and that each such Certificate Closing Date Document
has been duly authorized, executed and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Certificate Closing Date Documents to which it is a party. Federal is duly
qualified to do business and is in good standing in the State of Tennessee
and each other state of the United States in which its operations or the
nature of its business requires Federal to so qualify, except where the
failure to so qualify would not have a material adverse impact on Federal
or its business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Certificate Closing Date Documents to which
Federal is a party has or had, on the date of execution thereof, been duly
authorized, executed and delivered by Federal and each constitutes the
legal, valid and binding obligation of Federal enforceable against Federal
in accordance with its terms. Each of the Certificate Closing Date
Documents to which Federal is to be a party and which are to be executed on
the Delivery Date has been duly authorized by Federal.
4. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which Federal is a party, nor the
consummation of any of the transactions by Federal contemplated thereby,
nor the performance of the obligations thereunder by Federal, did at the
time of execution and delivery, or does presently (a) require any
stockholder approval or violate the certificate of incorporation or by-laws
of Federal or (b) conflict with or contravene the provisions of, or
constitute a default under, or result in the creation of any Lien (other
than Liens permitted under Section 6.01(a) of the Lease) upon the property
of Federal under any law, governmental rule or regulation, or the charter
or bylaws of Federal or any order, writ, injunction or decree of any court
or governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which it is a party, nor the
consummation of any transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did or does, as the
case may be, (a) require the consent or approval of, the giving of notice
to, or (except as described or contemplated in the Participation Agreement
and the Lease, all of which are required to be performed on or prior to the
Certificate Closing Date and which shall have been accomplished on or prior
to the Certificate Closing Date) the registration with, or the taking of
any other action in respect of, the Aeronautics Authority, the Securities
and Exchange Commission or any other authority or agency of the federal
government or of the State of Tennessee other than (i) the registration of
the issuance and sale of the Pass Through Certificates under the Securities
Act and (ii) compliance with the securities laws of each applicable state,
or (b) contravene any judgment or order applicable to or binding on Federal
or any law or governmental rule or regulation of the United States or of
the State of Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Certificate Closing Date Documents.
7. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
8. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
9. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Certificate Closing Date Documents to which Federal
is a party are based upon the assumption for purposes of such opinions and
without independent analysis that, notwithstanding the respective choice of
laws clauses in the Certificate Closing Date Documents, the governing law
with respect to each of the Certificate Closing Date Documents is identical
in all relevant respects to the law of the State of Tennessee. Insofar as
the foregoing opinion relates to the enforceability of any instrument, such
enforceability is subject to applicable bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally
(whether such enforceability is considered in a proceeding in equity or at
law). The enforceability of the remedies provided under the Lease may also
be limited by applicable laws which may affect the remedies provided
therein but which do not in my opinion affect the validity of the Lease or
make such remedies inadequate for the practical realization of the benefits
intended to be provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(a)(ii)
[Letterhead of Federal Express]
[Delivery Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.02(d)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates were
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that were issued under the Indenture, as supplemented
by the related Indenture and Security Agreement Supplement.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision,
executed counterparts of the Operative Agreements, the Pass Through
Agreement and each Series Supplement (the "Transaction Agreements"). We
have relied upon originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records, documents and other
instruments as in our judgment are relevant to rendering the opinions
expressed below. As to any facts material to the opinions expressed below
(other than any thereof relating to Federal), we have relied upon the
representations and warranties made in the Transaction Agreements, the
accuracy of which we have not independently investigated or verified. In
such examination, we have assumed the genuineness of all signatures (other
than the signatures of Federal) and the authenticity of all documents
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies. We have also assumed that each of the
parties to each of the Transaction Agreements, other than Federal, has full
power, authority and legal right to enter into such Transaction Agreements
and that each such Transaction Agreement has been duly authorized, executed
and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Transaction Agreements to which it is a party. Federal is duly qualified
to do business and is in good standing in the State of Tennessee and each
other state of the United States in which its operations or the nature of
its business requires Federal to so qualify, except where the failure to so
qualify would not have a material adverse impact on Federal or its
business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Transaction Agreements to which Federal is a
party has or had, on the date of execution thereof, been duly authorized,
executed and delivered by Federal and each constitutes the legal, valid and
binding obligation of Federal enforceable against Federal in accordance
with its terms.
4. Neither the execution and delivery by Federal of the
Transaction Agreements to which Federal is a party, nor the consummation of
any of the transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did at the time of
execution and delivery, or does presently (a) require any stockholder
approval or violate the certificate of incorporation or by-laws of Federal
or (b) conflict with or contravene the provisions of, or constitute a
default under, or result in the creation of any Lien (other than Liens
permitted under Section 6.01(a) of the Lease) upon the property of Federal
under any law, governmental rule or regulation, or the charter or bylaws of
Federal or any order, writ, injunction or decree of any court or
governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Transaction Agreements to which it is a party, nor the consummation of any
transactions by Federal contemplated thereby, nor the performance of the
obligations thereunder by Federal, did or does, as the case may be, (a)
require the consent or approval of, the giving of notice to, or (except as
described or contemplated in the Participation Agreement and the Lease, all
of which were or are required to be performed on or prior to the Delivery
Date and which were or shall have been accomplished on or prior to the
Delivery Date) the registration with, or the taking of any other action in
respect of, the Aeronautics Authority, the Securities and Exchange
Commission or any other authority or agency of the federal government or of
the State of Tennessee other than (i) the registration of the issuance and
sale of the Pass Through Certificates under the Securities Act, (ii)
compliance with the securities laws of each applicable state and (iii) the
filings and recordings referred to in paragraph 7 below, or (b) contravene
any judgment or order applicable to or binding on Federal or any law or
governmental rule or regulation of the United States or of the State of
Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) (i) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Transaction Agreements, or (ii) involves the
Aircraft.
7. Except for the registration in the Owner Trustee's name
of the Aircraft pursuant to the Transportation Code, and except for the
filing and, where appropriate, recording, pursuant to the Transportation
Code of (A) AVSA's FAA ▇▇▇▇ of Sale, (B) the Trust Agreement, (C) the
Lease (with the Lease Supplement covering the Aircraft, the Indenture and
the Indenture and Security Agreement Supplement covering the Aircraft
attached as exhibits) and (D) the Indenture (with the Indenture and
Security Agreement Supplement covering the Aircraft attached as an
exhibit), no further action, including any filing or recording of any
document is necessary or advisable in order to establish and perfect the
Owner Trustee's title to and interest in the Aircraft as against Federal
and any third parties, or to perfect the first mortgage lien on the
Aircraft in favor of the Indenture Trustee in each case with respect to
such portion of the Aircraft as is covered by the recording system
established by the Transportation Code.
8. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
9. On the date hereof the Owner Trustee received good and
valid title to the Aircraft free and clear of all Liens on file with the
FAA, except for Liens permitted under Section 6.01(a) of the Lease.
10. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
11. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Transaction Agreements to which Federal is a party
are based upon the assumption for purposes of such opinions and without
independent analysis that, notwithstanding the respective choice of laws
clauses in the Transaction Agreements, the governing law with respect to
each of the Transaction Agreements is identical in all relevant respects to
the law of the State of Tennessee. Insofar as the foregoing opinion
relates to the enforceability of any instrument, such enforceability is
subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally (whether such
enforceability is considered in a proceeding in equity or at law). The
enforceability of the remedies provided under the Lease may also be limited
by applicable laws which may affect the remedies provided therein but which
do not in my opinion affect the validity of the Lease or make such remedies
inadequate for the practical realization of the benefits intended to be
provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
As to the matters referred to in paragraphs 5, 7 and 9, I
have relied on the opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ of even date
herewith, to the extent such matters are addressed in such counsel's
opinion and subject to the assumptions and qualifications expressed
therein.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(i)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as Owner Trustee, and First Security Bank, National
Association, not in its individual capacity, except as otherwise stated, but
solely as Indenture Trustee, Pass Through Trustee and Subordination Agent,
relating to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(v) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of a portion of the Owner Trustee's payment
of the Purchase Price of one Airbus A300F4-605R Aircraft using the proceeds
from the public offering of the Pass Through Certificates. On the Certificate
Closing Date, three Classes of Pass Through Certificates will be issued by
separate Pass Through Trusts, each formed to acquire, among other securities,
the Certificates bearing a particular interest rate and having a particular
Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Certificate Closing Date Documents") and the forms of the Operative
Agreements to be delivered on the Delivery Date. We have also examined
originals, or copies certified to our satisfaction, of such other agreements,
documents, certificates and statements of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. Assuming (i) the due authorization, execution and
delivery of the Certificate Closing Date Documents by each of the parties
to each such document (other than Federal Express), (ii) each such party
has full power and legal right to enter into and perform its respective
obligations under the Certificate Closing Date Documents, (iii) that the
execution, delivery and performance of each of the Certificate Closing Date
Documents by each of the parties thereto will not violate the respective
parties' constituent documents, (iv) the due authorization, execution,
issuance and delivery by the Owner Trustee, and the due authentication by
the Indenture Trustee, of the Certificates to be issued under the Indenture
in accordance with the terms of the Indenture, (v) the due authorization,
execution, issuance, delivery and authentication by the Pass Through
Trustee of the Pass Through Certificates to be issued under the Pass
Through Agreement and the Series Supplement relating to such Pass Through
Certificates, in each case in accordance with the terms of the Pass Through
Agreement and such Series Supplement, and (vi) that the form of each
Certificate Closing Date Document is in compliance with all applicable laws
and governmental rules and regulations (other than the laws of the United
States and the State of New York), then: (A) to the extent governed by New
York law, each Certificate Closing Date Document in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create, except that no opinion is
given with respect to perfection of such security interest on the date
hereof; (C) the Certificates, when issued to and acquired by the Pass
Through Trustee, will be legal, valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee in accordance with their
terms and the terms of the Indenture and will be entitled to the benefits
of the Indenture, including the benefit of the security interest created
thereby, except that no opinion is given with respect to perfection of such
security interest on the date hereof; (D) the Pass Through Certificates,
when issued to and acquired by the Underwriters in accordance with the
Underwriting Agreement, will be legal, valid and binding obligations of the
Pass Through Trustee enforceable against the Pass Through Trustee in
accordance with their terms and will be entitled to the benefits of the
Pass Through Agreement and the Series Supplement relating thereto; and (E)
the beneficial interest of the Owner Participant under the Trust Agreement
in and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
2. (a) Each of the Certificate Closing Date Documents to
which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express. Each of the Operative Agreements to which
Federal Express is to be a party and which are to be delivered on the
Delivery Date has been authorized by Federal Express.
(b) The execution, delivery and performance by Federal
Express of each of the Certificate Closing Date Documents to which Federal
Express is a party do not, or did not on the date of execution thereof,
violate, and fully comply, or did fully comply on the date of execution
thereof, with, any laws and governmental rules and regulations of the State
of New York that may be applicable to Federal Express. The opinion set
forth in this paragraph 2(b) is rendered without regard to the taking of
any action or the conduct of any other business by Federal Express in the
State of New York other than the transactions contemplated by the
Certificate Closing Date Documents.
3. The execution, delivery and performance of the
Certificate Closing Date Documents (other than the Certificates) by the
Owner Trustee in its individual or trust capacity, as the case may be, and
the issuance, execution, delivery and performance of the Certificates by
the Owner Trustee in its trust capacity do not violate, and fully comply
with, any laws and governmental rules and regulations of the State of New
York that may be applicable to the Owner Trustee in its individual or trust
capacity, as the case may be. The opinion set forth in this paragraph 3 is
rendered without regard to the effect, if any, on such issuance (in the
case of the Certificates), execution, delivery or performance, of the
taking of any action, the conduct of any business or the exercise of any
other powers by State Street Bank and Trust Company of Connecticut,
National Association in its individual or trust capacity in the State of
New York not related to the transactions contemplated by the Certificate
Closing Date Documents. We have assumed that State Street Bank and Trust
Company of Connecticut, National Association has made the filings necessary
to comply with Section 131.3 of the Banking Law of the State of New York,
however we express no opinion as to whether State Street Bank and Trust
Company of Connecticut, National Association is required to comply with
said Section 131.3.
4. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinion of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Vice President - Law of Federal Express to be delivered to
you and dated the date hereof, for purposes of the matters covered
thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware.
(c) The opinion contained in paragraph 1(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(ii)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity but solely as Owner
Trustee, and First Security Bank, National Association, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent, relating to the Aircraft. This
opinion is being delivered pursuant to Section 4.02(d)(ii) of the
Participation Agreement. Capitalized terms not otherwise defined herein have
the meanings assigned thereto in the Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of the Owner Trustee's payment of a portion
of the Purchase Price of one Airbus A300F4-605R Aircraft (the "Aircraft") using
the proceeds from the public offering of the Pass Through Certificates. On the
Certificate Closing Date, three Classes of Pass Through Certificates were
issued by separate Pass Through Trusts, each formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having a
particular Maturity issued under the Indenture. The Aircraft is to be leased
to Federal Express by the Owner Trustee pursuant to the Lease and subjected to
the Lien of the Indenture, and is to be delivered by the Owner Trustee to the
Lessee on this date, and in connection with the delivery of the Aircraft, the
Owner Trustee and Federal Express will execute and deliver the Lease
Supplement, and the Owner Trustee will execute and deliver the Indenture and
Security Agreement Supplement.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Transaction Agreements"). We have also examined originals, or copies
certified to our satisfaction, of such other agreements, documents,
certificates and statements of governmental officials and corporate officers
as we have deemed necessary or advisable as a basis for such opinions. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. With respect to that portion, if any, of the Aircraft
and the other property included in the Lessor's Estate as may not be
covered by the recording system established by the FAA pursuant to Section
44107 of the Transportation Code, no filing or recording of any document or
other action was or is necessary in order to establish the Owner Trustee's
title thereto and interest therein as against Federal Express and any third
parties.
2. Subject to execution and delivery of the Lease
Supplement and the Indenture and Security Agreement Supplement for the
Aircraft and to the registration of the Aircraft with the FAA in the name
of the Owner Trustee, the Lease, as supplemented, will create a valid
leasehold interest in the Aircraft, the entitlement thereof to the benefits
of recordation under the Transportation Code being subject to the due and
timely filing and, where appropriate, recording of (A) AVSA's FAA ▇▇▇▇ of
Sale, (B) the Trust Agreement, (C) the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft attached as exhibits) and (D)
the Indenture (with the Indenture and Security Agreement Supplement
covering the Aircraft attached as an exhibit), pursuant to the
Transportation Code, and assuming that at the time of such filing no other
documents relating to the Aircraft have been filed pursuant to the
Transportation Code.
3. Assuming (i) the due authorization, execution and
delivery of the Transaction Agreements by each of the parties to each such
document (other than Federal Express), (ii) each such party has full power
and legal right to enter into and perform its respective obligations under
the Transaction Agreements, (iii) that the execution, delivery and
performance of each of the Transaction Agreements by each of the parties
thereto will not violate the respective parties' constituent documents,
(iv) the due authorization, execution, issuance and delivery by the Owner
Trustee, and the due authentication by the Indenture Trustee, of the
Certificates issued under the Indenture in accordance with the terms of the
Indenture, (v) the due authorization, execution, issuance, delivery and
authentication by the Pass Through Trustee of the Pass Through Certificates
issued under the Pass Through Agreement and the Series Supplement relating
to such Pass Through Certificates, in each case in accordance with the
terms of the Pass Through Agreement and such Series Supplement, and (vi)
that the form of each Transaction Agreement is in compliance with all
applicable laws and governmental rules and regulations (other than the laws
of the United States and the State of New York), then: (A) to the extent
governed by New York law, each Transaction Agreement in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create; (C) the Certificates are
legal, valid and binding obligations of the Owner Trustee enforceable
against the Owner Trustee in accordance with their terms and the terms of
the Indenture and are entitled to the benefits of the Indenture, including
the benefit of the security interest created thereby; and (D) the
beneficial interest of the Owner Participant under the Trust Agreement in
and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, as supplemented by the
Indenture and Security Agreement Supplement, to the Lien of the Indenture
in favor of the Holders. The opinions set forth in this paragraph 3 are
subject to the due filing and recording, where appropriate, with the FAA of
the documents referred to in paragraph 2 above.
4. (a) Each of the Transaction Agreements to which Federal
Express is a party has been duly authorized, executed and delivered by Federal
Express.
(b) The execution, delivery and performance by Federal Express
of each of the Transaction Agreements to which Federal Express is a party do
not, or did not on the date of execution thereof, violate, and fully comply,
or did fully comply on the date of execution thereof, with, any laws and
governmental rules and regulations of the State of New York that may be
applicable to Federal Express. The opinion set forth in this paragraph 4(b)
is rendered without regard to the taking of any action or the conduct of any
other business by Federal Express in the State of New York other than the
transactions contemplated by the Transaction Agreements.
5. The execution, delivery and performance of the
Transaction Agreements (other than the Certificates) by the Owner Trustee
in its individual or trust capacity, as the case may be, and the issuance,
execution, delivery and performance of the Certificates by the Owner
Trustee in its trust capacity do not violate, and fully comply with, any
laws and governmental rules and regulations of the State of New York that
may be applicable to the Owner Trustee in its individual or trust capacity,
as the case may be. The opinion set forth in this paragraph 5 is rendered
without regard to the effect, if any, on such issuance (in the case of the
Certificates), execution, delivery or performance, of the taking of any
action, the conduct of any business or the exercise of any other powers by
State Street Bank and Trust Company of Connecticut, National Association in
its individual or trust capacity in the State of New York not related to
the transactions contemplated by the Transaction Agreements. We have
assumed that State Street Bank and Trust Company of Connecticut, National
Association has made the filings necessary to comply with Section 131.3 of
the Banking Law of the State of New York, however we express no opinion as
to whether State Street Bank and Trust Company of Connecticut, National
Association is required to comply with said Section 131.3.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture in and to the Aircraft and the
Lease) have been pledged and mortgaged with the Indenture Trustee as part of
the Trust Indenture Estate (subject to the due filing and, where appropriate,
recording of those documents referred to in paragraph 2 above and the
financing statement referred to in Section 4.02(f) of the Participation
Agreement), and the beneficial interest of the Owner Participant under the
Trust Agreement in and to such properties are subject, to the extent provided
in the Indenture, to the Lien of the Indenture in favor of the Holders of the
Certificates issued and to be issued under the Indenture.
7. The Indenture and Security Agreement Supplement, pursuant
to the Granting Clause of the Indenture, creates, as security for the
Certificates duly issued and to be issued under the Indenture, the first
priority security interest in the Aircraft it purports to create, the
perfection and rank thereof being subject to the registration with the FAA of
the Aircraft in the name of the Owner Trustee and the due filing and, where
appropriate, recording in accordance with the Transportation Code of the
documents referred to in paragraph 2 above. We express no opinion with
respect to the status of any security interest in any portion of the Aircraft
which does not constitute an "aircraft" or "aircraft engine", as defined in
paragraphs (6) and (7) of Section 40102(a) of the Transportation Code.
8. Except for (i) the filings and recordings referred to in
paragraph 2 above, (ii) the registration of the issuance and sale of the
Pass Through Certificates under the Securities Act and (iii) compliance
with the securities laws of each applicable state, neither the execution
and delivery by Federal Express of the Participation Agreement or any other
Operative Agreement to which it is a party, nor the consummation of any of
the transactions by Federal Express contemplated thereby, requires the
consent or approval of, the giving of notice to, or the registration with,
or the taking of any other action in respect of, the Department of
Transportation, the FAA, the Securities and Exchange Commission or any
other Federal or New York State governmental authority.
9. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the Lessor,
as lessor under and by reason of the Lease. The Lease, including the
rights under Section 1110 of the United States Bankruptcy Code, has been
assigned to the Indenture Trustee pursuant to the Indenture as part of the
collateral for the Certificates and, as assignee, the Indenture Trustee has
the benefit of Section 1110.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinions of ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Peregrin and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of
Federal Express to be delivered to you and dated the date hereof, for
purposes of the matters covered thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware. We express no opinion as to any matters
involving aviation law.
(c) The opinion contained in paragraph 3(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(a)
[Letterhead of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We have acted as special New York counsel for (i) PMCC Leasing
Corporation ("PMCC") in connection with the transactions contemplated by the
Participation Agreement (Federal Express Corporation Trust No. N670FE), dated
as of May 1, 1997 (the "Participation Agreement"), among Federal Express
Corporation, as lessee, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as owner trustee, PMCC, as owner participant, and First
Security Bank, National Association, not in its individual capacity, except as
otherwise stated, but solely as indenture trustee, pass through trustee and
subordination agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation ("▇▇▇▇▇▇
▇▇▇▇▇▇") in connection with the transactions contemplated by the Owner
Participant Guaranty (the "Guaranty"), dated as of May 1, 1997 from ▇▇▇▇▇▇
▇▇▇▇▇▇ to each of the beneficiaries named therein. This opinion is being
furnished to you pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Participation Agreement.
We have examined executed counterparts of the Participation
Agreement, the Trust Agreement, the Tax Indemnity Agreement, the Ancillary
Agreement I and the Ancillary Agreement II (collectively, the "Owner
Participant Documents") and the Guaranty. We have made such other and further
investigations as we have deemed necessary or appropriate for purposes of this
opinion. In our examination we have assumed, with your permission, and
without independent investigation or inquiry, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as
certified or photocopies and the authenticity of the originals of such latter
documents.
With your permission, we have further assumed that (i) the
Owner Participant Documents and the Guaranty have been duly authorized,
executed and delivered by each of the parties thereto, (ii) the respective
parties thereto have the power and authority to execute, deliver and
perform the Owner Participant Documents and the Guaranty, (iii) the
execution, delivery and performance of the Owner Participant Documents and
the Guaranty by the parties thereto do not and will not violate the
certificate of incorporation, by-laws or other organizations documents of
any such party or any bond, debenture, note, mortgage, indenture, lease or
other agreement or instrument to which any such party is a party or by
which any such party is bound and does and will fully comply with all laws
an regulations applicable to each such party and (iv) the Owner Participant
Documents constitute valid, legal and binding obligations of the parties
thereto (other than PMCC), enforceable against such parties (other than
PMCC) in accordance with their respective terms.
Based upon the foregoing, we are of the opinion that:
1. The Participation Agreement and the Tax Indemnity Agreement
constitute valid and legally binding obligations of PMCC enforceable against
PMCC in accordance with their respective terms.
2. The Guaranty constitutes a valid and legally binding obligation
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ enforceable against ▇▇▇▇▇▇ ▇▇▇▇▇▇ in accordance with its
terms.
3. The execution, delivery and performance by PMCC of the Owner
Participant Documents will not result in any violation of any Federal or New
York statute or any order, rule or regulation issued pursuant to any New York
or Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over PMCC.
4. The execution, delivery and performance by ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
the Guaranty will not result in any violation of any Federal or New York
statute or any order, rule or regulation issued pursuant to any New York or
Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over ▇▇▇▇▇▇ ▇▇▇▇▇▇.
5. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by PMCC for the execution, delivery and performance by PMCC of the
Owner Participant Documents.
6. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by ▇▇▇▇▇▇ ▇▇▇▇▇▇ for the execution, delivery and performance by
▇▇▇▇▇▇ ▇▇▇▇▇▇ of the Guaranty.
Our opinions in paragraphs 1 and 2 are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
We are members of the Bar of the State of New York and express
no opinion herein concerning any law other than the laws of the State of New
York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied by you for any
other purpose, or relied upon by or furnished to any other person, firm or
corporation without our prior written consent, except that the Owner
Participant may furnish a copy of this opinion to a potential transferee or
participant of the interest of such entity or otherwise as required by a
governmental authority.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(b)
[Letterhead of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
In my capacity as Assistant General Counsel and Assistant
Secretary of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware corporation, I have
supervised corporate proceedings of (i) PMCC Leasing Corporation, a Delaware
corporation (the "Owner Participant"), in connection with the Owner
Participant's participation in the transactions contemplated by that certain
Participation Agreement (Federal Express Corporation Trust No. N670FE), dated
as of May 1, 1997 (the "Participation Agreement"), among the Owner
Participant, Federal Express Corporation, as Lessee; State Street Bank and
Trust Company of Connecticut, National Association, except as otherwise
stated, not in its individual capacity but solely as Owner Trustee; and First
Security Bank, National Association not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee, Pass Through Trustee and
Subordination Agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware
corporation (the "Guarantor"), in connection with the transactions
contemplated by the Owner Participant Guaranty (the "Guaranty"), dated as of
May 1, 1997 from ▇▇▇▇▇▇ ▇▇▇▇▇▇ to each of the beneficiaries named therein.
This opinion is delivered pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein but not otherwise defined herein,
shall have the respective meanings set forth in the Participation Agreement.
In connection with this opinion, I have examined originals,
or copies certified or otherwise identified to my satisfaction of the
Participation Agreement, the Trust Agreement, the Tax Indemnity Agreement,
the Ancillary Agreement I and the Ancillary Agreement II (each such
document to be hereafter referred to individually as an "Owner Participant
Document" and collectively as the "Owner Participant Documents") and the
Guaranty. I have also examined such corporate documents, records and
instruments of the Owner Participant and the Guarantor as in my judgement
are necessary or appropriate to enable me to render the opinions expressed
below. In rendering such opinions, I have relied upon the representations
and warranties contained in or made pursuant to the Owner Participant
Documents and the Guaranty and have assumed the due authorization,
execution and delivery of all documents and instruments by all parties
thereto other than the Owner Participant.
Based on the foregoing and subject to the qualifications and
matters of reliance set forth herein, I am of the opinion that:
1. The Owner Participant is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Owner Participant Documents and
to fulfill and comply with the terms, conditions and other provisions
thereof.
2. The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Guaranty and to fulfill and
comply with the terms, conditions and other provisions thereof.
3. The Owner Participant Documents have been duly authorized
by all necessary corporate action on the part of the Owner
Participant, and have been duly executed and delivered by the Owner
Participant.
4. The Guaranty has been duly authorized by all necessary
corporate action on the part of the Guarantor, and has been duly
executed and delivered by the Guarantor.
5. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the Owner
Participant of the Owner Participant Documents.
6. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the
Guarantor of the Guaranty.
7. There are no actions, suits or proceedings (whether or not
purportedly on behalf of the Owner Participant) pending or, to my
knowledge, threatened against or affecting the Owner Participant or
any property rights of the Owner Participant at law or in equity or
before any commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Owner
Participant or its ability to perform its obligations under the Owner
Participant Documents or which would affect the legality, validity or
enforceability of such Owner Participant Documents.
8. There are no actions, suits or proceedings (whether or
not purportedly on behalf of the Guarantor) pending or, to my
knowledge, threatened against or affecting the Guarantor or any
property rights of the Guarantor at law or in equity or before any
commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Guarantor or
its ability to perform its obligations under the Guaranty or which
would affect the legality, validity or enforceability of such
Guaranty.
9. Neither the execution and delivery of the Owner Participant
Documents, the consummation of the transactions therein contemplated
nor the fulfillment of or compliance with the terms, conditions and
other provisions thereof will conflict with, or result in any breach
of, any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Owner Participant, (ii) any order,
injunction or decree of any court or governmental instrumentality
binding upon the Owner Participant, (iii) the Certificate of
Incorporation or Bylaws of the Owner Participant, or (iv) any bond,
debenture, note, mortgage indenture or other agreement or instrument
to which the Owner Participant is now a party or by which the
property of the Owner Participant may be bound.
10. Neither the execution and delivery of the Guaranty, the
consummation of the transactions therein contemplated nor the
fulfillment of or compliance with the terms, conditions and other
provisions thereof will conflict with, or result in any breach of,
any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Guarantor, (ii) any order, injunction or
decree of any court or governmental instrumentality binding upon the
Guarantor, (iii) the Certificate of Incorporation or Bylaws of the
Guarantor, or (iv) any bond, debenture, note, mortgage indenture or
other agreement or instrument to which the Guarantor is now a party
or by which the property of the Guarantor may be bound.
I am a member of the bar of the State of New York, and I do
not purport to be conversant with, or to express any opinion herein
concerning, the laws of any jurisdiction other than those of the State of
New York and the United States of America and the General Corporation Law
of the State of Delaware. In addition, I express no opinion concerning the
laws of the State of New York, the United States of America or any other
jurisdiction applicable to the offering or sale of securities. Further, I
have made no investigation and express no opinion, as to any aviation law
or other laws, statutes, rules or regulations applicable due to the
particular nature of the equipment subject to the Lease.
This opinion is solely for the benefit of the addresses hereof
and their respective successors and assigns for use in connection with the
transactions contemplated by the Owner Participant Documents and may not be
relied upon by any other person or for any other purpose without my express
written consent. This opinion may be relied upon by Messrs. Simpson, Thacher
& ▇▇▇▇▇▇▇▇ in rendering their opinion of even date herewith.
Very truly yours,
▇▇▇▇▇ ▇. Rights
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(3)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Participation Agreement (Federal Express Corporation
Trust No. N670FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express Corporation, as Lessee, PMCC Leasing
Corporation, as Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee, and First Security, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent. Pursuant
to the Participation Agreement, one Airbus A300F4-605R aircraft bearing
U.S. Registration No. N670FE (the "Aircraft") is being financed. This
opinion is furnished pursuant to Section 4.01(k)(iv) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined are
used as defined in the Participation Agreement, except that references
herein to any instrument shall mean such instrument as in effect on the
date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Indenture;
(c) The Ancillary Agreement I;
(d) The Ancillary Agreement II:
(e) The Collateral Account Control Agreement;
(f) The Certificates; and
(g) The French Pledge Agreement;
(each of the documents identified in paragraphs (a) through (g) above are
collectively referred to as the "Indenture Trustee Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Indenture
Trustee Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers, and each of First
Security and the Indenture Trustee, as the case may be, has or had,
on the date of execution thereof, full corporate power, authority and
legal right to execute, deliver and perform each of the Indenture
Trustee Documents to which it is or is to be a party and to
authenticate the Certificates delivered on the Certificate Closing
Date.
2. Each of First Security and the Indenture Trustee, as the
case may be, has duly authorized, executed and delivered each
Indenture Trustee Document to which it is a party; each such document
constitutes a legal, valid and binding obligation of the Indenture
Trustee (and, to the extent set forth in the respective Indenture
Trustee Document, of First Security) enforceable against the
Indenture Trustee (and, to the extent set forth in the respective
Indenture Trustee Document, against First Security) in accordance
with its terms.
3. The Certificates issued and dated the Certificate Closing
Date have been duly authenticated and delivered by the Indenture
Trustee pursuant to the terms of the Indenture.
4. Neither the authorization, execution and delivery by the
Indenture Trustee or First Security, as the case may be, of the
Indenture Trustee Documents, nor the authentication and delivery by
the Indenture Trustee of the Certificates nor the fulfillment or
compliance by the Indenture Trustee or First Security with the
respective terms and provisions thereof nor the consummation of any
of the transactions by the Indenture Trustee or First Security, as
the case may be, contemplated thereby, requires the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any court or administrative
or governmental authority or agency of the State of Utah or the
United States of America governing the banking or trust powers of
First Security.
5. The execution, delivery and performance by the Indenture
Trustee or First Security, as the case may be, of each of the
Indenture Trustee Documents and the authentication and delivery of
the Certificates by the Indenture Trustee are not in violation of the
charter or by-laws of First Security or of any law, governmental
rule, or regulation of the State of Utah or the United States of
America governing the banking or trust powers of First Security or,
to our knowledge, of any indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term lease, license or other
agreement or instrument to which it is a party or by which it is
bound or, to our knowledge, of any judgment or order of the State of
Utah or the United States of America relating to the banking or trust
powers of First Security.
6. There are no fees, taxes or other governmental charges
payable by the Owner Trustee, the Indenture Trustee (except taxes
imposed on fees payable to First Security) or the Certificate Holders
to the State of Utah or any political subdivision thereof in
connection with the execution, delivery or performance of any of the
Operative Agreements or in connection with the issuance and
acquisition of the Certificates by the Certificate Holders or the
beneficial interests of the Certificate Holders in the Trust
Indenture Estate solely because First Security) (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. Neither the
Indenture Trustee nor the trust created under the Indenture will be
subject to any fee, tax or other governmental charge (except for
taxes imposed on fees payable to First Security) under the laws of
the State of Utah or any political subdivision thereof in existence
on the date hereof, on, based on or measured by, directly or
indirectly, the gross receipts, net income or value of the Trust
Indenture Estate solely because First Security (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. There is no fee,
tax or other governmental charge (except for taxes imposed on fees
payable to First Security) under the laws of the State of Utah or any
political subdivision thereof in existence on the date hereof, on,
based on or measured by any payments under the Certificates by reason
of the creation of the trust under the Indenture solely because First
Security (a) is incorporated under the laws of the State of Utah, (b)
has its principal place of business in the State of Utah, (c)
performs (in its individual capacity or as Indenture Trustee) any or
all of its duties under the Indenture Trustee Documents in the State
of Utah, and (d) engages in any activities unrelated to the
transactions contemplated by the Indenture Trustee Documents in the
State of Utah. We express no opinion as to whether or not any fees,
taxes or other charges are now or hereafter may be payable by the
Owner Participant to the State of Utah or any political subdivision
thereof in connection with (a) the execution, delivery or performance
by any of the Indenture, the Participation Agreement or any of the
other Operative Agreements and (b) the making by the Owner
Participant of its investment in the Aircraft.
7. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting First
Security or the Indenture Trustee, as the case may be, or any of its
properties in any court or before any administrative agency or
arbitrator, which, if adversely determined, would materially
adversely affect the ability of First Security or the Indenture
Trustee, as the case may be, to perform its obligations under any of
the Indenture Trustee Documents, and there are no pending or, to our
knowledge, threatened actions or proceedings before any court,
administrative agency or tribunal involving First Security or the
Indenture Trustee, as the case may be, in connection with the
transactions contemplated by any of the Indenture Trustee Documents.
The foregoing opinions are subject to the following
assumptions, exceptions and qualifications:
A. We are admitted to practice law in the State of Utah and we
do not hold ourselves out as being experts on the laws of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Utah, the federal laws of the United States of America governing the banking
and trust powers of First Security and Title II of the United States Code
entitled "Bankruptcy". However, we express no opinion with respect to (i)
federal securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) the Federal Aviation Act of 1958, as amended and (iii)
state securities or blue sky laws. Insofar as the foregoing opinions relate
to the validity and enforceability in the State of Utah of the Certificates
and the other Indenture Trustee Documents expressed to be governed by the laws
of the State of New York, we have assumed that the laws of New York are
identical to the laws of Utah in all material respects, and that the
Certificates and such Indenture Trustee Documents constitute legal, valid,
binding and enforceable documents or instruments under such laws (as to which
we express no opinion). No opinion is expressed as to the priority of any
security interest or as to title to any part of the Trust Estate.
B. The foregoing opinions regarding enforceability of any
document or instrument, are subject to (i) applicable bankruptcy, insolvency,
moratorium, reorganization, receivership and similar laws affecting the rights
and remedies of creditors generally, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than First Security and the
Indenture Trustee, of the Indenture Trustee Documents to which each is a party
and that each of such parties has the full power, authority and legal right to
execute and deliver each such document.
D. We have assumed that all signatures (other than those of
the Indenture Trustee or First Security) on documents and instruments
examined by us are genuine, that all documents and instruments submitted to
us as originals are authentic, and that all documents and instruments
submitted to us as copies conform with the originals, which facts we have
not independently verified.
E. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(4)(a)(i)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No. N670FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N670FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this opinion to
you in accordance with Section 4.01 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the enforceability
of any particular provision of any of the Owner Trustee Documents
relating to remedies after default or as to the availability of any
specific or equitable relief of any kind. However, we are of the
opinion that, subject to the other limitations and qualifications
contained in this opinion, the remedies provided in the Owner Trustee
Documents, taken as a whole, are adequate for the realization of the
principal benefits or security of said agreements (except for the
economic consequences of procedural or other delay); and
(iv) the enforcement of any rights and the availability
of any specific or equitable relief of any kind may in all cases be
subject to an implied duty of good faith and to general principles of
equity (regardless of whether such enforceability or relief is
considered in a proceeding at law or in equity) and, as to any of
your rights to collateral security, will be subject to a duty to act
in a commercially reasonable manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has full corporate power, authority and legal right to execute,
deliver and perform its obligations under the Trust Agreement and, as
Owner Trustee under the Trust Agreement, to execute, deliver and
perform its obligations under the other Owner Trustee Agreements and
to issue, execute, deliver and perform its obligations under the
Certificate.
2. State Street has duly authorized, executed, and delivered
the Participation Agreement and the Trust Agreement and the
Participation Agreement and the Trust Agreement constitute the legal,
valid and binding obligation of State Street, enforceable against it
in its individual capacity in accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. To our knowledge, there exist no liens or encumbrances
affecting the right, title and interest of the Owner Trustee in and
to the Trust Estate resulting from claims against State Street not
related to the ownership of the Trust Estate or any other transaction
contemplated by the Operative Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
+▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N670FE) dated as of May 1, 1997 (the
"Indenture"), between First Security Bank, National Association
(the "Indenture Trustee"), and State Street Bank and Trust
Company of Connecticut, National Association, not in its
individual capacity, but solely as Owner Trustee (the "Owner
Trustee")
Ladies and Gentlemen:
We have acted as special Connecticut counsel to the Owner
Trustee in connection with the Indenture and the Collateral Account Control
Agreement dated as of May 1, 1997 (the "Control Agreement"), among the Owner
Trustee, the Indenture Trustee and State Street Bank and Trust Company, as
Custodian (the "Custodian").
We are issuing this opinion solely in our capacity as counsel
to the Owner Trustee under the circumstances set forth in this paragraph and
solely as to the matters set forth herein. Pursuant to the Indenture, the
Owner Trustee purports to grant to the Indenture Trustee a security interest,
inter alia, in those securities and instruments, presently owned or hereafter
acquired by the Owner Trustee, that are from time to time credited to an
account numbered [*****] (the "Collateral Account") established by the Owner
Trustee with the Custodian and which securities and instruments the Owner
Trustee has directed the Custodian to identify on the books and records of the
Custodian as being subject to a security interest in favor of the Indenture
Trustee to secure the payment to the Indenture Trustee of the Owner Trustee's
obligations (the "Obligations") under the Indenture. Those securities and
instruments which the Owner Trustee has directed the Custodian to so identify
on the books of the Custodian as being subject to such security interest, and
which, at the time of reference thereto, have not been withdrawn from such
identification or the Collateral Account, are hereinafter referred to,
collectively, as the "Liquid Collateral." We have assumed with your
permission for purposes of this opinion that the Liquid Collateral consists
solely of (a) "securities", either "uncertificated securities" or
"certificated securities", as each such term is defined in Section 8-102 of
the Uniform Commercial Code as currently in effect in the State of Connecticut
(the "Connecticut UCC"), (b) "instruments" (as such term is defined in Section
9-105(1)(i) of the Connecticut UCC) and (c) "general intangibles" (as such
term is defined in Section 9-106 of the Connecticut UCC).
For purposes of this opinion, we have examined the Indenture,
the Control Agreement and such other documents and instruments as are referred
to as having been examined by us for purposes of our opinion letter dated May
___,1997, addressed to the parties listed on Schedule A hereto.
As to all matters of fact, we have examined and have relied
entirely upon the representations and warranties contained in and made
pursuant to the Indenture and the Control Agreement, without any independent
investigation of any kind.
We have assumed the genuineness of all signatures (other
than those on behalf of the Owner Trustee and the Custodian), the
conformity to the originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form, and the legal competence of each individual
executing any document (other than on behalf of the Owner Trustee and the
Custodian).
For purposes of this opinion, we have made such examination of
law as we have deemed necessary. This opinion is limited solely to the
internal substantive laws of the State of Connecticut as applied by courts
located in the State of Connecticut and, where applicable, (i) the revised
Article 8 of the Uniform Commercial Code (with Conforming and Miscellaneous
Amendments to Articles 1, 3, 4, 5, 9 and 10) 1994 Official Text (the "Revised
Article 8") and (ii) the federal laws of the United States of America, in each
case without regard to choice of law. No opinion is given as to the choice of
law which any tribunal may apply to the transactions referred to herein.
Our opinion is further subject to the following exceptions,
qualifications and assumptions, all of which we understand to be acceptable to
you:
(a) We have assumed without any independent investigation
that each party to the transactions contemplated by the Indenture or
the Control Agreement at all times relevant thereto (other than the
Owner Trustee) was duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was
incorporated or organized, and had and has the full power, authority
and legal right under its certificate of incorporation, articles of
organization and other governing documents, corporate or other
enterprise legislation and applicable laws, as the case may be, to
execute and deliver and perform its obligations under all documents
executed by it in connection with those transactions.
(b) We have assumed without any independent investigation
(i) the due authorization, execution and delivery of each of the
Indenture and the Control Agreement by the Indenture Trustee, (ii)
that the execution, delivery and performance by the Indenture
Trustee of each of the Indenture and the Control Agreement does
not and will not conflict with, or result in a breach of, the
terms, conditions or provisions of, or result in a violation of,
or constitute a default or require any consent (other than such
consents as have been duly obtained) under, any organizational
document, any order, judgment, arbitration award or stipulation,
or any agreement, to which the Indenture Trustee is a party or is
subject or by which any of the properties or assets of the
Indenture Trustee is bound, (iii) that the Owner Trustee has
received "value," as defined under the Connecticut UCC, for the
incurrence of the Obligations, (iv) that, whenever the Custodian
receives instructions from the Owner Trustee for the Custodian to
note on its books and records that any securities or instruments
credited to the Collateral Account are to be subject to a security
interest in favor of the Indenture Trustee to secure the payment
of the Obligations, such instructions will have been duly
authorized by or on behalf of the Owner Trustee and (v) that, when
the Indenture Trustee is to act in connection with any of the
transactions contemplated by the Indenture, it is acting in its
capacity as Indenture Trustee.
(c) We have made no examination of, and no opinion is given
herein as to, the Owner Trustee's title to or other ownership rights
in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, the Liquid Collateral, other than the
security interest in favor of the Indenture Trustee as contemplated
by the Indenture and the Control Agreement, and have assumed that the
Owner Trustee has, or at the time of any purported attachment of the
security interest in the relevant Liquid Collateral will have, rights
in the Liquid Collateral.
(d) The perfection and the effect of perfection and
non-perfection of a security interest in the Liquid Collateral that
comprises "uncertificated securities" are, pursuant to Section
9-103(6) of the Connecticut UCC, and the effectiveness of
registration by the issuer and the rights and duties of the issuer
with respect to the registration of transfer, pledge or release of an
"uncertificated security" are, pursuant to Section 8-106 of the
Connecticut UCC, in each case, governed by the laws of the respective
jurisdictions of organization of the issuer or issuers of such
securities, including the conflict of laws rules of such
jurisdictions. Therefore, we express no opinion with respect to such
matters regarding "uncertificated securities" issued by issuers
organized outside of the State of Connecticut other than book-entry
Treasury securities referred to below.
(e) We point out that, pursuant to Part 357 of Title 31 of
the United States Code of Federal Regulations ("CFR"), with
respect to United States "book-entry Treasury securities"
maintained by a Federal Reserve Bank and, pursuant to other
relevant sections of the CFR, with respect to various other
securities issued or guaranteed by the federal government of the
United States or an agency thereof or a corporation sponsored
thereby and maintained by a Federal Reserve Bank, the perfection
of security interests granted by commercial, non-governmental
parties in book-entry Treasury securities, or such other federal
securities, as the case may be, held in a securities account of a
participant financial institution, such as the Custodian,
maintaining such account with such Federal Reserve Bank, will be
governed by the law of the jurisdiction determined in accordance
with Section 357.11 of Title 31 of the CFR. If that jurisdiction
has not adopted Revised Article 8, then such jurisdiction will be
deemed to have adopted Revised Article 8 for purposes of
determining the law governing such perfection. Accordingly,
although Revised Article 8 has not been enacted by Connecticut as
part of the Connecticut UCC, nevertheless, pursuant to Part 357 of
Title 31 of the CFR, Revised Article 8 governs the perfection of a
security interest in book-entry Treasury securities to the extent
that Connecticut law would otherwise be applicable thereto.
(f) We have also assumed that (i) any securities comprised in
the Liquid Collateral and held by Depository Trust Company or another
clearing corporation will be held by Depository Trust Company or such
other clearing corporation for the direct account of the Custodian
and not for the account of the Custodian through any other financial
intermediary, (ii) any securities comprised in the Liquid Collateral
and not constituting either (x) "certificated securities" (as defined
in Section 8-102 of the Connecticut UCC) for which the Custodian
physically holds the certificate or certificates evidencing solely
such securities, or (y) "uncertificated securities" (as defined in
Section 8-102 of the Connecticut UCC) for which the Custodian is the
registered owner on the books of the issuer solely of such
securities, will constitute, or will be held as part of, a fungible
bulk of such "securities" that are registered in the name of the
Custodian or are shown on the Custodian's account on the books of
another financial intermediary, (iii) any "certificated securities"
(as defined in Section 8-102 of the Connecticut UCC) comprised in the
Collateral, if held directly by the Custodian, will be at all times
in the physical possession of the Custodian, and any other
"instruments" (as defined in Section 9-105(1)(i) of the Connecticut
UCC) comprised in the Collateral will be at all times held directly
by and in the physical possession of the Custodian, and (iv) any
securities comprised in the Liquid Collateral consisting of
"book-entry Treasury securities" or other uncertificated federal
securities will be credited to a direct account of the Custodian with
a Reserve Bank (as such term is defined in the relevant section of
the CFR) and not for the account of the Custodian through a financial
intermediary.
(g) We do not express any opinion as to the attachment or
perfection of any security interest in (i) any securities that are
maintained with, or held on the system of, Cedel S.A., or any like
maintenance, clearing or settlement system operating outside of the
United States of America, (ii) any collateral of a type other than
"securities" or "general intangibles" (as defined in Section 9-106 of
the Connecticut UCC) or "instruments" (as defined in Section
9-105(1)(i) of the Connecticut UCC), (iii) the Collateral Account, to
the extent that the Collateral Account constitutes an asset, other
than general intangibles, separate from the property credited
thereto, (iv) any Liquid Collateral which, at the time of reference
thereto, is no longer identified as subject to a security interest
in favor of the Indenture Trustee or has otherwise been withdrawn from
the Collateral Account, or (v) any identifiable proceeds of any Liquid
Collateral (A) following the lapse of the ten day period set forth in
Section 9-306(3) of the Connecticut UCC, to the extent that such
proceeds do not constitute securities, instruments or general
intangibles in which a security interest is perfected in the manner
contemplated by this opinion, as if such proceeds were original
Liquid Collateral, (B) where such proceeds constitute securities and
in which proceeds a security interest is not perfected in the manner
contemplated by this opinion, as if such proceeds were original
collateral, or (C) where the proceeds constitute collateral which is
excluded from Article 8 or 9 of the Connecticut UCC.
(h) We express no opinion as to the priority of such security
interest over any other or competing interest in or claims against
such Liquid Collateral.
(i) We have assumed that (i) the Custodian, in the ordinary
course of business, accepts for deposit securities as a service for
its customers, maintains securities accounts in the names of such
customers reflecting ownership of or interests in such securities,
and, in regard to the transactions contemplated by the Indenture, is
acting in such capacity, (ii) all securities from time to time
credited to the Collateral Account and to be comprised in the Liquid
Collateral will have been "transferred" (within the meaning of
Section 8-313(1) of the Connecticut UCC) to the Custodian by the
issuers or prior holders of such Liquid Collateral, (iii) the records
of the Custodian indicate and will, at the time of reference thereto,
indicate that the aggregate amount of each security comprised in the
Liquid Collateral, together with all other such securities carried by
the Custodian for its customers and for its proprietary account, is
at least equal to the aggregate amount of such security carried by it
for its customers and for its proprietary account, (iv) the books and
records of the Custodian indicate and will, at the time of reference
thereto, indicate that the securities to be comprised in the Liquid
Collateral are registered on the books and records of the Custodian
as being for the beneficial account of the Owner Trustee, subject to,
as identified on such books and records, the security interest
therein in favor of the Indenture Trustee, and (v) the Custodian has
sent and, at the time of reference thereto, will have sent the
confirmations of such entries and identifications to the Indenture
Trustee and to Federal Express Corporation.
(j) In so far as our opinion relates to the enforceability
of any obligations of the Owner Trustee, the enforcement of such
obligations may be limited by bankruptcy, insolvency,
reorganization, moratorium, marshalling or other laws and rules of
law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights); and we express no opinion as to
(i) the status under Section 548 of the Bankruptcy Code and
applicable state fraudulent conveyance laws of the obligations of
the Owner Trustee under the Indenture or interests purported to be
granted pursuant to the Indenture, (ii) the enforceability of any
particular provision of the Indenture relating to remedies after
default or as to the availability of any specific or equitable
relief of any kind (and we point out that the enforcement of any
of your rights may in all cases be subject to an implied duty of
good faith and fair dealing and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity, and, as to any of your rights to
collateral security, will be subject to a duty to act in a
commercially reasonable manner) or (iii) the enforceability of any
particular provision of the Indenture relating to (A) waivers of
defenses, of rights to trial by jury, or rights to object to
jurisdiction or venue and other rights or benefits bestowed by
operation of law, (B) the effect of suretyship defenses, or
defenses in the nature thereof, with respect to obligations of any
applicable guarantor, joint obligator or surety, (C) waivers of
provisions which are not capable of waiver under Sections 1-102(3)
and 9-501(3) of the Connecticut UCC, (D) the grant of powers of
attorney to the Indenture Trustee, (E) exculpation clauses,
indemnity clauses and clauses relating to releases or waivers of
unmatured claims or rights, (F) interest or other charges that may
be usurious under applicable law, or (G) the collection of
interest on overdue interest or providing for a penalty rate of
interest or late charges on overdue or defaulted obligations.
However, notwithstanding the qualification set forth in the
foregoing clause (ii), and excluding the parenthetical in that
clause, subject to the other exceptions, qualifications and
limitations set forth in this opinion (including the parenthetical
in clause (ii) and subject to the fact that there may be economic
consequences arising out of any procedural or other delay on
account of the limitation or unenforceability of any particular
provision of the Indenture relating to remedies after default,
such limitation or unenforceability does not, in our judgment,
render the provisions of the Indenture and the Control Agreement
relating to remedies after default, taken as a whole, inadequate
for the practical realization of the benefits of enforcement of a
security interest in the Liquid Collateral following the receipt
by the Custodian of an enforcement notice properly given under the
Indenture and the Control Agreement by the Indenture Trustee to
the Custodian with respect to such Liquid Collateral.
(k) With respect to property as to which the security
interest purported to be granted pursuant to the Indenture
attaches after the date hereof, we call to your attention that
Section 552 of the Bankruptcy Code limits the extent to which
assets acquired by a debtor after the commencement of a case under
the United States Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by the
debtor before the commencement of such case. We further call to
your attention that under Section 547 of the Bankruptcy Code, a
security interest that attaches within the relevant period set
forth in Section 547(b)(4) of the Bankruptcy Code may be avoidable
under certain circumstances.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Indenture Trustee has, under the terms of the
Connecticut UCC and, in the case of book-entry Treasury
securities, under the CFR, a perfected security interest in the
Liquid Collateral that constitutes "securities" (as such term is
defined in Section 8-102 of the Connecticut UCC), or "instruments"
(as defined in Section 9-105(1)(i) of the Connecticut UCC), and in
the identifiable proceeds thereof to secure the payment of the
Obligations.
2. The Indenture creates, under the terms of the Connecticut
UCC, a valid security interest in such of the Liquid Collateral that
constitutes "general intangibles" (as such term is defined in Section
9-106 of the Connecticut UCC) and in the identifiable proceeds
thereof to secure the payment of the Obligations. Upon the filing of
a financing statement on form UCC-1 pursuant to the Connecticut UCC
with the Secretary of State of the State of Connecticut naming the
Owner Trustee as Debtor and the Indenture Trustee as Secured Party
and accurately describing the Liquid Collateral and the Collateral
Account, which filing has been duly effected, such security interest
will be perfected (to the extent that the perfection of a security
interest in the Liquid Collateral can be accomplished by the filing
in Connecticut of financing statements under the Connecticut UCC).
We point out that:
(a) The effectiveness of a financing statement will lapse (i)
on the expiration of a five-year period from their dates of filing,
or (if later) five years from the last date as to which such
financing statements were effective following the proper filing of
continuation statements with respect thereto, unless continuation
statements are filed within six months prior to the expiration of the
applicable five-year period, (ii) with respect to general intangibles
in which a security interest has been perfected by the filing of a
financing statement in the jurisdiction of the location of the
debtor, for a period of more than four months after the debtor has
changed its location from that jurisdiction to a new jurisdiction
unless such security is perfected in the new jurisdiction within the
earlier to occur of the end of such four month period or the date on
which such financing statement would have otherwise lapsed, and (iii)
with respect to "investment property," under and as defined in
Revised Article 8, in which a security interest has been perfected by
the filing of a financing statement in the jurisdiction of the
location of the debtor, from the time that the debtor changes its
location from that jurisdiction to a new jurisdiction unless such
security interest is perfected in the new jurisdiction on or before
the time of such change of location.
(b) If any debtor changes its name, identity or corporate
structure such that any financing statement becomes misleading, such
financing statement will be ineffective to perfect a security
interest in any collateral acquired by such debtor more than four
months after such change.
We assume no obligation to update this opinion as a result of
any change in any fact, circumstance or statute or other rule of law
occurring after the date hereof.
This opinion is delivered to you solely in connection with the
transactions referred to herein and for your sole use and no other
person or entity may rely on this opinion without our express written
consent.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(4)(a)(ii)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Delivery Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No. N670FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N670FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this Opinion to
you in accordance with Section 4.02 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the
enforceability of any particular provision of any of the Owner
Trustee Documents relating to remedies after default or as to the
availability of any specific or equitable relief of any kind.
However, we are of the opinion that, subject to the other
limitations and qualifications contained in this opinion, the
remedies provided in the Owner Trustee Documents, taken as a
whole, are adequate for the realization of the principal benefits
or security of said agreements (except for the economic
consequences of procedural or other delay); and
(iv) the enforcement of any rights and the
availability of any specific or equitable relief of any kind may
in all cases be subject to an implied duty of good faith and to
general principles of equity (regardless of whether such
enforceability or relief is considered in a proceeding at law or
in equity) and, as to any of your rights to collateral security,
will be subject to a duty to act in a commercially reasonable
manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has or had, on the date of execution thereof, full corporate power,
authority and legal right to execute, deliver and perform its
obligations under the Trust Agreement and, as Owner Trustee under the
Trust Agreement, to execute, deliver and perform its obligations
under the other Owner Trustee Agreements and to issue, execute,
deliver and perform its obligations under the Certificate.
2. State Street has or had, on the date of execution thereof,
duly authorized, executed, and delivered the Participation Agreement
and the Trust Agreement and the Participation Agreement and the Trust
Agreement constitute the legal, valid and binding obligation of State
Street, enforceable against it in its individual capacity in
accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. The Owner Trustee has received such title to the Aircraft
as has been conveyed to it subject to the rights of the Owner Trustee
and the Lessee under the Lease and the security interest created
pursuant to the Indenture and the Lease; and to our knowledge, there
exist no liens or encumbrances affecting the right, title and
interest of the Owner Trustee in and to the Trust Estate resulting
from claims against State Street not related to the ownership of the
Trust Estate or any other transaction contemplated by the Operative
Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(5)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Pass Through Trust Agreement dated as of May 1, 1997
(the "Pass Through Trust Agreement"), as supplemented by the Series
Supplements dated the date hereof between Federal Express Corporation and
the First Security, not in its individual capacity, except as otherwise
stated, but solely as Pass Through Trustee, designated as Series Supplement
1997-1-A, 1997-1-B and 1997-1-C, respectively (the "Series Supplements")
and the Participation Agreement (Federal Express Corporation Trust No.
N670FE), dated as of May 1, 1997 (the "Participation Agreement"), among
Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent. Pursuant to the Participation
Agreement, one Airbus A300F4-605R aircraft bearing U.S. Registration No.
N670FE (the "Aircraft") is being financed. This opinion is furnished
pursuant to Section 4.01(k)(iv) of the Participation Agreement.
Capitalized terms used herein and not otherwise defined are used as defined
in the Participation Agreement, except that references herein to any
instrument shall mean such instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Pass Through Trust Agreement;
(b) The Series Supplements;
(c) The Pass Through Certificates;
(d) The Participation Agreement;
(e) The Intercreditor Agreement; and
(f) Each Liquidity Facility.
(each of the documents identified in paragraphs (a) through (e) are being
collectively referred to as the "Pass Through Trustee Documents" and each of
the documents identified in paragraphs (d) through (f) are being collectively
referred to as the "Subordination Agent Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Pass Through
Trustee Documents or the Subordination Agent Documents, as the case may be.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
With respect to the opinions set forth in paragraph 8 above,
with your permission we have relied upon, and this opinion is limited by, the
assumptions set forth in the discussion entitled "Certain Utah Taxes" in the
Prospectus Supplement to the Prospectus forming part of Registration Number
No. 333-07691 (the "Registration Statement") for the registration of the Pass
Through Certificates with the Securities and Exchange Commission. We express
no opinion as to the correctness of the foregoing assumptions and we have
conducted no independent investigation in this regard.
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers.
2. Each of First Security, the Pass Through Trustee and the
Subordination Agent, as the case may be, has or had, on the date of
execution thereof, full corporate power, authority and legal right to
execute, deliver and perform each of the Pass Through Trustee
Documents and the Subordination Agent Documents, as the case may be,
and to authenticate the Pass Through Certificates delivered on the
Certificate Closing Date.
3. Each of First Security, the Pass Through Trustee and the
Subordination Agent has duly authorized, executed and delivered each
Pass Through Trustee Document or Subordination Agent Document, as the
case may be; each such document constitutes a legal, valid and
binding obligation of the Pass Through Trustee or the Subordination
Agent, as the case may be (and, to the extent set forth in the
respective Pass Through Trustee Document or Subordination Agent
Document, of First Security) enforceable against the Pass Through
Trustee or the Subordination Agent, as the case may be (and, to the
extent set forth in the respective Pass Through Trustee Document or
Subordination Agent Document, against First Security) in accordance
with its terms.
4. The Pass Through Certificates issued and dated the
Certificate Closing Date have been duly authorized and validly
executed, issued, delivered and authenticated by the Pass Through
Trustee pursuant to the Pass Through Trust Agreement and the Series
Supplements; and the Pass Through Certificates acquired by the
Underwriters under the Underwriting Agreement are enforceable against
the Pass Through Trustee and are entitled to the benefits of the
related Pass Through Trust Agreement and the related Series
Supplements.
5. No order, license, consent, permit, authorization or
approval of or exemption by, and no notice to or filing with, or the
taking of any other action in respect of, any Utah or Federal
governmental authority governing the banking or trust powers of First
Security, the Pass Through Trustee or the Subordination Agent, and no
filing, recording, publication or registration in any public office
is required under Utah or Federal law pertaining to its banking or
trust powers for the due execution, delivery or performance by First
Security, individually or as Pass Through Trustee or Subordination
Agent, as the case may be, of the Pass Through Trustee Documents
(other than the Pass Through Trust Agreement) or the Subordination
Agent Documents, as the case may be, and of the certificate of
authentication, as Pass Through Trustee, on the Pass Through
Certificates, or for the legality, validity, binding effect or
enforceability thereof against First Security, the Pass Through
Trustee or the Subordination Agent, as the case may be.
6. The execution, delivery and performance by the Pass
Through Trustee or First Security, as the case may be, of each of
the Pass Through Documents and the Subordination Agent or First
Security, as the case may be, of each of the Subordination Agent
Documents, and the issuance, execution, delivery and performance
of the Pass Through Certificates by the Pass Through Trustee are
not or were not, on the date of execution thereof, in violation of
the charter or by-laws of First Security or of any law,
governmental rule, or regulation of the State of Utah or the
United States of America governing the banking or trust powers of
First Security or, to our knowledge, of any indenture, mortgage,
bank credit agreement, note or bond purchase agreement, long-term
lease, license or other agreement or instrument to which it is a
party or by which it is bound or, to our knowledge, of any
judgment or order of the State of Utah or the United States of
America relating to the banking or trust powers of First Security.
7. There are no actions, suits, investigations or
proceedings pending or, to our knowledge, threatened against or
affecting First Security, the Pass Through Trustee or the
Subordination Agent or any of its properties in any court or
before any administrative agency or arbitrator, which, if
adversely determined, would materially adversely affect the
ability of First Security, the Pass Through Trustee or the
Subordination Agent, as the case may be, to perform its
obligations under any of the Pass Through Trustee Documents or the
Subordination Agent Documents, as the case may be, and there are
no pending or, to our knowledge, threatened actions or proceedings
before any court, administrative agency or tribunal involving
First Security, the Pass Through Trustee or the Subordination
Agent in connection with the transactions contemplated by any of
the Pass Through Trustee Documents or the Subordination Agent
Documents, as the case may be.
8. Neither the trusts created by the Pass Through Trust
Agreement and the Series Supplements nor the Pass Through Trustee,
in its individual or trust capacity, as the case may be, nor their
respective Affiliates, successors or assigns, will be subject to
any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or
doing business tax), fee or other governmental charge under the
laws of the State of Utah or any political subdivision thereof
(other than taxes imposed on the fees received by State Street
Bank and Trust Company for acting as Pass Through Trustee under
the Series Supplements). Certificate holders who are not
residents of or otherwise subject to tax in Utah will not be
subject to any tax (including, without limitation, net or gross
income, tangible or intangible property, net worth, capital,
franchise or doing business tax), fee or other governmental charge
under the laws of the State of Utah or any political subdivision
thereof as a result of purchasing, owning (including receiving
payments with respect to) or selling a Pass Through Certificate.
There are no applicable taxes under the laws of the State of Utah
or any political subdivision thereof upon or with respect to (a)
the construction, mortgaging, financing, refinancing, purchase,
acquisition, acceptance, rejection, delivery, nondelivery,
transport, location, ownership, insurance, control, assembly,
possession, repossession, operation, use, condition, maintenance,
repair, sale, return, abandonment, replacement, preparation,
installation, storage, redelivery, manufacture, leasing,
subleasing, modification, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application
or disposition of the Aircraft or any interest in any thereof, (b)
payments of Rent or other receipts, income or earnings arising
therefrom or received with respect to the Aircraft or any interest
in any thereof or payable pursuant to the Lease, (c) any amount
paid or payable pursuant to any Operative Agreements, (d) the
Aircraft or any interest therein or the applicability of the Lease
to the Aircraft or any interest in any thereof, (e) any or all of
the Operative Agreements, any or all of the Pass Through
Certificates or any interest in any or all thereof or the
offering, registration, reregistration, issuance, acquisition,
modification, assumption, reissuance, refinancing or refunding of
any or all thereof, and any other documents contemplated thereby
and amendments or supplements hereto and thereto, (f) the payment
of the principal of, or interest or premium on, or other amounts
payable with respect to, any or all of the Pass Through
Certificates, whether as originally issued or pursuant to any
refinancing, refunding, assumption, modification or reissuance, or
any other obligation evidencing any loan in replacement of the
loan evidenced by any or all of the Pass Through Certificates, or
(g) otherwise with respect to or in connection with the
transactions contemplated by the Pass Through Trust Agreement, the
Series Supplements, the Pass Through Certificates and the
Operative Agreements, which would not have been imposed if the
Pass Through Trustee had not had its principal place of business
in, had not performed (either in its individual capacity or as
Pass Through Trustee) any or all of its administrative duties
under the Pass Through Trust Agreement, the Series Supplements,
the Pass Through Certificates and the Operative Agreements in, and
had not engaged in any activities unrelated to the transactions
contemplated by the Pass Through Trust Agreement, the Series
Supplements, the Pass Through Certificates and the Operative
Agreements in, the State of Utah.
9. Each of the Certificates to be delivered to and registered
in the name of the Subordination Agent on the date hereof pursuant to
the Participation Agreement and the Intercreditor Agreement will be
held by the Subordination Agent in trust for the Pass Through Trustee
under the applicable Pass Through Trust Agreement.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(a)
[Letterhead of Kredietbank N.V.]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
I am the manager of the Legal Department of Kredietbank N.V.
("Kredietbank") and have advised Kredietbank and its New York Branch (the
"Branch") in connection with (i) the Irrevocable Revolving Credit Agreement
Class A Certificates, dated as of May 1, 1997 (the "Class A Liquidity
Agreement"), between the Branch and First Security Bank, National
Association, a national banking association, as Subordination Agent under
the Intercreditor Agreement, defined below, and as agent and trustee for
the Federal Express Corporation Pass Through Trust 1997-1-A, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement"), between the Branch and
First Security Bank, National Association, a national banking association,
as Subordination Agent under the Intercreditor Agreement, defined below,
and as agent and trustee for the Federal Express Corporation Pass Through
Trust 1997-1-B (the "Intercreditor Agreement" and, together with the
Liquidity Agreements, the "Liquidity Documents"), and (iii) the
Intercreditor Agreement, dated as of May 1, 1997 (the "Intercreditor
Agreement"), among the Branch, First Security Bank, National Association,
as Pass Through Trustee and as Subordination Agent (the Liquidity
Agreements and the Intercreditor Agreement are hereinafter collectively the
"Liquidity Documents").
Capitalized terms herein which are undefined have the meanings
assigned to them in the Liquidity Documents.
I am rendering this opinion in my capacity as manager of the
Legal Department and without being personally liable to any extent for the
opinions expressed herein.
In connection with the opinions hereinafter given, I have
examined a copy of each of the Liquidity Documents and such other
certificates, documents, agreements and instruments as I have deemed
necessary as a basis for the opinions expressed below.
In such examination, I have assumed the genuineness of all
signatures, the authenticity of all agreements, certificates, instruments and
documents submitted to me as originals, and the conformity to the originals of
all agreements, certificates, instruments and documents submitted to me as
copies. As to questions of fact material to the opinions expressed below, I
have, when relevant facts were not independently established by me, examined
and relied upon representations of officers of Kredietbank.
Based upon the foregoing examination and assumptions, and
subject to the qualifications set forth below, I am of the opinion that:
1. Kredietbank is duly organized and validly existing as a
Belgian public law banking institution under the law of Belgium and
has full power and authority (corporate and otherwise) to execute,
deliver and perform the Liquidity Documents.
2. [▇▇▇ ▇▇▇▇▇] or [▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇], acting together with
[▇▇▇▇ ▇▇▇▇▇▇▇], if acting for and on behalf of the Branch, are
duly authorized by Kredietbank to execute and deliver the
Liquidity Documents for and on behalf of the Branch. Assuming
each of the Liquidity Documents has been duly executed and
delivered for and on behalf of the Branch by such persons, no
further authorization by or any corporate action of Kredietbank is
required in connection with the execution, delivery and
performance thereof.
3. The governing-law clause, subjecting the Liquidity
Documents to New York law, is valid under Belgian law.
(i) Under Belgian law, New York law will be applied to an
agreement, such as the Liquidity Documents, which under Belgian
law has been validly subjected to New York laws.
(ii) (a) None of the terms of the Liquidity Documents
is irreconcilable with important principles of Belgian law,
and (b) there are no mandatory provisions of Belgian law
which must be applied to the transactions covered by the
Liquidity Documents.
(iii) Each of the Liquidity Documents constitutes the
legal, valid and binding obligation of Kredietbank,
enforceable against Kredietbank in accordance with its
terms, the rules of civil procedures of Belgium and the
applicable provisions of the chosen law of New York.
4. No authorization, consent, approval or other action by,
and no notice to or filing with, any governmental, administrative
or other authority or court of Belgium is required for the
execution or delivery of the Liquidity Documents by Kredietbank
through the Branch or for the performance by Kredietbank or by the
Branch of the Liquidity Documents.
5. The execution, delivery and performance of the Liquidity
Documents by Kredietbank or the Branch will not result in any
violation by Kredietbank or by the Branch of any law of Belgium.
6. The contractual obligations incurred by virtue of the
execution and delivery of the Liquidity Documents for and on behalf
of the Branch are the obligations of Kredietbank, and Kredietbank has
no defenses against the performance of such obligations which are
based on the fact that Kredietbank had acted through the Branch in
executing and delivering the Liquidity Documents.
7. If a final and conclusive judgment of the Supreme Court of
the State of New York, New York County, or of the Untied States
District Court for the Southern District of New York for a definite
sum for the recovery of amounts due and unpaid under the Liquidity
Documents were to be rendered against Kredietbank, a reexamination or
relitigation on the merits of the subject matter thereof in
accordance with Article 570 of the Belgian Judicial Code would be
necessary in order to obtain recognition and/or enforcement of such
judgment in Belgium.
8. The obligations of Kredietbank under the Liquidity
Documents rank at least equal in priority of payment and in all
other respects with its obligations to pay any other unsecured and
unsubordinated obligations of Kredietbank for borrowed money,
including deposit liabilities, that are not expressly preferred by
law.
The foregoing opinions are subject to the following
qualifications:
(i) The opinion in paragraph (3) with respect to
enforceability is subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws affecting creditors' rights generally, applicable to
Kredietbank and to any law or general principle of law from
time to time in effect in Belgium that could be considered by
the Belgian Courts as a provision of public policy.
(ii) In giving the opinions in paragraphs (3)(iii), (6) and
(8), I have assumed, with your consent, that each of the
Liquidity Documents is legal, valid and binding under New York
law, all as set forth more fully in the opinion dated of even
date herewith of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ issued in
connection with the Liquidity Documents.
(iii) No opinion is expressed with respect to the law of any
jurisdiction other than the law of Belgium.
This opinion is being furnished to you solely for your benefit
in connection with the transactions described above and may not be used,
circulated, quoted or otherwise referred to for any other purpose without my
express written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(b)
[Letterhead of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
We have acted as special New York counsel to Kredietbank
N.V., New York Branch (herein called the "Liquidity Provider") in
connection with the transactions contemplated by (i) the Irrevocable
Revolving Credit Agreement Class A Certificates, dated as of May 1, 1997
(the "Class A Liquidity Agreement"), between the Liquidity Provider and
First Security Bank, National Association, as Subordination Agent under the
Intercreditor Agreement, as defined below, as agent and trustee for the
Federal Express Corporation 1997-1-A Pass Through Trust, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement" and, together with the Class
A Liquidity Agreement, the "Liquidity Agreements"), between the Liquidity
Provider and First Security Bank, National Association, as Subordination
Agent under the Intercreditor Agreement, as defined below, as agent and
trustee for the Federal Express Corporation 1997-1-B Pass Through Trust,
and (iii) the Intercreditor Agreement, dated as of May 1, 1997 (the
"Intercreditor Agreement" and, together with the Liquidity Agreements, the
"Liquidity Documents"), among the Liquidity Provider and First Security
Bank, National Association, as Pass Through Trustee and as Subordination
Agent. Capitalized terms used herein but not otherwise defined herein
shall have the meanings provided in the Liquidity Documents.
In rendering the opinion expressed below, we have examined
the Liquidity Documents, the opinion dated the date hereof of ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Esq., manager of the Legal Department of Kredietbank N.V., and such
other documents as we have deemed necessary.
In our examination, we have assumed the authenticity of all
documents submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies. When relevant
facts were not independently established, we have relied upon representations
made in or pursuant to the Liquidity Documents.
In rendering the opinion expressed below, we have assumed, with
respect to each Liquidity Document, that:
(i) it has been duly authorized by, has been duly executed and
delivered by, and (except to the extent set forth in the
opinion below as to the Liquidity Provider) constitutes
legal, valid, binding and enforceable obligations of all of
the parties thereto;
(ii) all signatories thereto have been duly authorized; and
(iii) all of the parties thereto are duly organized and validly
existing and have the power and authority (corporate,
partnership, trust or other) to execute, deliver and perform
thereunder.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinion
expressed below, we are of the opinion that each Liquidity Document
constitutes the legal, valid and binding obligation of the Liquidity
Provider, enforceable against the Liquidity Provider in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or other similar laws
relating to or affecting the rights of creditors generally and except as
the enforceability of such Liquidity Document is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality, reasonableness,
good faith and fair dealing.
The foregoing opinion is subject to the following comments and
qualifications:
(A) The enforceability of provisions in the Liquidity
Documents to the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances.
(B) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which the Liquidity Provider is located (other
than New York) that limit the interest, fees or other charges the
Liquidity Provider may impose for the loan or use of money or other
credit, (ii) Section 7.11(a)(i) of each Liquidity Agreement and
Section 10.11(a)(i) of the Intercreditor Agreement, insofar as such
Sections relate to the subject matter jurisdiction of a Federal court
sitting in New York, New York to adjudicate any controversy related
to the Liquidity Documents, (iii) the waiver of inconvenient forum
set forth in Section 7.11(a)(ii) of each Liquidity Agreement and
Section 10.11(a)(ii) of the Intercreditor Agreement with respect to
proceedings in a Federal court sitting in New York, New York and a
State court of the State of New York and (iv) the waiver of immunity
set forth in Section 10.11(c) of the Intercreditor Agreement with
respect to proceedings in a Federal court sitting in New York, New
York and a State court of the State of New York.
The foregoing opinion is limited to matters involving the
Federal laws of the United States of America and the law of the State of
New York, and we do not express any opinion as to the laws of any other
jurisdiction. In particular, we do not express any opinion as to the laws
of Belgium and, to the extent such laws may be relevant to the opinion
expressed herein, we have, with your permission, relied upon the
aforementioned opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal
Department of Kredietbank N.V., without independently considering the
matters covered thereby, and our opinion is subject to all limitations,
exceptions and qualifications contained therein as if set forth herein in
full.
At the request of the Liquidity Provider, this opinion letter is
provided to you by us in our capacity as special New York counsel to the
Liquidity Provider, and this opinion letter may not be relied upon by any
Person for any purpose other than in connection with the transactions
contemplated by the Liquidity Documents without, in each instance, our prior
written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(7)
[Letter of General Electric Company]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N670FE
Reference is made to (i) that certain Participation Agreement
(Federal Express Corporation Trust No. N670FE), dated as of May 1, 1997
(the "Participation Agreement") by and among Federal Express Corporation,
as Lessee ("Fed Ex"), PMCC Leasing Corporation, as Owner Participant, State
Street Bank and Trust Company of Connecticut, National Association ("SSB")
(not in its individual capacity, except as otherwise expressly set forth
therein, but solely as Owner Trustee), First Security Bank, National
Association ("FSB") (not in its individual capacity, except as otherwise
expressly set forth therein, but solely as Indenture Trustee, Pass Through
Trustee and Subordination Agent); (ii) that certain Purchase Agreement
Assignment (Federal Express Corporation Trust No. N670FE), dated as of May
1, 1997 (the "Purchase Agreement Assignment") between Fed Ex, as Lessee and
SSB, as Lessor; (iii) that certain Lease Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997 (the "Lease")
between SSB (not in its individual capacity, but solely as Owner Trustee),
as Lessor and Fed Ex, as Lessee; (iv) that certain Trust Indenture and
Security Agreement (Federal Express Corporation Trust No. N670FE), dated
as of May 1, 1997 (the "Trust Indenture") between SSB (not in its
individual capacity), as Owner Trustee and FSB (not in its individual
capacity), as Indenture Trustee; and (v) that certain Trust Agreement
(Federal Express Corporation Trust No. N670FE), dated as of May 1, 1997
(the "Trust Agreement") between SSB (not in its individual capacity), as
Owner Trustee and PMCC Leasing Corporation, as Trustor.
I am an attorney employed by General Electric Company, a New York
corporation (the "Engine Manufacturer") and as such have acted as counsel
for the Engine Manufacturer in connection with the execution and delivery
by the Engine Manufacturer of the Consent (the "Consent"), and the Engine
Warranty Assignment (Federal Express Corporation Trust No. N670FE) (the
"Engine Warranty Assignment"), each attached to the Participation Agreement
as Exhibit F and dated as of May 1, 1997. The Consent and the Engine
Warranty Assignment covers two GE CF6-80C2-A5F series engines bearing
Engine Manufacturer's serial numbers ___-___ and ___-___, respectively. In
this connection, I have, or an attorney under my supervision has, reviewed
such documents as I have deemed necessary for the purpose of this opinion,
including, but without limiting the generality of the foregoing, the
General Terms Agreement No. 6-9034, dated as of July 3, 1991 between the
Engine Manufacturer and Fed Ex (the "General Terms Agreement"), the Engine
Product Support Plan forming a part thereof (the "Engine Product Support
Plan"), the Participation Agreement, the Purchase Agreement Assignment, the
Lease, the Trust Indenture and the Trust Agreement.
In making such examinations, I have relied upon the accuracy of
original, certified, conformed, photocopied or telecopied copies of such
records, agreements, certificates and other documents as I have deemed
necessary or appropriate to enable me to render the opinions expressed
herein. In all such examinations, I have assumed the genuineness of
signatures on original documents and the conformity to such original
documents of all copies submitted to me as certified, conformed,
photocopied or telecopied copies, and as to certificates and telegraphic
and telephonic confirmations given by public officials, I have assumed the
same to have been properly given and to be accurate. As to various
questions of fact material to such opinions, I have relied, when such
relevant facts were not independently established by me, solely upon the
accuracy of the statements, representations and warranties made in the
Participation Agreement, the Purchase Agreement Assignment, the Lease, the
Trust Indenture and the Trust Agreement.
With your consent, and for the purposes of this opinion, I have
assumed (other than with respect to the Engine Manufacturer), the accuracy of
the following matters, but I have not made any independent investigation or
inquiry with respect thereto and I render no opinion on such matters:
(a) each of the Participation Agreement, the Purchase
Agreement Assignment, the Lease, the Trust Indenture, and the Trust
Agreement have been duly and validly authorized, executed and
delivered by all parties thereto and constitutes the legal, valid and
binding obligations of each of such parties in accordance with the
respective terms thereof; and
(b) the respective parties to the Participation Agreement,
the Purchase Agreement Assignment, the Lease, the Trust Indenture,
and the Trust Agreement have obtained, and there are in full force
and effect, any and all federal, state, local or foreign
governmental agencies and authorities in connection with the
transactions contemplated thereby, to the extent necessary for the
legality, validity and binding effect or enforceability of the
Consent and the Engine Warranty Assignment.
Based upon the foregoing, and subject to the specific assumptions,
qualifications and reliances herein set forth, and on the basis of my
consideration of such facts and law as I have deemed necessary for purposes of
this letter, it is my opinion that:
(1) The Engine Manufacturer has the full corporate power,
authority and the legal right to enter into and perform its
obligations under the General Terms Agreement, the Consent and the
Engine Warranty Assignment. The execution, delivery and
performance by the Engine Manufacturer of each of the General
Terms Agreement, the Consent and the Engine Warranty Assignment
was duly authorized by all necessary corporate action on the part
of the Engine Manufacturer.
(2) Each of the General Terms Agreement, the Consent and
Engine Warranty Assignment has been duly authorized, executed and
delivered by and constitutes a legal, valid and binding obligation of
the Engine Manufacturer, enforceable against the Engine Manufacturer
in accordance with the respective terms thereof, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general equity principles.
(3) The Engine Product Support Plan insofar as it relates to
the Engine Warranties (as such term is defined in the Engine Warranty
Assignment), constitutes a legal, valid and binding obligation of the
Engine Manufacturer, enforceable against the Engine Manufacturer in
accordance with the terms thereof, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general equity principles.
The foregoing opinions are limited to the laws of the State
of New York and the federal laws of the United States of America, but no
opinion is expressed as to matters governed by the Transportation Code, or
by any other law, statute, rule or regulation of the United States relating
to the acquisition, ownership, registration, use, operation, maintenance,
repair, replacement or sale of aircraft. Further, no opinion is expressed
as to title to any engines or other property.
This opinion is furnished by me at your request for your
sole benefit and no other person or entity shall be entitled to rely on
this opinion without our express written consent. My opinion is limited to
the matters stated herein and no opinion is implied or may be inferred
beyond the matters expressly stated herein.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(8)
[Letterhead of ▇▇▇▇▇▇▇▇ Chance]
[Delivery Date]
To The Opinion Addressees referred to in Schedule A hereof
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
We are special French counsel for Airbus Industrie G.I.E.
("Airbus") and AVSA S.A.R.L. ("AVSA") and you have asked for our opinion
in connection with certain transactions contemplated in the Participation
Agreement (Federal Express Corporation Trust No. N670FE), dated as of May
1, 1997 (the "Participation Agreement") among Federal Express Corporation,
as Lessee ("Federal Express"), PMCC Leasing Corporation, as Owner
Participant ("Owner Participant"), State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee ("Owner Trustee"), First
Security Bank, National Association, not in its individual capacity, except
as otherwise stated, but solely as Indenture Trustee ("Indenture Trustee"),
Pass Through Trustee and Subordination Agent, and relating to the Aircraft
to be operated by Federal Express.
This opinion is being delivered pursuant to Section 4.02(m)(x)
of the Participation Agreement.
Capitalized terms used in this opinion and not otherwise
defined shall have the meaning assigned thereto in the Participation
Agreement.
We have examined:
(i) a copy of an Airbus A300-600R Freighter Purchase Agreement
dated as of July 3, 1991 and made between AVSA and Federal
Express with an executed Consent and Guaranty of Airbus of
same date attached thereto, sent to us by facsimile by
AINA Holdings Inc. ("AINA") on April 27, 1994;
(ii) a copy sent to us by facsimile by ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ on
_________________ of an executed Purchase Agreement
Assignment dated as of May 1, 1997 (the "Purchase
Agreement Assignment") made between Federal Express and
the Owner Trustee;
(iii) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie Consent and
Agreement to the Purchase Agreement Assignment;
(iv) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated AVSA Consent and Agreement to
the Purchase Agreement Assignment;
(v) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Warranty ▇▇▇▇ of Sale, relating
to the Aircraft and transferring title therein from AVSA
to the Owner Trustee ("AVSA Warranty ▇▇▇▇ of Sale");
(vi) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie G.I.E.
Warranty, in favour of the Participants (the "Airbus
Warranty") warranting AVSA's Warranty ▇▇▇▇ of Sale;
(vii) a copy sent to us by facsimile by AVSA on _________________
of an undated FAA ▇▇▇▇ of Sale executed by AVSA in favour
of the Owner Trustee;
(viii) a copy sent to us by facsimile by AVSA on May 3, 1995 of an
executed power of attorney dated September 1, 1994 appointing
Messrs. ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, acting singly, as
attorneys-in-fact of ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
("Administrateur Gerant") of Airbus;
(ix) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing ▇.▇ ▇▇▇▇▇▇▇ as attorney-in-fact of ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant") of
Airbus;
(x) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing Xavier de Rouville as attorney-in-fact of ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant")
of Airbus;
(xi) a copy sent to us by courier by AVSA on September 15, 1995 of
an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇▇▇ Lascaux and ▇▇. ▇▇▇▇▇▇▇ O. de
Coninck, acting singly, as attorneys-in-fact of ▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of
AVSA; and
(xii) a copy sent to us by courier by AVSA on September 15, 1995
of an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇▇▇
Lascaux, Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇,
acting singly, as attorneys-in-fact of ▇▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of AVSA.
(the documents referred to in paragraphs (i) to (xii) being referred to herein
as the "Documents").
Based on the foregoing, and such other documents, records
and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, and assuming the Documents to have been duly
executed by the parties thereto (other than Airbus and AVSA), the
genuineness of all signatures and the completeness and conformity to the
originals of all documents supplied to us as copies or as facsimiles, we
are of the opinion that, subject to the qualifications set out below:
1. Airbus is a groupement d'interet economique duly organized and
existing under the laws of the French Republic, and has the
power and authority to carry on its business as now conducted.
The present members of Airbus are (i) Aerospatiale, Societe
Nationale Industrielle, (ii) Daimler-Benz Aerospace Airbus
GmbH, (iii) British Aerospace (Operations) Ltd. and (iv)
Construcciones Aeronauticas S.A., and each of such corporations
is, without the need to proceed against any collateral security
for the indebtedness of Airbus or to take any other legal
action or process (except for service on Airbus by huissier of
notice to perform and subsequent failure by Airbus to do so),
jointly and severally liable with the other members for the
debts of Airbus arising out of obligations contracted by Airbus
while such corporation is a member of Airbus.
2. AVSA is a societe a responsabilite limitee duly established
and existing under the laws of the French Republic and has
the power and authority to carry on its business as now
conducted.
3. Each of Airbus and AVSA has full power and authority to enter
into and to execute, deliver and perform its obligations under
those of the Documents to which it is a party; such obligations
are legal, valid and binding upon them respectively, are
enforceable in accordance with their respective terms and rank
pari passu with the other unsecured obligations of Airbus or
AVSA, as the case may be.
4. All actions, authorizations, approvals, consents, conditions
and things required at law to be taken, fulfilled and done
to authorize the execution, delivery and performance by
Airbus and AVSA of those of the Documents to which they
respectively are party have been taken, obtained, fulfilled
and done; and no consents under any exchange control, laws,
rules or regulations of the French Republic are necessary in
connection therewith.
5. Neither the execution and delivery and performance of the
Documents to which Airbus and AVSA respectively are a party,
nor the consummation of the transactions contemplated
thereby, contravenes or violates any law, governmental rule
or regulation applicable to or binding on Airbus or AVSA.
6. The choice of the laws of the State of New York to govern the
Documents (which are expressed to be so governed) is valid
under the laws of the French Republic, and a French court
would uphold such choice of law in any suit on the Documents
brought in a French court.
7. Under the laws of the French Republic, Airbus and AVSA are
subject to private commercial law and to suit, and neither
Airbus nor AVSA, nor their respective properties have any
immunity from the jurisdiction of any court or any legal
process (whether through service of notice, attachment prior to
notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise), except that:
(a) to the extent that Airbus or AVSA occupies or possesses
any property by virtue of any license or grant from the
French State, such property and the title of Airbus or
AVSA thereto may be immune from suit or execution on the
grounds of sovereignty, and
(b) suit and execution against Airbus and AVSA or their
respective property may be affected by action taken by
the French public authorities in the interests of
national defence or on the occurrence of exceptional
circumstances of paramount importance to the national
interest of France, as such concept is understood
under the Constitution, laws and regulations of
France.
8. No French value added tax is due upon the transfer of title of
the Aircraft from AVSA to State Street Bank and Trust
Company of Connecticut, National Association as Owner
Trustee.
9. In connection with the obligations of Airbus and AVSA under the
Documents, this opinion must be read subject to the following
qualifications and observations as to French law:
(a) the remedy of specific performance may not be available
in a French court;
(b) the enforcement against Airbus of any of the Documents to
which it is a party may be limited by applicable
bankruptcy, insolvency, arrangement, moratorium or
similar laws relating to or affecting the enforcement of
creditors' rights generally, as such laws are applied to
Airbus. The enforcement against AVSA of any of the
Documents to which it is a party may be limited by such
laws, as such laws are applied to AVSA. The enforcement
against any member of Airbus of any obligation of Airbus
contained in the Documents may be limited by such laws,
as such laws are applied to such member;
(c) in respect of payment obligations, a French court has
power under Article 1244-1 of the French Civil Code to
grant time to a debtor (not in excess of two years),
taking into account the position of the debtor and the
needs of the creditor;
(d) in order to ensure the validity as against third parties
of the assignment made in the Purchase Agreement
Assignment, it is necessary that notice of such
assignment be served on Airbus and AVSA by "huissier" in
accordance with the provisions of Article 1690 of the
French Civil Code;
(e) in the event of any proceedings being brought in a
French court in respect of a monetary obligation
expressed to be payable in a currency other than
French Francs, a French court would probably give
judgment expressed as an order to pay, not such
currency, but its French Franc equivalent at the time
of payment or enforcement of judgment. With respect
to a bankruptcy, insolvency, liquidation, moratorium,
reorganization, reconstruction or similar proceedings,
French law may require that all claims or debts be
converted into French Francs at an exchange rate
determined by the court at a date related thereto,
such as the date of commencement of a winding-up;
(f) a determination or certificate as to any matter provided
for in the Documents might be held by a French court not
to be final, conclusive or binding, if such determination
or certificate could be shown to have an unreasonable,
incorrect or arbitrary basis or not to have been given or
made in good faith;
(g) claims may become barred by effluxion of time or may be
or become subject to defence of set-off or
counterclaim;
(h) provisions in any Document providing that it or any
other Documents may be amended or varied or any
provision thereof waived only by an instrument in
writing may not be effective;
(i) a French court may stay proceedings if concurrent
proceedings are being brought elsewhere;
(j) we express no opinion as to whether any provision in the
Documents conferring a right of set-off or similar
right would be effective against a liquidator or a
creditor; and
(k) our opinion as to the enforceability of the Documents
relates only to their enforceability in France in
circumstances where the competent French court has and
accepts jurisdiction. The term "enforceability" refers
to the legal character of the obligations assumed by the
parties under the documents, i.e., that they are of a
character which French law enforces or recognizes. It
does not mean that the Documents will be enforced in all
circumstances or in foreign jurisdictions or by or
against third parties or that any particular remedy will
be available.
(l) Article 899 of the French Tax Code provides that
agreements evidencing an undertaking to pay a sum of
money are subject to stamp tax ("droit de timbre") of a
nominal amount if made in the French Republic, if made in
a foreign country, such agreements are subject to a stamp
tax of a nominal amount before certain use thereof can be
made in the French Republic (Article 897 of the French
Tax Code). However non-payment of such stamp tax does
not affect the legality, validity or enforceability of
the agreements.
In rendering the foregoing opinions, we have assumed that the
Documents (expressed to be governed by New York law) constitute the legal,
valid and binding obligations of the parties under New York law.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the
laws of the French Republic as of the date hereof. This opinion is for
your use and that of no one else, and is limited to (i) the matters
specifically mentioned herein, and (ii) the purpose set out above.
Very truly yours,
▇▇▇▇▇▇▇▇ Chance
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(9)
[Letterhead of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To the Parties Named on Schedule A attached hereto
Re: Federal Express Corporation Trust No. N670FE
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.02(d)(iii) of the Participation Agreement (Federal Express Corporation
Trust No. N670FE), dated as of May 1, 1997 (the "Participation Agreement")
among Federal Express Corporation, as Lessee (the "Lessee"), PMCC Leasing
Corporation, as Owner Participant (the "Owner Participant"), State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as otherwise stated, but solely as Owner
Trustee ("Owner Trustee"), First Security Bank, National Association, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee ("Indenture Trustee"), Pass Through Trustee and
Subordination Agent, with respect to that portion of Subtitle VII of Title
49 of the United States Code relative to the recordation of instruments and
the registration of aircraft thereunder.
The capitalized terms herein shall, unless otherwise
defined, have the same meanings given them in the Participation Agreement
or in Annex I attached hereto.
We have examined and filed on this date with the Federal
Aviation Administration (the "FAA") the following described instruments at
the respective times listed below:
(a) AC Form 8050-2 Aircraft ▇▇▇▇ of Sale dated
_____________ (the "FAA ▇▇▇▇ of Sale") from AVSA, as
seller, conveying title to the Airframe to the Owner
Trustee, which FAA ▇▇▇▇ of Sale was filed at ____
_.m., C._.T.;
(b) AC Form 8050-1 Aircraft Registration Application dated
_____________ (the "Aircraft Registration
Application") by the Owner Trustee, as applicant,
covering the Airframe, which Aircraft Registration
Application was filed at ____ _.m., C._.T.;
(c) Affidavit of the Owner Trustee dated _____________ (the
"Owner Trustee Affidavit") pursuant to Section
47.7(c)(2)(ii) of Part 47 of the Federal Aviation
Regulations together with Affidavit of the Owner
Participant dated _____________ (the "Owner
Participant Affidavit") attached thereto, which Owner
Trustee Affidavit with the Owner Participant Affidavit
attached was filed at ____ _.m., C._.T.;
(d) executed counterpart of Trust Agreement (Federal Express
Corporation Trust No. N670FE) dated as of May 1, 1997
(the "Trust Agreement") between the Owner Participant
and the Owner Trustee, which Trust Agreement was filed
at ____ _.m., C._.T.;
(e) executed counterpart of Trust Indenture and Security
Agreement (Federal Express Corporation Trust No.
N670FE) dated as of May 1, 1997 (the "Trust
Indenture") between the Owner Trustee and the
Indenture Trustee, with executed counterpart of
Indenture and Security Agreement Supplement No. 1
(Federal Express Corporation Trust No. N670FE) dated
_____________ (the "Trust Indenture Supplement") by
the Owner Trustee, covering the Aircraft, attached
thereto, which Trust Indenture with the Trust
Indenture Supplement attached was filed at ____ _.m.,
C._.T.; and,
(f) executed counterpart of Lease Agreement (Federal Express
Corporation Trust No. N670FE) dated as of May 1, 1997
(the "Lease") between the Owner Trustee, as lessor,
and the Lessee, with executed counterparts of the
following attached thereto: (i) Lease Supplement No.
1 (Federal Express Corporation Trust No. N670FE)
dated _____________ (the "Lease Supplement") between
the Owner Trustee, as lessor, and the Lessee, covering
the Aircraft; (ii) the Trust Indenture; and (iii) the
Trust Indenture Supplement, which Lease with the
foregoing attachments (collectively, the "Lease
Attachments") attached was filed at ____ _.m., C._.T.
The Confidential Omissions were intentionally omitted from
the FAA filing counterparts of the Lease and the Trust Indenture as
containing confidential financial information.
Based upon our examination of the above described
instruments and of such records of the FAA as we deemed necessary to render
this opinion, it is our opinion that:
1. the FAA ▇▇▇▇ of Sale, the Trust Indenture with the Trust
Indenture Supplement attached and the Lease with the
Lease Attachments attached are in due form for
recordation by and have been duly filed for
recordation with the FAA pursuant to and in accordance
with the provisions of 49 U.S.C. Section 44107;
2. the Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement are in due form for
filing and have been duly filed with the FAA pursuant
to and in accordance with the provisions of 49 U.S.C.
Section 44103(a) and Section 47.7(c) of the Federal
Aviation Regulations;
3. the Airframe is eligible for registration under 49 U.S.C.
Section 44102 in the name of the Owner Trustee and the
filing with the FAA of the FAA ▇▇▇▇ of Sale, the
Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement will cause the FAA to
register the Airframe, in due course, in the name of
the Owner Trustee and to issue to the Owner Trustee an
AC Form 8050-3 Certificate of Aircraft Registration
for the Airframe, and the Airframe will be duly
registered pursuant to and in accordance with the
provisions of 49 U.S.C. Section 44103(a);
4. the Owner Trustee has valid legal title to the Airframe
and the Aircraft is free and clear of all Liens,
except (i) the security interest created by the Trust
Indenture, as supplemented by the Trust Indenture
Supplement, and (ii) the rights of the parties under
the Lease, as supplemented by the Lease Supplement;
5. the rights of the Owner Trustee and the Lessee under the
Lease, as supplemented by the Lease Supplement, with
respect to the Aircraft, are perfected;
6. the Trust Indenture, as supplemented by the Trust
Indenture Supplement, constitutes a duly perfected
first priority security interest in the Aircraft and a
duly perfected first assignment of all the right,
title and interest of the Owner Trustee in, to and
under the Lease and the Lease Supplement (insofar as
such assignment affects an interest covered by the
recording system established by the FAA pursuant to 49
U.S.C. Section 44107), and no other registration of
the Airframe or filings other than filings with the
FAA (which have been duly effected) are necessary in
order to perfect in any applicable jurisdiction in the
United States (A) the Owner Trustee's title to the
Airframe or (B) such security interest and assignment
(insofar as such assignment affects an interest
covered by the recording system established by the FAA
pursuant to 49 U.S.C. Section 44107), it being
understood that no opinion is herein expressed as to
the validity, priority or enforceability of such
security interest and assignment under local law or as
to the recognition of the perfection of such security
interest and assignment as against third parties in
any legal proceeding outside the United States;
7. no authorization, approval, consent, license or order of,
or registration with, or the giving of notice to, the
FAA is required for the valid authorization, delivery
and performance of the Lease, as supplemented by the
Lease Supplement, the Trust Indenture, as supplemented
by the Trust Indenture Supplement, or the Trust
Agreement except for such filings as are referred to
above; and,
8. neither the execution and delivery by the Owner
Participant of the Participation Agreement or the
Trust Agreement, nor other consummation of the
transactions contemplated thereby by the Owner
Participant, requires the consent or approval of, or
the giving of notice to, or the registration of, or
the taking of any other action in respect of the FAA,
except (x) the registration of the Airframe, including
the submission of the Aircraft Registration
Application, the Owner Trustee Affidavit, the Owner
Participant Affidavit and the Trust Agreement to the
FAA and (y) the filings for recordation specified
elsewhere in this opinion.
No opinion is expressed as to the Airframe during any period
or periods of time during which it has not been subject to United States
registration.
No opinion is expressed as to laws other than Federal laws
of the United States. In rendering this opinion, we were subject to the
accuracy of the FAA, its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the search for
encumbrance cross-reference index cards for the Engines. Further, in
rendering this opinion we are assuming the validity and enforceability of
the above described instruments under local law. Since our examination was
limited to records maintained by the FAA, our opinion does not cover liens
which are perfected without the filing of notice thereof with the FAA, such
as federal tax liens, liens arising under Section 1368(a) of Title 29 of
the United States Code, possessory artisan's liens, or matters of which the
parties had actual notice. In rendering this opinion we are assuming that
there are no documents with respect to the Aircraft which have been filed
for recording under the recording system of the FAA but have not yet been
listed in the available records of such system as having been so filed.
In rendering this opinion we have relied upon the opinion of
the Assistant Chief Counsel of the Aeronautical Center dated _____________,
a copy of which is attached hereto.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
For the Firm
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus Industrie A300F4-605R aircraft bearing
manufacturer's serial number 777 and U.S. Registration No. N670FE (the
"Airframe") and two (2) General Electric CF6-80C2-A5F aircraft engines
bearing manufacturer's serial numbers ___-___ and ___-___ (the "Engines")
(the Airframe and the Engines are referred to collectively as the
"Aircraft").
Confidential Omissions
The Lease was filed with the FAA, with (i) the Basic Rent
(Schedule II), (ii) the Stipulated Loss Values (Schedule III), (iii) the
Termination Values (Schedule IV) and (iv) the Purchase Option Schedule
(Schedule V) omitted from the FAA filing counterpart thereof as containing
confidential financial information; and (v) the purchase price under Section
4.02(a)(F) set forth in Ancillary Agreement II, which was not attached to the
FAA filing counterpart of the Lease or otherwise filed with the FAA for
recordation.
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.e]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.b.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.d]
EXHIBIT E
[FORM OF PURCHASE AGREEMENT ASSIGNMENT, AIRBUS CONSENT AND
AVSA CONSENT]
[See Exhibit B to Lease Agreement under Exhibit 4.e]
EXHIBIT F
[FORM OF ENGINE WARRANTY ASSIGNMENT AND ENGINE CONSENT]
[See Exhibit C to Lease Agreement under Exhibit 4.e]
EXHIBIT G-1
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
BENEFICIAL INTEREST TRANSFER AGREEMENT (this "Document"),
dated as of _______ __, ____, between ______________, a ______________
corporation ("Transferor") and ______________, a ______________ corporation
("Transferee").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to effect (a) the
transfer by Transferor to Transferee of all of the rights, title and interest
of Transferor in and to its interest (the "Beneficial Interest") under the
Trust Agreement (Federal Express Corporation Trust No. N670FE), dated as of
May 1, 1997 (as heretofore amended, the "Trust Agreement"), between Transferor
and State Street Bank and Trust Company of Connecticut, National Association,
and the Lessor's Estate created thereunder, and all of Transferor's rights and
obligations under the Participation Agreement (Federal Express Corporation
Trust No. N670FE), dated as of May 1, 1997 (the "Participation Agreement"),
among Federal Express Corporation, as Lessee, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity,
except as otherwise stated therein, but solely as Owner Trustee, PMCC Leasing
Corporation, as Owner Participant, First Security Bank, National Association,
not in its individual capacity, except as otherwise stated therein, but solely
as Indenture Trustee, First Security Bank, National Association, not in its
individual capacity, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent, and under the other Operative Agreements and (b) the
acceptance by Transferee of such transfer and the assumption by Transferee of
such obligations of Transferor thereunder; and
WHEREAS, Section 7.03(d) of the Participation Agreement
permits such transfer and assumption upon satisfaction of certain conditions
heretofore or concurrently herewith being observed;
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements herein contained, the parties hereto agree
as follows:
1. Definitions. Capitalized terms used herein without
definition shall have the respective meanings ascribed thereto in the
Participation Agreement.
2. Transfer. Transferor does hereby sell, convey,
assign, transfer and set over, unto Transferee, as of the Effective Time (as
defined below), all of Transferor's present and future right, title and
interest in and to (a) all of the Beneficial Interest and (b) all of the Owner
Participant's rights and obligations under the Participation Agreement, the
Tax Indemnity Agreement, the Trust Agreement and the other Operative
Agreements and any proceeds therefrom, together with all other documents and
instruments evidencing any of such right, title and interest, except such
rights of Transferor as have arisen or accrued to Transferor prior to the
Effective Time (including without limitation, the right to receive any amounts
due or accrued to Transferor under the Operative Agreements as of a time prior
to the Effective Time and the right to receive any indemnity payment pursuant
to the Participation Agreement or the Tax Indemnity Agreement, with respect to
events occurring prior to such time); all of the foregoing that is being
transferred under this paragraph 2, the "Transferred Interest".
3. Assumption. Transferee hereby accepts the transfer
of the Transferred Interest and, for the benefit of Transferor and the other
parties to the Participation Agreement, assumes and undertakes and agrees to
perform and discharge all of the duties and obligations of Transferor with
respect to the Transferred Interest whenever and wherever accrued (other than
duties and obligations of Transferor required to be performed by it on or
prior to the Effective Time). Transferee hereby confirms that, from and after
the Effective Time, Transferee (a) shall be deemed, to the extent set forth in
Section 2 hereof, the "Owner Participant" party to the Participation
Agreement, the Tax Indemnity Agreement, the Trust Agreement and the other
Operative Agreements and (b) shall be bound by all of the terms of the
Operative Agreements to the extent the same relate to the Transferred
Interest.
4. Release of Transferor. At the Effective Time,
Transferor shall be relieved of all of its duties and obligations with respect
to the Transferred Interest under the Operative Agreements, provided, however,
that Transferor shall in no event be released from any such duty or
obligations arising or relating to any event occurring prior to the Effective
Time, or on account of any breach by Transferor of any of its representations,
warranties, covenants or obligations set forth in the Operative Agreements, or
for any fraudulent or willful misconduct engaged in by it prior to the
Effective Time, or from any obligation that relates to any indemnity claimed
by Transferor or any Lessor's Lien attributable to Transferor.
5. Fees and Expenses. The fees, expenses and charges
of the parties to the Participation Agreement incurred in connection with the
transfer effected hereby shall be for the account of [specify
Transferor/Transferee].
6. Payments. Transferor hereby covenants and agrees
to pay over to Transferee, if and when received following the Effective
Time, any amounts (including any sums payable as interest in respect
thereof) paid on account of the Transferred Interest to or for the benefit
of Transferor, and Transferee hereby covenants and agrees to pay over to
Transferor, if and when received following the Effective Time, any amounts
(including any sums payable as interest in respect thereof) paid to or for
the benefit of Transferee that are not attributable to the Transferred
Interest and to which Transferor is otherwise entitled.
7. Investment Purpose. Transferee hereby represents
and warrants that, as of the date hereof, it is acquiring the Transferred
Interest for its account with no present intention of distributing such
Transferred Interest or any part thereof in any manner which would violate
the Securities Act of 1933, as amended, but without prejudice, however, to
the right of Transferee at all times to sell or otherwise dispose of all or
any part of such Transferred Interest in compliance with Section 7.03(d) of
the Participation Agreement.
8. Representations and Warranties of Transferor.
Transferor represents and warrants to Transferee that as of the Effective
Time:
(a) Organization and Power. Transferor is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions").
(b) Authorization, Execution and Validity. This Agreement
has been duly authorized, executed and delivered by Transferor and
constitutes the legal, valid and binding obligation of Transferor,
enforceable against it in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity.
(c) Conflict. The execution, delivery and performance by
Transferor of this Agreement and compliance by Transferor with all
of the provisions hereof do not contravene any regulation or any
order of any governmental authority applicable to or binding on
Transferor, or contravene the provisions, or constitute a default
by Transferor under, its certificate of incorporation or by-laws
or any indenture, mortgage, contract or other agreement or
instrument to which Transferor is a party or by which Transferor
or any of its Properties is bound or affected.
(d) Consents. No consent, approval or authorization of, or
filing, registration or qualification with, or the giving of
notice or the taking of any other action with respect to, any
governmental authority on the part of Transferor is required in
connection with the execution, delivery and performance by
Transferor of this Agreement.
(e) Litigation. There are no proceedings pending or, to
the knowledge of Transferor, threatened against Transferor before
any governmental authority that would materially and adversely
affect the ability of Transferor to consummate the Transactions.
(f) No Liens. The Trust Estate is free of Lessor's Liens
attributable to Transferor.
(g) Compliance with Operative Agreements. Transferor has
fully performed all of its obligations under the Participation
Agreement and under each other Operative Agreement which
obligations by their terms are required to be satisfied or
performed prior to the Effective Time or prior to the consummation
of the Transactions.
(h) Default. As a result of the transfer effected hereby,
no Indenture Default attributable to the Owner Participant or the
Owner Trustee has occurred and is continuing.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft.
9. Representations and Warranties of Transferee.
Transferee represents and warrants to Transferor and to the other parties
to the Participation Agreement that as of the Effective Time:
(a) Transferee is a corporation duly organized, validly
existing and in good standing under the laws of the State of [ ],
has the full corporate power, authority and legal right to carry
on its business as now conducted, and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions");
(b) Transferee has full corporate power, authority and
legal right to execute, deliver and enter into this Agreement and
the other Operative Agreements and full corporate power and
authority to perform its obligations thereunder, and such
execution, delivery and performance do not and will not contravene
any applicable law or any order of any governmental authority
applicable to or binding on the Transferee, or contravene the
provisions of, or constitute a default under, or result in the
creation of any Lien upon the property of the Transferee under,
its articles of incorporation or by-laws or any material
indenture, mortgage, contract or other agreement or instrument to
which the Transferee is a party or by which it or any of its
property may be bound or affected;
(c) the execution, delivery and performance of this
Agreement by the Transferee (i) has been duly authorized by all
necessary corporate action and (ii) does not require any approval
of the shareholders of the Transferee or any approval or consent
of, or notice to, any trustee or holders of any indebtedness or
obligation of the Transferee, except for such approvals and
consents as have already been obtained;
(d) this Agreement has been duly executed and delivered by
the Transferee, and constitutes the legal, valid and binding
obligation of the Transferee, enforceable against the Transferee
in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity;
(e) there are no proceedings or actions pending or, to the
knowledge of the Transferee, threatened against the Transferee
before any governmental authority in which there is a reasonable
probability of an adverse determination that individually or in
the aggregate would materially and adversely impair the ability of
the Transferee to perform its obligations under this Agreement or
the Operative Agreements, or which involve the Transactions or
question the validity of any Operative Agreement to which the
Owner Participant is a party or any action taken or to be taken
pursuant thereto; and the Transferee is not in default with
respect to any order of any governmental authority which involves
the Transactions or the default under which would materially and
adversely affect the ability of the Transferee to perform its
obligations under this Agreement or any of the Operative
Agreements;
(f) no consent, approval, order or authorization of, giving
of notice to, or registration with, or taking of any other action
in respect of, any governmental authority is required under any
law for the execution and delivery by the Transferee of this
Agreement, or the carrying out by the Transferee of any of the
Transactions, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly
obtained, given or taken;
(g) the Lessor's Estate is free of any Lessor's Liens
attributable to the Transferee;
(h) the Transferee, upon execution of this Agreement, will
not be in default under any of the Operative Agreements;
(i) no part of the funds to be used by it to acquire the
interests acquired by the Owner Participant under the
Participation Agreement constitutes assets (within the meaning of
ERISA and any applicable rules and regulations) of any employee
benefit plan subject to Title I of ERISA or of any plan or
individual retirement account subject to Section 4975 of the Code;
(j) Transferee is a "U.S. Person" as defined in Section
7701(a)(30) of the Code and is not a tax resident of another
country and if it shall at any time cease to be such a "U.S.
Person" or shall become a tax resident of another country, it
shall furnish to the Agent and each Certificate Holder an
indemnity, in form and substance reasonably satisfactory to such
Certificate Holder, for any Taxes that may be imposed on such
Holder as a result of its failure to be such a "U.S. Person" or
as a result of its being a tax resident of another country, and it
shall be personally liable for any debt service to the extent that
the receipt of rentals is reduced by reason of any withholding
Taxes that result from such failure to be such a "U.S. Person" or
from being a tax resident of another country;
(k) [After giving effect to a voting trust or similar
agreement(*), Transferee is a Citizen of the United States]
[applicable if Aircraft is registered in the United States or is
proposed to be so registered]
------------
(*) Such voting trust or similar agreement must be reasonably satisfactory
to the Lessor and the Indenture Trustee.
(l) On and as of the Effective Date, the representations
and warranties of the Owner Participant in Article 7 of the
Participation Agreement are true and correct as to the Transferee;
and
(m) Transferee satisfies the conditions applicable to a
transferee of the Beneficial Interest set forth in Section 7.03(d)
of the Participation Agreement, including without limitation, the
condition set forth in the last sentence thereof [and to the
extent the same has been requested by the Lessee or the Indenture
Trustee, Transferee has heretofore provided to the Lessee and the
Indenture Trustee its most recent audited financial statements,
which show a consolidated tangible net worth or combined capital
and surplus of at least $75,000,000] [remove bracketed language if
an Owner Participant Guaranty is provided].
(n) the Transferee has, independently and without reliance
upon any other party (including without limitation the Transferor)
and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement, and the Transferee has established adequate
means of obtaining from Lessee on a continuing basis information
pertaining to, and is now and on a continuing basis will be
completely familiar with, the financial condition, operations,
properties and prospects of Lessee.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft, other than such laws, rules or regulations
relating to the citizenship requirements of it under applicable aviation
law.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 11.
Effectiveness. This Agreement shall be effective upon the mutual execution
and delivery of this Agreement (the "Effective Time").
12. Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by
both parties so long as each party shall sign at least one counterpart.
13. Beneficiaries. Each of the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Lessee, together with
their respective successors and permitted assigns, is and shall be deemed a
third party beneficiary of this Agreement entitled to enforce this
Agreement directly and in its own name and enforce any rights or claims of
the parties hereto.
14. Further Assurances. Each party agrees that from
time to time after the Effective Time, it shall execute and deliver or
cause to be executed and delivered such instruments, documents and papers,
and take all such further action as may be reasonably required in order to
consummate fully the purposes of this Agreement and to implement the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
[TRANSFEROR]
By:___________________________
Name:
Title:
[TRANSFEREE]
By:___________________________
Name:
Title:
EXHIBIT G-2
FORM OF OWNER PARTICIPANT GUARANTY
TRANSFEREE'S PARENT GUARANTY, dated as of ___________
__, ____, (this "Guaranty") by ____________________, a ___________
corporation (the "Guarantor"), to State Street Bank and Trust Company of
Connecticut, National Association, in its individual capacity and as Owner
Trustee, First Security Bank, National Association, as Indenture Trustee
and Pass Through Trustee, and Federal Express Corporation, as Lessee
(collectively, together with their successors and assigns and the holders
from time to time of the Certificates, the "Beneficiaries").
W I T N E S S E T H :
WHEREAS, ___________, a ____________ corporation (the
"Transferor"), is party to the Participation Agreement (Federal Express
Corporation Trust No. N670FE), dated as of May 1, 1997 (as amended,
modified or supplemented from time to time, the "Participation Agreement"),
among Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual, except as otherwise stated
therein, but solely as Owner Trustee, First Security Bank, National
Association, not in its individual, except as otherwise stated therein, but
solely as Indenture Trustee, First Security Bank, National Association, not
in its individual, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent; and
WHEREAS, the Transferor wishes to transfer, among
other things, all of the rights, title and interest of the Transferor in
and to the Beneficial Interest under the Trust Agreement and the Lessor's
Estate created thereunder, and all of the Transferor's rights and
obligations under the Participation Agreement, the Trust Agreement and the
other Operative Agreements to __________________, a _______________
[corporation] (together with its successors and assigns, the "Transferee"),
a subsidiary of the Guarantor, pursuant to the Beneficial Interest Transfer
Agreement, dated as of the date hereof (the "Transfer Agreement"), between
the Transferor and the Transferee; and
WHEREAS, the terms of the Participation Agreement
provide that the aforementioned transfer is conditioned upon the execution
and delivery of this Guaranty by the Guarantor;
NOW, THEREFORE, in order that the Transferor may make
the aforementioned transfer to the Transferee, the Guarantor hereby agrees
with and for the benefit of the Beneficiaries as follows:
1. Definitions. Capitalized terms used herein
without definition shall have the respective meanings assigned thereto in
the Participation Agreement or the Transfer Agreement.
2. Guaranty. The Guarantor hereby unconditionally
and irrevocably guarantees, as primary obligor and not merely surety, to
the Beneficiaries the prompt and complete payment by the Transferee when
due of all payment obligations of the Transferee under the Operative
Agreements without offset or deduction and the timely performance of all
other obligations of the Transferee thereunder (such payment and other
obligations, the "Obligations"), and the Guarantor further agrees to pay
any and all expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be paid or incurred by the Beneficiaries in
enforcing any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting
against, the Guarantor under this Guaranty.
The Guarantor will not exercise any rights that it may
now or hereafter acquire against Transferee that arise from the existence,
payment, performance or enforcement of the Guarantor's Obligations under
this Guaranty, the Transferred Interest or the Operative Agreements,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate
in any claim or remedy of any Beneficiary against Transferee or any
collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the
right to take or receive from Transferee, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security
on account of such claim, remedy or right, unless and until all of the
Obligations have been performed in full and all other amounts payable under
this Guaranty shall have been paid in full in cash. If any amount shall be
paid to the Guarantor in violation of the preceding sentence at any time
prior to the final payment in full in cash of the Obligations and all other
amounts payable under this Guaranty, such amount shall be held in trust for
the benefit of any Beneficiary and shall forthwith be paid to such
Beneficiary to be credited and applied to the Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Operative Agreements, or to be held as
collateral for any Obligations or other amounts payable under this Guaranty
thereafter arising.
3. No Subrogation. Notwithstanding anything to the
contrary in this Guaranty, the Guarantor hereby agrees not to assert any
rights which may have arisen in connection with this Guaranty to be
subrogated to any of the rights (whether contractual, under the Bankruptcy
Code, under common law or otherwise) of any Beneficiary against the
Transferee for the payment of the Obligations until all of the Obligations
shall have been satisfied by payment and performance in full.
4. Amendments with Respect to the Obligations;
Waiver of Rights. The Guarantor shall remain fully obligated hereunder
notwithstanding that, without any reservation of rights against the
Guarantor and without notice to or further assent by the Guarantor, any
demand for payment or performance of any of the Obligations made by any
Beneficiary may be rescinded by such party and any of the obligations
continued, and the Obligations, may, from time to time, in whole or part,
be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Beneficiary and any Operative Agreement may
be amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions thereof from time to time. When making any
demand hereunder against the Guarantor, a Beneficiary may, but shall be
under no obligation to, make a similar demand on the Transferee, and any
failure by a Beneficiary to make any such demand or to collect any payments
from the Transferee or any release of the Transferee shall not relieve the
Guarantor of its obligations or liabilities hereunder, and shall not impair
or affect the rights and remedies, express or implied, or as a matter of
law, of any Beneficiary against the Guarantor. For the purposes hereof,
"demand" shall include the commencement and continuance of any legal
proceedings. The Guarantor represents and warrants that it is the parent
of the Transferee, and agrees that its obligations hereunder shall continue
unimpaired, even if the Guarantor is no longer an Affiliate of the
Transferee.
5. Guaranty Absolute and Unconditional. The
Guarantor guarantees that the Obligations will be paid and performed
strictly in accordance with the terms of the Transfer Agreement and the
Operative Agreements, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any such terms or the
rights of any Beneficiary with respect thereto. The obligations of the
Guarantor under this Guaranty are independent of the Obligations or any
other obligations of any other party, and a separate action or actions may
be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether the Transferee or any other party is joined in any
such action or actions. The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by any Beneficiary upon this Guaranty or
acceptance of this Guaranty; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guaranty; and
all dealings between the Transferee or the Guarantor and any Beneficiary
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantor waives, to the fullest extent
permitted by applicable law, diligence, presentment, promptness, protest,
mitigation of damages by the Beneficiaries demand for payment and notice of
default or nonpayment to or upon the Transferee or the Guarantor with
respect to the Obligations. The Guarantor further waives any right to
revoke this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Obligations, whether existing now or in the
future. The Guarantor understands and agrees that, to the fullest extent
permitted by applicable law, this Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment and performance
(and not merely of collectibility) without regard to:
(a) the validity, regularity or enforceability of the
Transfer Agreement, any Operative Agreement, or any of the
Obligations at any time or from time to time held by any
Beneficiary;
(b) any defense, set-off, rebate, adjustment, withholding,
deduction or counterclaim (other than a defense of payment or
performance) that may at any time be available to or be asserted
by the Transferee against any Beneficiary or any agreement or
instrument relating thereto or;
(c) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations or any
other obligations of any other party under the Transfer Agreement,
the Operative Agreements, or any other amendment or waiver of or
any consent to departure from the Transfer Agreement or other
Operative Agreements;
(d) any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Obligations;
(e) any change, restructuring or termination of the
corporate structure or existence of the Guarantor or the
Transferee or any of the Affiliates of either;
(f) any defect in the title, condition, design, operation or
fitness of, or any interference with the operation, use or
possession of, the Aircraft;
(g) any failure to establish, perfect or preserve title to
or any security interest in or to the Aircraft or any other
collateral security for the Obligations; or
(h) any other circumstance whatsoever or any existence of or
reliance on any representation by any Beneficiary that might
otherwise constitute a defense available to, or a discharge of,
the Guarantor or any other guarantor or surety.
When pursuing its rights and remedies hereunder against the
Guarantor, any Beneficiary may, but shall be under no obligation to, pursue
such rights and remedies as it may have against the Transferee for the
Obligations, and any failure by any Beneficiary to pursue such other rights
or remedies or to collect any payments from the Transferee, or any release
of the Transferee, shall not, to the fullest extent permitted by applicable
law, relieve the Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as
a matter of law, of any Beneficiary against the Guarantor. This Guaranty
is a continuing guaranty and shall remain in full force and effect until
the earlier of (x) the date that all of the Obligations are satisfied by
payment and performance in full and (y) the date that all right, title and
interest of the Transferee shall have been transferred to a Person meeting
the requirements of Section 7.03(d) of the Participation Agreement in
accordance with said section; provided that this Guaranty shall remain in
full force and effect with respect to obligations relating to the period
prior to such transfer.
6. Reinstatement. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by any Beneficiary upon the insolvency, bankruptcy
dissolution, liquidation or reorganization of the Transferee or the
Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the
Transferee or the Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made and the Guarantor
agrees that it will indemnify any such Beneficiary on demand for all
reasonable costs and expenses (including, without limitation, reasonable
fees and expenses of counsel) by such Beneficiary in connection with such
rescission or restoration.
7. Payments. The Guarantor hereby guarantees that
payments hereunder shall be paid without set-off, counterclaim, deduction,
rebate, adjustment or withholding, and shall be made in U.S. Dollars in
immediately available funds.
8. Representations and Warranties. The Guarantor
hereby represents and warrants that:
(a) the Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and the Transferee is currently a subsidiary
of the Guarantor;
(b) the Guarantor has the power and authority and the legal
right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action
to authorize its execution, delivery and performance of this
Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally;
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or
contractual obligation of the Guarantor or any of its constitutive
documents;
(e) no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or governmental authority
and no consent of any other person is required in connection with
the execution, delivery, performance, validity or enforceability
of this Guaranty;
(f) the Guarantor is a [a bank, savings institution, finance
company, leasing company or trust company, national banking
association acting for its own account or in a fiduciary capacity
as trustee or agent under any pension, retirement, profit sharing
or similar trust or fund, insurance company, fraternal benefit
society or corporation acting for its own account having a
combined capital and surplus (or, if applicable, consolidated
tangible net worth or its equivalent)] of not less than
$75,000,000 [and has, if the same have been requested by the
Lessee or the Indenture Trustee, heretofore furnished to the
Lessee and the Indenture Trustee copies of its most recent audited
financial statements];
(g) there are no conditions precedent to the effectiveness
of this Guaranty that have not been satisfied or waived; and
(h) the Guarantor has, independently and without reliance
upon any Beneficiary and based on such documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty, and the Guarantor has
established adequate means of obtaining from Transferee on a
continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the financial
condition, operations, properties and prospects of Transferee.
9. Severability. Any provision of this Guaranty that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
10. Jurisdiction; Waiver of Jury Trial, Etc.
(a) The Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United
States of America sitting in New York, New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Guaranty, the Transfer Agreement or any Operative Agreement to which
it is or is to be a party, or for recognition or enforcement of any
judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted
by law, in such federal court. The Guarantor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Guaranty shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Guaranty,
the Transfer Agreement or any Operative Agreement to which it is or is to
be a party in the courts of any jurisdiction.
(b) The Guarantor irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Guaranty, the
Transfer Agreement or any Operative Agreement to which it is or is to be a
party in any New York State or federal court. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in
any such court.
11. Section Headings. The Section headings used in
this Guaranty are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the
interpretation hereof.
12. No Waiver; Cumulative Remedies. No Beneficiary
shall by any act (except by a written instrument pursuant to Section 13
hereof), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Beneficiary, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right power or
privilege. A waiver by a Beneficiary of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy
that such Beneficiary would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by
law.
13. Amendments and Waivers. None of the terms or
provisions of this Guaranty may be waived, amended or supplemented or
otherwise modified except by a written instrument executed by the Guarantor
and each Beneficiary.
14. Successors and Assigns. This Guaranty shall be
binding upon the successors and assigns of the Guarantor and shall inure to
the benefit of the Beneficiaries and their respective successors and
permitted assigns but Guarantor may not assign this Guaranty without prior
written consent of the Beneficiaries except to an assignee making, as of
the date of such assignment, (i) representations and warranties
substantially similar to those contained in Section 8 hereof and (ii) a
representation that it is a U.S. citizen, unless, in the case of the
preceding clause (ii) any of (a) the aircraft is not then registered in the
United States nor contemplated to be so registered or (b) a voting trust or
similar arrangement reasonably satisfactory to the Beneficiaries is in
place with respect to such registration or (c) it is not necessary for the
Guarantor to be a U.S. citizen in order for the aircraft to remain
registered in the United States.
15. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED
BY AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK.
16. Notices. All notices, requests and demands to or
upon the Guarantor or any Beneficiary to be effective shall be in writing
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made, when delivered by hand or by mail, upon receipt,
or, when delivered by facsimile transmission, upon being sent and
confirmed, addressed (a) in the case of the Guarantor, to the Guarantor at
its office at [_________________________________], and (b) in the case of
any Beneficiary, to such Beneficiary at the address provided for such
Beneficiary in or pursuant to the Participation Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to
be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
[NAME OF GUARANTOR]
_________________________________
Name:
Title:
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N671FE)
Dated as of May 1, 1997
among
FEDERAL EXPRESS CORPORATION,
Lessee
PMCC LEASING CORPORATION,
Owner Participant
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as Owner Trustee,
Owner Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Indenture Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Pass Through Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Subordination Agent
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 778, REGISTRATION NO. N671FE
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
DEFINITIONS............................................................. 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds........................................ 4
Section 2.02. Certificates............................................. 5
Section 2.03. Owner Participant's Instructions to Owner Trustee........ 5
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent, Stipulated
Loss Values and Termination Values....................... 5
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date......................... 6
Section 3.02. Commitments to Participate in Purchase Price............. 6
Section 3.03. Owner Participant's Instructions to Owner Trustee........ 9
Section 3.04. Transaction Costs........................................ 9
Section 3.05. Postponement of Delivery Date............................ 9
Section 3.06. Closing.................................................. 11
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).......... 11
Section 4.02. Conditions Precedent (Delivery Date)..................... 20
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.... 28
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 28
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 29
Section 6.02. Offering by Lessee....................................... 35
Section 6.03. Certain Covenants of Lessee.............................. 35
Section 6.04. Survival of Representations and Warranties............... 43
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate................................................... 43
Section 7.02. Citizenship.............................................. 44
Section 7.03. Representations, Warranties and Covenants of Owner
Participant.............................................. 45
Section 7.04. Representations, Covenants and Warranties of SSB and the
Owner Trustee............................................ 50
Section 7.05. Representations, Warranties and Covenants of the Indenture
Trustee.................................................. 52
Section 7.06. Indenture Trustee's Notice of Default.................... 54
Section 7.07. Releases from Indenture.................................. 54
Section 7.08. Covenant of Quiet Enjoyment.............................. 54
Section 7.09. Pass Through Trustee's Representations and Warranties.... 54
Section 7.10. Survival of Representations, Warranties and Covenants.... 55
Section 7.11. Lessee's Assumption of the Certificates.................. 55
Section 7.12. Indebtedness of Owner Trustee............................ 57
Section 7.13. Compliance with Trust Agreement, Etc..................... 58
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants................................................ 58
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 60
Section 8.02. After-Tax Basis.......................................... 65
Section 8.03. Time of Payment.......................................... 66
Section 8.04. Contests................................................. 66
Section 8.05. Refunds.................................................. 69
Section 8.06. Lessee's Reports......................................... 69
Section 8.07. Survival of Obligations.................................. 70
Section 8.08. Payment of Taxes......................................... 70
Section 8.09. Reimbursements by Indemnitees Generally.................. 70
Section 8.10. Special Indemnity........................................ 70
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 71
Section 9.02. After-Tax Basis.......................................... 74
Section 9.03. Subrogation.............................................. 75
Section 9.04. Notice and Payment....................................... 75
Section 9.05. Refunds.................................................. 75
Section 9.06. Defense of Claims........................................ 76
Section 9.07. Survival of Obligations.................................. 77
Section 9.08. Effect of Other Indemnities.............................. 77
Section 9.09. Interest................................................. 77
Section 9.10. Special Indemnity........................................ 78
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 78
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 80
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 82
Section 12.02. Interest of Holders of Certificates..................... 82
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 82
Section 13.02. Further Assurances...................................... 83
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment.......................................... 83
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 83
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 84
Section 15.02. Reoptimization.......................................... 88
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 89
Section 17.02. Collateral Account...................................... 89
Section 17.03. Counterparts............................................ 90
Section 17.04. No Oral Modifications................................... 90
Section 17.05. Captions................................................ 91
Section 17.06. Successors and Assigns.................................. 91
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and the
Pass Through Trustee.................................... 91
Section 17.08. Severability............................................ 92
Section 17.09. Public Release of Information........................... 92
Section 17.10. Certain Limitations on Reorganization................... 92
Section 17.11. GOVERNING LAW........................................... 93
Section 17.12. Section 1110 Compliance................................. 93
Section 17.13. Reliance of Liquidity Providers......................... 93
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 93
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Debt Portion
EXHIBIT A(1)(a)(i) Opinion of Lessee's Counsel
(Certificate Closing Date)
EXHIBIT A(1)(a)(ii) Opinion of Lessee's Counsel
(Delivery Date)
EXHIBIT A(1)(b)(i) Opinion of Lessee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(1)(b)(ii) Opinion of Lessee's Special Counsel
(Delivery Date)
EXHIBIT A(2)(a) Opinion of Owner Participant's and Owner Participant
Guarantor's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's and Owner Participant
Guarantor's Counsel
EXHIBIT A(3) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(4)(a)(i) Opinion of Owner Trustee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(4)(a)(ii) Opinion of Owner Trustee's Special Counsel
(Delivery Date)
EXHIBIT A(5) Opinion of Pass Through Trustee's and Subordination
Agent's Special Counsel
EXHIBIT A(6)(a) Opinion of Liquidity Provider's Counsel
EXHIBIT A(6)(b) Opinion of Liquidity Provider's Special Counsel
EXHIBIT A(7) Opinion of Engine Manufacturer's Counsel
EXHIBIT A(8) Opinion of Manufacturer's and AVSA's Counsel
EXHIBIT A(9) Opinion of Special Aviation Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Purchase Agreement Assignment, Consent and
Agreement, AVSA Consent and Agreement
EXHIBIT F Form of Engine Warranty Assignment and Engine Consent
EXHIBIT G-1 Form of Assignment and Assumption Agreement
EXHIBIT G-2 Form of Owner Participant Guaranty
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N671FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N671FE) dated as of May 1, 1997 (this "Agreement") among FEDERAL EXPRESS
CORPORATION, a Delaware corporation (herein, together with its successors and
permitted assigns, the "Lessee"), PMCC LEASING CORPORATION, a Delaware
corporation (herein, together with its successors and permitted assigns, the
"Owner Participant"), STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as owner
trustee under the Trust Agreement referred to below (in such capacity as
trustee, together with its successors and permitted assigns, the "Owner
Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as otherwise expressly
stated herein, but solely as indenture trustee under the Indenture referred to
below (in such capacity as trustee, together with its successors and permitted
assigns, the "Indenture Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity, except as
otherwise expressly stated herein, but solely as pass through trustee of three
separate Pass Through Trusts (in such capacity as trustee, together with its
successors and permitted assigns, the "Pass Through Trustee"), and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but solely as
subordination agent (in such capacity as trustee, together with its successors
and permitted assigns, the "Subordination Agent").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article 1 hereof.
WHEREAS, the Owner Participant has entered into the Trust Agreement
with the Owner Trustee in its individual capacity, substantially in the form
of Exhibit D hereto, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Lessor's Estate for the benefit of the
Owner Participant on the terms specified in the Trust Agreement, subject to
the Lien of the Indenture.
WHEREAS, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of Pass Through Certificates issued by
each Pass Through Trust, an allocable amount of the proceeds of which
offering will be used by the Pass Through Trustee to purchase for each such
Pass Through Trust the Certificates of the Series and Maturity applicable
thereto.
WHEREAS, on the Certificate Closing Date, the Owner Trustee and the
Indenture Trustee will enter into the Indenture for the benefit of the Pass
Through Trustee, pursuant to which the Owner Trustee is issuing the
Certificates to the Subordination Agent on behalf of the Pass Through Trustee
as evidence of the loans made by the Pass Through Trustee to the Owner
Trustee, the proceeds of which loans will be deposited by the Indenture
Trustee on behalf of the Owner Trustee in the Collateral Account.
WHEREAS, concurrently with the execution and delivery hereof, (i)
Kredietbank N.V., acting through its New York Branch will enter into two
revolving credit agreements (each, a "Liquidity Facility"), one for the
benefit of the holders of Pass Through Certificates of each of the Pass
Through Trusts for the Series A Certificates and the Series B Certificates,
with the Subordination Agent, as agent for the Pass Through Trustee on behalf
of each such Pass Through Trust; and (ii) the Pass Through Trustee, each
Liquidity Provider and the Subordination Agent will enter into the
Intercreditor Agreement.
WHEREAS, the Certificates will be held by the Subordination Agent
pursuant to the Intercreditor Agreement on behalf of the Pass Through Trustee
for each of the Pass Through Trusts.
WHEREAS, prior to the Delivery Date, the Certificates will be secured
by the Liquid Collateral.
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee will be authorized and directed by the Owner Participant:
(a) on the Delivery Date, to purchase the Aircraft from AVSA;
(b) on the Certificate Closing Date, to execute and deliver the
Lease substantially in the form of Exhibit B hereto, pursuant to which,
subject to the terms and conditions set forth in said Lease, the Owner
Trustee agrees to lease to the Lessee, and the Lessee agrees to lease from
the Owner Trustee, the Aircraft on the Delivery Date, such lease to be
effected by the execution and delivery on the Delivery Date of a Lease
Supplement, in the form of Exhibit A to the Lease, covering the Aircraft
and incorporating by reference all of the terms of the Lease;
(c) on the Certificate Closing Date, to execute and deliver the
Indenture, substantially in the form of Exhibit C hereto, for the benefit
of the Holders from time to time of the Certificates, pursuant to which the
Owner Trustee agrees, among other things, (A) to deposit, mortgage and
pledge with the Indenture Trustee, as part of the Trust Indenture Estate,
all of the Lessor's Estate but not Excepted Payments, (B) on the
Certificate Closing Date, to issue Certificates substantially in the form
set forth in Exhibit B to the Indenture, the proceeds of the sale of which
will be held by the Indenture Trustee on behalf of the Owner Trustee in
the Collateral Account until released in accordance with the terms
hereof and of the Indenture, and (C) on the Delivery Date, to execute
and deliver the Indenture and Security Agreement Supplement,
substantially in the form of Exhibit A to the Indenture, covering the
Aircraft and supplementing the Indenture;
(d) on the Certificate Closing Date, to execute and deliver the
Purchase Agreement Assignment, whereby the Lessee assigns to the Owner
Trustee the right to purchase the Aircraft from AVSA and certain of the
Lessee's rights and interests under the Purchase Agreement and the Consent
and Guaranty to the extent that the same relate to the Aircraft (except to
the extent reserved in said Purchase Agreement Assignment), which Purchase
Agreement Assignment is to include as an annex a Consent and Agreement
executed by the Manufacturer and the AVSA Consent and Agreement executed by
AVSA, said Purchase Agreement Assignment, Consent and Agreement and AVSA
Consent and Agreement to be substantially in the form of Exhibit E hereto;
and
(e) on the Certificate Closing Date, to execute and deliver the
Engine Warranty Assignment, whereby the Lessee assigns to the Owner Trustee
certain of the Lessee's rights and interests under the GTA to the extent
that the same relate to the Engines (except to the extent reserved in the
Engine Warranty Assignment), which Engine Warranty Assignment is to include
as an annex an Engine Consent executed by the Engine Manufacturer, said
Engine Warranty Assignment and Engine Consent to be substantially in the
form of Exhibit F hereto.
WHEREAS, on the Delivery Date pursuant to and subject to the terms
and conditions of this Agreement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇
of Sale and the Airbus Guaranty, the Owner Trustee will purchase, and
receive title to, the Aircraft from AVSA and lease the Aircraft to the
Lessee pursuant to the Lease.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth in Schedule II hereto are incorporated herein for all purposes of this
Agreement and shall be equally applicable to both the singular and the plural
forms of the terms so defined.
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement, shall
enter into the Series Supplements, and, subject to the terms and conditions
set forth therein, on the Pass Through Closing Date (i) the Lessee shall
direct the Underwriters to execute a wire transfer or intra-bank transfer to
the Pass Through Trustee in the amount of the total proceeds payable pursuant
to the Underwriting Agreement with respect to the Pass Through Certificates
and (ii) the Pass Through Trustee shall deliver the Pass Through Certificates
to the Underwriters upon receipt by the Pass Through Trustee of such proceeds.
(b) Subject to the satisfaction or waiver of the conditions set
forth herein, on the Certificate Closing Date, on behalf of each Pass Through
Trust, from an allocable amount of the proceeds of the sale of the related
Pass Through Certificates, the Pass Through Trustee shall purchase the
Certificates specified for such Pass Through Trust on Schedule I hereto. For
each Pass Through Trust, the Pass Through Trustee shall pay an amount equal to
the principal amount of Certificates of the Series and Maturity that relates
to such Pass Through Trust, which amounts in the aggregate shall equal the
aggregate principal amount of the Certificates as specified in Section 2.04 of
the Indenture. The aggregate amount payable by the Pass Through Trustee
pursuant to this Section 2.01(b) shall be payable by wire transfer or
intra-bank transfer to the Indenture Trustee on behalf of the Owner Trustee.
(c) On the Certificate Closing Date, the Indenture Trustee shall,
on behalf of the Owner Trustee, deposit, by wire transfer or intra-bank
transfer, the amounts received by it pursuant to Section 2.01(b) hereof in the
Collateral Account pursuant to the Indenture.
(d) On the Certificate Closing Date concurrently with the events
specified in Section 2.01(b) hereof, the parties hereto shall execute and
deliver, to the extent they are parties thereto, and consent to the execution
and delivery of (if they are not parties thereto), the Lease (other than the
Lease Supplement), the Indenture (other than the Indenture and Security
Agreement Supplement), and the other documents listed in Section 4.01(d)
hereof, and the Owner Trustee shall execute and deliver to the Indenture
Trustee for authentication, and the Indenture Trustee shall authenticate and
deliver to the Subordination Agent on behalf of the Pass Through Trustee for
each of the Pass Through Trusts, upon the request of the Owner Trustee, the
Certificates as provided in Section 2.02 hereof.
(e) The Closings shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 2.02. Certificates. Subject to the satisfaction or waiver
of the conditions set forth herein, on the Certificate Closing Date, the Owner
Participant will instruct the Owner Trustee to execute and deliver to the
Indenture Trustee, and the Indenture Trustee shall authenticate and deliver,
upon the request of the Owner Trustee, to the Subordination Agent on behalf of
the Pass Through Trustee for each of the Pass Through Trusts, the Certificates
specified for such Pass Through Trust on Schedule I attached hereto, which (i)
shall be issued in the principal amount and in the Series and Maturity set
forth for such Certificate in Schedule I hereto, (ii) shall bear interest at
the interest rate set forth for such Certificate in Schedule I hereto, (iii)
shall be issued in such form and on such terms as are specified in the
Indenture, (iv) shall be dated and authenticated on the Certificate Closing
Date and shall bear interest from the Certificate Closing Date and (v) shall
be registered in the name of the Subordination Agent on behalf of the Pass
Through Trustee for such Pass Through Trust.
Section 2.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the issuance of Certificates in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the action specified in Section 1.01 (other than clauses (a) and
(c)) of the Trust Agreement and confirmation that all conditions to closing
in respect of the Certificate Closing Date set forth in Section 4.01 (but
not Section 4.02) hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values and Termination Values. On or prior to the Delivery
Date, the percentages for Basic Rent referred to in Schedule II of the Lease
and the percentages for Stipulated Loss Value and Termination Value in
Schedule III and Schedule IV, respectively, of the Lease shall be adjusted
(upward or downward), subject to the procedures set forth in Section 3.04 of
the Lease and the minimum values established by Section 3.05 of the Lease and
the definitions of Stipulated Loss Value and Termination Value, to reflect
changes in the pricing assumptions with respect to (i) the Delivery Date being
other than June 20, 1997, (ii) a different rate of interest or amortization
schedule assumed by the Owner Participant in calculating such percentages from
that assumed by the Owner Participant in originally calculating such
percentages, (iii) Transaction Costs being other than as assumed in Section
10.01 hereof, (iv) any change in the length of the Basic Term (but in no event
shall the Term exceed 23.25 years) and (v) a Change in Tax Law which occurs
after the date of the execution of this Agreement but on or prior to the
Delivery Date. Notwithstanding anything herein to the contrary, the Lessee
shall have no obligation to enter into the transaction contemplated by this
Agreement other than with respect to Transaction Costs as described in Section
2.03 below and its obligation to purchase the Aircraft as provided in Section
3.05(a) hereof if, as a result of a Change in Tax Law after the date of
execution of this Agreement but on or prior to the Delivery Date, the Net
Present Value of Rents is increased by 100 basis points or more.
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date. The Lessee agrees
to give the Owner Participant, the Indenture Trustee, the Owner Trustee and
the Pass Through Trustee at least three (3) Business Days' written or
facsimile notice prior to the Delivery Date (which notice shall be effective
only if received not later than 10:00 a.m. (New York City time) on the date
that is at least three (3) Business Days prior to the Delivery Date), which
Delivery Notice shall specify the amount of the Purchase Price, the amount of
the Owner Participant's Commitment, the Debt Portion, the Delivery Date for
the Aircraft, the serial number of the Airframe and each Engine, and the
Aeronautics Authority registration number for the Aircraft.
Section 3.02. Commitments to Participate in Purchase Price. (a)
Participation in Purchase Price. Subject to the terms and conditions of this
Agreement, on the Delivery Date, (i) subject to the proviso to this Section
3.02(a), the Indenture Trustee agrees to release the Debt Portion or such
lesser amount as may then be held in the Collateral Account together with the
Lessee Shortfall (as defined in clause (iii) below), if any, to the Owner
Trustee for application to the Purchase Price as provided below, (ii) the
Owner Participant agrees to participate in the Lessor's payment of the
Purchase Price by making an investment in the beneficial ownership of the
Lessor's Estate in an amount equal to the amount set forth in Ancillary
Agreement II, (iii) subject to the proviso to this Section 3.02(a), the Lessee
agrees to pay to the Indenture Trustee the excess, if any, of (I) the Debt
Portion over (II) such amount as may then be held in the Collateral Account
(the "Lessee Shortfall") as provided in Section 17.02(a) hereof, and (iv)
pursuant to the Purchase Agreement as assigned pursuant to the Purchase
Agreement Assignment, AVSA shall sell the Aircraft to the Owner Trustee and
the Owner Trustee shall immediately thereafter lease the Aircraft to the
Lessee pursuant to the Lease. In consideration for the assignment to the
Owner Trustee by the Lessee under the Purchase Agreement Assignment of the
Lessee's right to purchase the Aircraft for the remaining balance due under
the Purchase Agreement and for the transfer of title to the Aircraft from
AVSA to the Owner Trustee, the following cash payments will be made by wire
transfer of immediately available funds on the Delivery Date: (A) by the
Owner Trustee to AVSA, an amount equal to the remaining balance due to AVSA
under the Purchase Agreement for the Aircraft, as evidenced by the Invoice,
or if the proviso to this Section 3.02(a) is applicable, such amount as it
shall have received from the Owner Participant not to exceed such remaining
balance due to AVSA, (B) by the Owner Trustee to the Lessee, an amount
equal to the Purchase Price (or if the proviso to this Section 3.02(a) is
applicable, the amount received from the Owner Participant) minus the cash
payment to AVSA pursuant to clause (A) above and (C) by the Indenture
Trustee, on behalf of the Owner Trustee, to the Lessee the excess of any
amounts as may then be held in the Collateral Account over the Debt
Portion; provided, however, that if (1) the Delivery Date has been
postponed, (2) the investments contemplated by Section 2.14(b) of the
Indenture have been made, (3) such investments do not mature on the
rescheduled Delivery Date and (4) the Lessee elects not to break such
investments, then the Indenture Trustee shall not release amounts in the
Collateral Account to the Owner Trustee and the Lessee shall instead pay to
AVSA any balance of the Purchase Price remaining after payment to AVSA by
the Owner Trustee as contemplated by clause (A) above and the Indenture
Trustee shall pay to the Lessee at the end of the applicable investment
period referred to in Section 2.14(b) of the Indenture all amounts then
held in the Collateral Account.
(b) Payment of Commitment. The Owner Participant agrees with the
Lessee and only with the Lessee on behalf of the Owner Trustee, subject to the
terms and conditions of this Agreement, to make the amount of its Commitment
available for and on account of the Owner Trustee on the Delivery Date
specified in the Delivery Notice pursuant to Section 3.03 hereof by wire
transfer, initiated by 10:00 a.m. (New York City time on such day) of such
amount in immediately available funds, to the Owner Trustee for deposit in its
account at State Street Bank and Trust Company, Boston, Massachusetts, ABA
No. ▇▇▇-▇▇▇-▇▇▇, A/C No. ▇▇▇▇-▇▇▇-▇, Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, Re: FedEx
Equity Payments Account. The amount of the Owner Participant's Commitment
shall be held for the account of the Owner Participant by the Owner Trustee
until released by the Owner Participant or its special counsel at closing or
until returned to the Owner Participant in accordance with Section 3.02(c)
hereof.
(c) No Obligation to Increase Commitments; Delayed Delivery. (i) If
the Indenture Trustee shall default in its obligation to make the amount of
its Debt Portion available pursuant hereto, the Owner Participant shall have
no obligation to make any portion of such Debt Portion available or to
increase the amount of its Commitment, and the obligations of the Owner
Participant shall remain subject to the terms and conditions of this
Agreement, until no later than September 30, 1997.
(ii) Subject to the provisions of Section 3.05 hereof, if the closing
of the transactions contemplated by the Operative Agreements shall not have
been consummated by 2:00 p.m. (New York City time), or such earlier time as
directed by the Lessee, on the Scheduled Delivery Date, the Owner Trustee
shall, if instructed in writing by the Lessee, at the risk and expense of the
Lessee, use its reasonable best efforts to cause the Owner Participant's
Commitment to be invested and reinvested to the extent practicable at the
direction received by it from the Lessee (with a copy to the Owner
Participant), at the risk of the Lessee, in Permitted Investments consisting
of either commercial paper or time deposits; provided, however, that in the
absence of instructions by 2:00 p.m. (New York City time) the Owner Trustee
shall use its reasonable best efforts to cause such amount or the proceeds
thereof to be invested and reinvested to the extent practicable in overnight
Eurodollar time deposits. Earnings on any such investments shall be applied
to the Lessee's payment obligations, if any, to such Owner Participant
pursuant to the next succeeding paragraph, and the balance, if any, of such
earnings remaining after such application shall be paid in accordance with the
Lessee's written instructions.
If for any reason (i) the Operative Agreements shall not be executed
and delivered by the respective parties thereto and/or the delayed Delivery
Date shall not occur (whether by reason of a failure to meet a condition
precedent thereto set forth in Article 4 hereof or otherwise) on or before the
third Business Day after the Scheduled Delivery Date (or earlier if requested
by the Owner Participant) or, if earlier, the Cut-Off Date, or (ii) the Lessee
has notified the Owner Trustee (with a copy to the Owner Participant) prior to
2:00 p.m. (New York City time) on any date after the Scheduled Delivery Date
that it does not intend to go forward to close the transactions contemplated
hereby for such Delivery Date, the Owner Participant may cancel any funding
arrangements made to fund its Commitment on the Scheduled Delivery Date but
the Owner Participant's Commitment hereunder with respect to the Aircraft
shall not be terminated thereby until September 30, 1997, whereupon the
Owner Participant's Commitment hereunder shall terminate. On such third
Business Day (or such earlier date) or September 30, 1997, as the case may
be, or the earliest practicable Business Day thereafter, the Owner Trustee
shall return the amounts held by it hereunder to the Owner Participant,
provided that the Owner Trustee shall have had a reasonable time to
liquidate any Permitted Investments it has been authorized to invest in
pursuant to the preceding paragraph and to obtain the proceeds therefrom in
funds of the type originally received, and the Lessee shall pay interest on
such funds to the Owner Participant at the Debt Rate, such interest to be
payable for the period from and including such Scheduled Delivery Date to
but excluding the date such funds are returned to the Owner Participant in
accordance with the terms hereof; provided that if any such funds are
returned to the Owner Participant after 2:00 p.m. (New York City time) on
any such date, such funds shall be deemed for purposes of this paragraph to
have been returned on the next succeeding Business Day.
The Lessee shall reimburse the Owner Trustee on demand for any loss
incurred by the Owner Trustee as a result of the investment of funds by the
Owner Trustee in accordance with the terms of this Section 3.02(c). Further,
the Lessee shall indemnify the Owner Trustee and hold it harmless from and
against any cost or expense the Owner Trustee may incur as a result of any
investment of funds or transfer of funds referred to herein in accordance with
the terms hereof. The Owner Trustee shall not be liable for failure to invest
such funds except as otherwise provided herein or for any losses incurred on
such investments except for any losses arising out of its own gross negligence
or willful misconduct.
Section 3.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the release of its Commitment in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the actions specified in Sections 1.01(a) and (c) of the Trust
Agreement and confirmation that all conditions to closing set forth in
Section 4.02 hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 3.04. Transaction Costs. If the transactions contemplated
by this Article 3 are consummated, as and when any portion of Transaction
Costs becomes due and payable, the Owner Participant shall, as soon as
practicable upon receipt of bills or invoices for the amounts payable make
such payments or, if the Lessee shall have already made such payment, shall
reimburse the Lessee therefor or shall, as soon as practicable, furnish the
Owner Trustee funds sufficient to, and the Owner Trustee shall, as soon as
practicable, make payment of such portion to the Person or Persons entitled to
payment upon presentation to the Owner Trustee of bills or invoices for the
amount of such payment. If such transactions are not consummated, the Lessee
shall pay or cause to be paid all the Transaction Costs; provided, however
that if the failure of such transactions to be consummated is due to (i) a
failure of the Owner Participant to obtain investment approval to proceed with
the transaction contemplated hereby, (ii) a failure to negotiate the Operative
Agreements in good faith by the Owner Participant or (iii) a wrongful act by
the Owner Participant, the Lessee shall have no obligation to pay those costs
and expenses incurred directly by the Owner Participant in connection with the
transactions contemplated by this Agreement described in Sections 10.01(a)(i)
and (xi) hereof, but the Lessee shall be obligated to pay all other
Transaction Costs.
Section 3.05. Postponement of Delivery Date. (a) If the Owner
Participant shall for any reason fail or refuse to make the full amount of its
Commitment available on the Scheduled Delivery Date in accordance with the
terms of Section 3.02 hereof, the Owner Trustee will promptly give each party
confirmed facsimile notice thereof and the Lessee shall postpone the Delivery
Date for a period of not more than five (5) Business Days, but in no event
later than September 30, 1997. If the Owner Participant shall for any reason
fail or refuse to make the full amount of its Commitment available in
accordance with the terms of Section 3.02 hereof on such postponed Delivery
Date, (i) if the Owner Participant fails to make available its Commitment in
breach of its obligations under this Agreement, the Lessee shall cause the
Owner Participant to assign to another equity investor identified by the
Lessee its interest in the Lessor's Estate pursuant to Section 7.03(d) hereof
and (ii) if no such equity investor is identified, or if such equity investor
fails to close such transactions, or if the Owner Participant fails to make
available its Commitment for any other reason than as specified in clause (i)
above, the Owner Participant's interest in the Lessor's Estate shall be
automatically conveyed to the Lessee without any further action, and the
parties hereto shall take such actions as may be advisable or necessary to
give effect to such conveyance. From and after any such conveyance, the
Owner Participant's obligations hereunder and under the other Operative
Agreements shall cease. The exception to the Lessee's indemnity set forth
in clause (viii) of Section 9.01(b) hereof shall not be applicable to any
such conveyance other than a conveyance pursuant to clause (i) above. For
the avoidance of doubt, it is understood and agreed that if for any reason
other than the failure of the Manufacturer or AVSA to deliver the Aircraft,
the Lessee does not enter into the Lease Supplement with the Owner Trustee
on or prior to the Cut-Off Date, the Indenture Trustee and the Pass Through
Trustee agree that the Lessee shall purchase the Aircraft and assume all of
the obligations of the Owner Trustee under the Certificates upon
satisfaction of the requirements set forth in Section 4.02 hereof, as the
same may be modified by the provisions of Section 7.11 hereof and as
otherwise necessary to reflect a full recourse secured aircraft financing
of the Lessee. If the Lessee has identified an equity investor under the
circumstances set forth in clause (i) above, the Owner Participant agrees
to assign its interest in the Lessor's Estate as provided in said clause
(i). In case of any such conveyance pursuant to said clause (i) (but
subject to the satisfaction of the conditions precedent specified herein),
the Indenture Trustee shall release the Debt Portion or such lesser amount
as may then be held in the Collateral Account for application to the
payments contemplated in the last sentence of Section 3.02(a) hereof,
subject to the proviso to Section 3.02(a) hereof.
(b) Release of Obligations. If the Delivery Date has not occurred
on or prior to the Cut-Off Date (i) in the case of the Indenture Trustee and
the Pass Through Trustee, as a result of a failure of the Manufacturer or AVSA
to deliver the Aircraft, or (ii) in the case of the Owner Participant, for any
reason, then, in such event, the Owner Trustee shall not purchase the Aircraft
from AVSA, and the parties to the Operative Agreements shall have no further
obligations or liabilities under any of said Operative Agreements with respect
to the Aircraft, including the obligation of the Owner Participant to
participate in the payment of the Purchase Price, and such documents shall
terminate and have no further force or effect with respect to the Aircraft;
provided, however, that the Lessee shall provide, no later than the Cut-Off
Date, notice of prepayment to the Indenture Trustee and the Certificates shall
be prepaid on the 15th day following the Cut-Off Date as provided in Section
6.02(a)(vi) of the Indenture and Section 17.02(c) hereof and provided further,
that (i) the Lessee's obligation to pay any Transaction Costs as provided in
Section 3.04 hereof (to the extent such section is applicable) and to
indemnify such parties to the extent provided in such documents, shall not be
diminished or modified in any respect and (ii) the obligations of the Owner
Trustee, the Indenture Trustee and the Lessee to return funds and pay
interest, costs, expenses and other amounts thereon or in respect thereof as
provided in Section 3.02 hereof shall continue.
(c) Optional Postponement. Without limiting the provisions of
Section 3.02(c) hereof, the Scheduled Delivery Date may be postponed from time
to time (but in no event shall the Delivery Date be later than the Cut-Off
Date) for any reason, other than pursuant to Section 3.05(a) hereof, if the
Lessee gives the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Pass Through Trustee confirmed facsimile notice (or telephone notice
followed by written confirmation) of such postponement and notice of the date
to which the Delivery Date has been postponed, such notice of postponement to
be received by each party no later than 11:00 a.m. (New York City time) on the
Business Day preceding the Scheduled Delivery Date.
Section 3.06. Closing. The closing with respect to the purchase and
lease of the Aircraft on the Delivery Date shall take place at the offices of
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ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date). The
obligations of the Owner Trustee, the Owner Participant, the Indenture
Trustee, the Subordination Agent and the Pass Through Trustee on behalf of
each Pass Through Trust to participate in the transactions contemplated hereby
on the Certificate Closing Date are subject to the fulfillment to the
satisfaction of such party (or waiver by such party), prior to or on the
Certificate Closing Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligations of any party):
(a) Certificates. (i) On the Certificate Closing Date, there shall
have been duly issued and delivered by the Owner Trustee to the
Subordination Agent on behalf of the Pass Through Trustee for each Pass
Through Trust, against payment therefor, a Certificate, substantially in
the form set forth in Exhibit B to the Indenture, duly authenticated, dated
the Certificate Closing Date and registered in the name of the
Subordination Agent, in the principal amounts, Series and Maturity, bearing
the interest rate and the other economic terms specified in the Series
Supplements and otherwise as provided in Section 2.04 of the Indenture.
The Pass Through Certificates shall be registered under the Securities Act,
any applicable state securities laws shall have been complied with, and the
Pass Through Agreement shall have been qualified under the Trust Indenture
Act, and (ii) on the Certificate Closing Date, the "Certificates" (as
defined in each of the Related Indentures) have been duly issued and
delivered by the "Owner Trustee" (as defined in each of the Related
Indentures) to the Subordination Agent on behalf of the Pass Through
Trustee for each Pass Through Trust.
(b) Legal Investment. On the Certificate Closing Date, no fact or
condition shall exist under applicable laws or regulations, or
interpretations of any such laws or regulations by applicable regulatory
authorities, which, in the opinion of the Owner Participant or its special
counsel, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee or their special counsel, would make it illegal for the Owner
Participant, the Lessee, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee, and no change in
circumstances shall have occurred which would otherwise make it illegal or
otherwise in contravention of guidance issued by regulatory authorities for
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through
Trustee, the Subordination Agent or the Indenture Trustee, to participate
in the transactions to be consummated on the Certificate Closing Date; and
no action or proceeding shall have been instituted nor shall governmental
action before any court, governmental authority or agency be threatened
which in the opinion of counsel for the Owner Participant, the Indenture
Trustee, the Subordination Agent or the Pass Through Trustee is not
frivolous, nor shall any order have been issued or proposed to be issued by
any court, or governmental authority or agency, as of the Certificate
Closing Date, to set aside, restrain, enjoin or prevent the consummation of
any of the transactions contemplated by this Agreement or by any of the
other Operative Agreements.
(c) Underwriters. The Underwriters shall have transferred the funds
specified in Section 2.01(a) hereof and all conditions thereunder shall
have been satisfied or waived.
(d) Documents. This Agreement and the following documents shall
have been duly authorized, executed and delivered by the respective
party or parties thereto, shall each be satisfactory in form and
substance to the Lessee, the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would
be a default thereunder, and copies executed or certified as requested
by the Lessee, the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee, the Subordination Agent or the Owner Participant, as
the case may be, of such documents shall have been delivered to the
Owner Participant, the Lessee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent and the Owner Trustee (provided that
the sole chattel-paper original of each of the Lease and each Ancillary
Agreement amendatory of the Lease, shall be delivered to the Indenture
Trustee):
(i) the Lease;
(ii) the Indenture;
(iii) in the case of the Owner Participant only, the Tax Indemnity
Agreement;
(iv) the Purchase Agreement and the Consent and Guaranty;
(v) the Purchase Agreement Assignment and the French Pledge
Agreement with respect thereto;
(vi) the GTA;
(vii) the Trust Agreement;
(viii) the Ancillary Agreement I;
(ix) the Ancillary Agreement II;
(x) the Owner Participant Guaranty;
(xi) the Intercreditor Agreement; and
(xii) the Liquidity Facility for each of the Pass Through Trusts for
the Series A Certificates and the Series B Certificates.
(e) Approvals. All approvals and consents of any trustees or
holders of any indebtedness or obligations of the Lessee, which in the
opinion of the Owner Participant, the Pass Through Trustee or the Indenture
Trustee are required in connection with any transaction contemplated by
this Agreement, shall have been duly obtained.
(f) Financing Statements. Uniform Commercial Code ("UCC") financing
statements covering all the security interests (and other interests)
intended to be created by or pursuant to the Granting Clause of the
Indenture shall have been executed and delivered by the Owner Trustee, as
debtor, and by the Indenture Trustee, as secured party, for and on behalf
of the Holders, and such financing statements shall have been duly filed or
duly submitted for filing in the State of Connecticut, and all other
actions shall have been taken which, in the opinion of the Owner
Participant, the Pass Through Trustee and the Underwriters, are necessary
to perfect and protect such security interests and other interests.
(g) Corporate Documents. Except when such Person is the delivering
party, the Owner Participant, the Owner Trustee, the Pass Through Trustee,
the Lessee and the Indenture Trustee (acting directly or by authorization
to its counsel) shall have received the following, in each case in form and
substance satisfactory to it:
(i) a copy of the certificate of incorporation and by-laws of the
Lessee, certified by the Secretary or an Assistant Secretary of the
Lessee as of the Certificate Closing Date, and a copy of the minutes
of the regular meeting of the board of directors of the Lessee,
certified as such as of the Certificate Closing Date by such
Secretary or Assistant Secretary, duly authorizing the lease by the
Lessee of the Aircraft under the Lease and the execution, delivery
and performance by the Lessee of this Agreement, the Lease, the Tax
Indemnity Agreement, the Pass Through Agreement, the Series
Supplements, the other Operative Agreements to which the Lessee is
or is to be a party and each other document to be executed and
delivered by the Lessee in connection with the transactions
contemplated hereby;
(ii) a copy of the articles of incorporation and bylaws of the
Owner Participant and the Owner Participant Guarantor, certified by
the Secretary or an Assistant Secretary of the Owner Participant or
the Owner Participant Guarantor as of the Certificate Closing Date,
and a copy of the resolutions of the board of directors of the Owner
Participant, certified as such as of the Certificate Closing Date by
such Secretary or an Assistant Secretary, authorizing the execution
and delivery by the Owner Participant of this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative
Agreements to which the Owner Participant is or is to be a party and
each other document to be executed and delivered by the Owner
Participant in connection with the transactions contemplated hereby,
and a copy of the resolutions of the board of directors of the Owner
Participant Guarantor, certified as such as of the Certificate
Closing Date by the Secretary or an Assistant Secretary, authorizing
the execution and delivery by the Owner Participant Guarantor of the
Owner Participant Guaranty and the other Operative Agreements to
which such Owner Participant Guarantor is or is to be a party and
each other document to be executed and delivered by the Owner
Participant Guarantor in connection with the transactions
contemplated hereby;
(iii) a copy of the articles of association and by-laws and other
instruments of the Owner Trustee, certified by the Secretary or an
Assistant Secretary of the Owner Trustee as of the Certificate
Closing Date (or other like instruments satisfactory to the Lessee
and the Owner Participant) and evidence authorizing the execution,
delivery and performance by the Owner Trustee in its individual
capacity or as Owner Trustee, as the case may be, of this Agreement,
the Trust Agreement and each of the other Operative Agreements to
which it is or is to be a party, whether in its individual capacity
or as Owner Trustee, and each other document to be executed and
delivered by the Owner Trustee in connection with the transactions
contemplated hereby;
(iv) a copy of the articles of association and by-laws and
other instruments of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture Trustee as of
the Certificate Closing Date (or other like instruments
satisfactory to the Lessee and the Owner Participant) and evidence
authorizing the execution, delivery and performance by the
Indenture Trustee of each of this Agreement, the Indenture and
each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by
the Indenture Trustee in connection with the transactions
contemplated hereby;
(v) a copy of the articles of association and by-laws and other
instruments of the Pass Through Trustee, certified by the Secretary
or an Assistant Secretary of the Pass Through Trustee as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Pass Through Trustee of
this Agreement, the Pass Through Agreement, the Series Supplements
and each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by the
Pass Through Trustee in connection with the transactions contemplated
hereby;
(vi) a copy of the articles of association and by-laws and other
instruments of the Subordination Agent, certified by the Secretary or
an Assistant Secretary of the Subordination Agent as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Subordination Agent of
this Agreement, the Intercreditor Agreement and each of the other
Operative Agreements to which it is or is to be a party, and each
other document to be executed and delivered by the Subordination
Agent in connection with the transactions contemplated hereby; and
(vii) such other documents, evidences, materials, and information
with respect to the Lessee, the Owner Trustee, the Indenture Trustee,
the Pass Through Trustee and the Owner Participant as the Indenture
Trustee, the Pass Through Trustee or the Owner Participant may
reasonably request in order to establish the consummation of the
transactions contemplated by this Agreement.
(h) Officer's Certificate of Lessee. On the Certificate Closing
Date, the following statements shall be true, and the Owner Participant,
the Owner Trustee, the Pass Through Trustee and the Indenture Trustee shall
have received a certificate signed by the Vice President and Treasurer or
any other duly authorized officer of the Lessee, dated the Certificate
Closing Date, stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(i) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Certificate Closing Date, the following statements shall
be true, and the Lessee, the Pass Through Trustee, the Owner Trustee and
the Indenture Trustee shall have received a certificate from (i) the Owner
Participant, signed by a duly authorized officer of the Owner Participant
dated the Certificate Closing Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto, are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(j) Other Officer's Certificates. On the Certificate Closing Date,
the following statements shall be true, and the Lessee, the Pass Through
Trustee, the Owner Trustee, the Subordination Agent and the Indenture
Trustee shall have received a certificate from each of SSB and the Owner
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Indenture Trustee), FSB and the Indenture
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Owner Trustee), FSB and the Pass Through
Trustee (in the case of the Lessee, the Indenture Trustee, the
Subordination Agent and the Owner Trustee) and FSB and the Subordination
Agent (in the case of the Lessee, the Pass Through Trustee, the Indenture
Trustee and the Owner Trustee), signed by a duly authorized officer of SSB
and FSB, respectively, dated the Certificate Closing Date, stating with
respect to SSB and the Owner Trustee, with respect to FSB and the Indenture
Trustee, with respect to FSB and the Pass Through Trustee or with respect
to FSB and the Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Certificate
Closing Date as though made on and as of such date (except to the
extent that such representations and warranties relate solely to
an earlier date, in which case such certificate shall state that
such representations and warranties were true and correct on and
as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens.
(k) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Certificate Closing Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(a) hereto and the General Counsel's Office of the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(b) hereto, each addressed to the Underwriters, the Owner
Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee, each Liquidity Provider and the Lessee;
(iii) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Indenture
Trustee, in the form of Exhibit A(3) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(iv) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(i) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(v) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(vi) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Pass Through
Trustee and the Subordination Agent, in the form of Exhibit A(5)
hereto and addressed to the Underwriters, the Owner Participant, the
Indenture Trustee, the Owner Trustee, the Pass Through Trustee, each
Liquidity Provider and the Lessee; and
(vii) ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal Department of
Kredietbank N.V., in the form of Exhibit A(6)(a) hereto, and Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel for the Liquidity Providers,
in the form of Exhibit A(6)(b) hereto, each addressed to the Pass
Through Trustee, the Subordination Agent, each Liquidity Provider and
the Lessee.
(l) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(m) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(n) Other Agreements. The Lessee and the Pass Through Trustee
shall have entered into the Pass Through Agreement and the Series
Supplements, all conditions to the effectiveness of each thereof shall
have been satisfied or waived, and the Pass Through Certificates shall
have been issued pursuant to the Series Supplements. The Lessee and the
Underwriters shall have entered into the Underwriting Agreement, all
conditions to the effectiveness thereof shall have been satisfied or
waived, and the Pass Through Certificates shall have been delivered
pursuant to the Underwriting Agreement. All conditions to the
effectiveness of each Liquidity Facility shall have been satisfied or
waived.
(o) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements
referred to in subparagraph (f) of this Section 4.01, or in connection with
the issuance of the Certificates shall have been duly paid or caused to be
paid in full; and (B) all sales or use taxes and duties related to the
consummation of the transactions contemplated by the Operative Agreements
on the Certificate Closing Date which are then due and payable shall have
been duly paid in full.
(p) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Certificate Closing Date in connection with the transactions contemplated
by this Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Certificate Closing Date in
connection with the transactions contemplated by this Agreement shall have
been issued, and all such permits shall be in full force and effect on the
Certificate Closing Date.
(q) Section 131.3 of the New York State Banking Law Filing. SSB
shall have delivered evidence of its filing made with the New York
Superintendent of Banking pursuant to Section 131.3 of the New York State
Banking Law.
Section 4.02. Conditions Precedent (Delivery Date). Subject to the
last paragraph of this Section 4.02, the obligations of the Owner Trustee, the
Owner Participant, the Indenture Trustee, the Subordination Agent and the Pass
Through Trustee on behalf of each Pass Through Trust to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of each party (or waiver by such party), prior
to or on the Delivery Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligation of any party):
(a) Notice, Etc. Each party hereto shall have received a Delivery
Notice pursuant to Section 3.01 hereof at least three (3) Business Days
prior to the Delivery Date.
(b) Legal Investment. No change shall have occurred after the
Certificate Closing Date and on or prior to the Delivery Date in applicable
laws or regulations, or interpretations of any such laws or regulations by
applicable regulatory authorities, which, in the opinion of the Owner
Participant or its special counsel, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee or their special counsel,
would make it illegal for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, and no change in circumstances shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance issued
by regulatory authorities for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, to participate in the transactions to be consummated on the
Delivery Date; and no action or proceeding shall have been instituted nor
shall governmental action before any court, governmental authority or
agency be threatened which in the opinion of counsel for the Owner
Participant, the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee is not frivolous, nor shall any order have been issued or
proposed to be issued by any court, or governmental authority or agency, as
of the Delivery Date, to set aside, restrain, enjoin or prevent the
consummation of any of the transactions contemplated by this Agreement or
by any of the other Operative Agreements.
(c) Documents. The documents referred to in Section 4.01(d) hereof
shall each be in full force and effect and the following documents shall
have been duly authorized, executed and delivered by the respective party
or parties thereto, shall each be satisfactory in form and substance to the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee,
the Subordination Agent and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would be
a default thereunder, and copies executed or certified as requested by the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee
or the Owner Participant, as the case may be, of such documents shall have
been delivered to the Owner Participant, the Lessee, the Indenture Trustee,
the Pass Through Trustee and the Owner Trustee (provided that the sole
chattel-paper original of the Lease Supplement shall be delivered to the
Indenture Trustee):
(i) the Lease Supplement covering the Aircraft, dated the Delivery
Date;
(ii) an Indenture and Security Agreement Supplement covering the
Aircraft, dated the Delivery Date;
(iii) the Invoice;
(iv) AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale and the
Airbus Guaranty;
(v) the Consent and Agreement and the AVSA Consent and Agreement;
and
(vi) the Engine Warranty Assignment and the Engine Consent.
(d) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Delivery Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(iii) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(ii) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(iv) counsel for the Engine Manufacturer, in the form of Exhibit
A(7) hereto and addressed to the Underwriters, the Owner Participant,
the Indenture Trustee, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Lessee;
(v) ▇▇▇▇▇▇▇▇ Chance, special counsel for AVSA and the
Manufacturer, in the form of Exhibit A(8) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(vi) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special aviation counsel, in
the form of Exhibit A(9) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee; and
(vii) in the case of the Owner Participant only, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, tax counsel to the Owner Participant,
addressed to the Owner Participant, with respect to certain tax
matters.
(e) Title, Airworthiness and Registration. On the Delivery Date,
the following statements shall be true, and the Owner Participant, the
Indenture Trustee, the Pass Through Trustee and the Owner Trustee shall
have received evidence from the Lessee reasonably satisfactory to the
Owner Participant, the Indenture Trustee, the Pass Through Trustee and
the Owner Trustee to the effect that:
(i) the Owner Trustee has good and marketable title (subject to
filing and recording of AVSA's FAA ▇▇▇▇ of Sale with the Aeronautics
Authority) to the Aircraft, free and clear of Liens, except the
rights of the Owner Trustee and the Lessee under the Lease and the
Lease Supplement covering the Aircraft, the rights of the Indenture
Trustee under the Indenture and the beneficial interest of the Owner
Participant created by the Trust Agreement and the interest of the
Certificate Holders created by the Indenture and the Indenture and
Security Agreement Supplement covering the Aircraft, which evidence
shall include AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale
and the Airbus Guaranty;
(ii) the Aircraft has been duly certificated by the Aeronautics
Authority as to type and airworthiness in accordance with the terms
of the Operative Agreements;
(iii) AVSA's FAA ▇▇▇▇ of Sale, the Lease and Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft and the Trust Agreement
shall have been duly filed for recordation (or shall be in the
process of being so duly filed for recordation) with the Aeronautics
Authority pursuant to the Transportation Code; and
(iv) application to the Aeronautics Authority for registration of
the Aircraft in the name of the Owner Trustee shall have been duly
made and the Lessee shall have temporary or permanent authority to
operate the Aircraft.
(f) Financing Statements. A UCC notice filing describing the Lease
as a lease shall have been executed and delivered by the Owner Trustee, as
lessor, and the Lessee, as lessee (which filing shall name the Indenture
Trustee as assignee of the Owner Trustee) and shall have been duly filed in
the State of Tennessee.
(g) Payments. The Owner Participant shall have made available its
Commitment to the Owner Trustee and the other payments contemplated by
Section 3.02 hereof shall have been made.
(h) Report of Aircraft Expert. The Owner Participant shall have
received a report prepared by BK Associates, Inc. addressed to the Owner
Participant (with an abbreviated report to the Lessee) which report shall
be in form and substance satisfactory to the Owner Participant to the
effect, among other things, that on the Delivery Date:
(i) (A) the estimated fair market value of the Aircraft net of
any cost to the Owner Participant or the Owner Trustee of return at
the end of the Basic Term and any Fixed Renewal Term (determined
without including in such value any increase or decrease for
inflation or deflation during the Term) is equal to or greater than
20% of the Purchase Price for the Aircraft and (B) at least 20% of
the useful economic life of the Aircraft will be remaining at the end
of the Basic Term and any Fixed Renewal Term;
(ii) the estimated useful life of the Aircraft is at least 133% of
the Basic Term and any Fixed Renewal Term;
(iii) the Purchase Price of the Aircraft is no greater than the
fair market value of the Aircraft on the Delivery Date;
(iv) on the Delivery Date, the Aircraft will not require any
modifications, improvements or additions in order to be rendered
complete for its intended purpose by the Lessee;
(v) the amount payable by the Lessee upon the exercise of its
purchase option pursuant to Section 4.02(a)(F) of the Lease equals or
exceeds the currently estimated Fair Market Value of the Aircraft on
such date (taking into account inflation or deflation to such date);
and
(vi) the Aircraft is not limited use property.
(i) Insurance. Each of the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee and the Owner Participant shall have received
such evidence as it deems appropriate, including, without limitation, an
independent insurance broker's report, together with certificates of
insurance from such broker, in form and substance satisfactory to the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee and the
Owner Participant to establish that the insurance required by Article 13 of
the Lease is in effect.
(j) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements and
the documents and instruments referred to in subparagraphs (e) and (f) of
this Section 4.02, or in connection with the purchase of the Aircraft by
the Owner Trustee and the making by the Owner Participant of its equity
investment shall have been duly paid or caused to be paid in full; and (B)
all sales or use taxes and duties related to the consummation of the
transactions contemplated by the Operative Agreements on the Delivery Date
which are then due and payable shall have been duly paid in full.
(k) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(l) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease (assuming, for this purpose, that the provisions
of Article 16 of the Lease had become operative on the Certificate Closing
Date and not the Delivery Date) or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(m) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Delivery Date in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Delivery Date in connection with
the transactions contemplated by this Agreement shall have been issued, and
all such permits shall be in full force and effect on the Delivery Date.
(n) Officer's Certificate of Lessee. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received a certificate signed by the Vice President and Treasurer or any
other duly authorized officer of the Lessee, dated the Delivery Date,
stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(o) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Delivery Date, the following statements shall be true,
and the Lessee, the Pass Through Trustee, the Owner Trustee and the
Indenture Trustee shall have received a certificate from the Owner
Participant, signed by a duly authorized officer of (i) the Owner
Participant dated the Delivery Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement (excluding the Tax Indemnity Agreement) to which
it is a party and in any certificate delivered pursuant hereto or
thereto, are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(p) Other Officer's Certificates. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Lessee,
the Pass Through Trustee, the Owner Trustee, the Subordination Agent and
the Indenture Trustee shall have received a certificate from each of SSB
and the Owner Trustee (in the case of the Lessee, the Pass Through Trustee,
the Owner Participant, the Subordination Agent and the Indenture Trustee),
FSB and the Indenture Trustee (in the case of the Lessee, the Pass Through
Trustee, the Owner Participant, the Subordination Agent and the Owner
Trustee), FSB and the Pass Through Trustee (in the case of the Lessee, the
Indenture Trustee, the Owner Participant, the Subordination Agent and the
Owner Trustee) and FSB and the Subordination Agent (in the case of the
Lessee, the Indenture Trustee, the Owner Participant, the Pass Through
Trustee and the Owner Trustee) signed by a duly authorized officer of SSB
and FSB, respectively, dated the Delivery Date, stating with respect to SSB
and the Owner Trustee, with respect to FSB and the Indenture Trustee, with
respect to FSB and the Pass Through Trustee or with respect to FSB and the
Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Delivery Date
as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens affecting the Trust
Indenture Estate or the Lessor's Estate or any part thereof.
(q) Release of Debt Portion. The Indenture Trustee shall have
released the Debt Portion from (or such lesser amount as may then be held
in) the Collateral Account or if the proviso to Section 3.02(a) is
applicable, then the Lessee shall have made the payment required to be made
to AVSA pursuant to such proviso.
Notwithstanding anything else to the contrary in this Section 4.02, it shall
not be a condition precedent to the obligations of the Indenture Trustee, the
Pass Through Trustee or the Subordination Agent that the conditions in Section
4.02(n) and (o) be satisfied if the Lessee certifies that the failure to
fulfill such condition precedent is not reasonably likely to materially
adversely affect the holders of Pass Through Certificates and, in the event of
such failure, there has been delivered to the Indenture Trustee written
confirmation from both ▇▇▇▇▇'▇ and S&P of the rating on any class of Pass
Through Certificates.
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.
Promptly upon the registration of the Aircraft and the filing and, where
appropriate, recordation pursuant to the Transportation Code, of AVSA's FAA
▇▇▇▇ of Sale, the Trust Agreement, the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security Agreement
Supplement covering the Aircraft attached as exhibits) and the Indenture (with
the Indenture and Security Agreement Supplement covering the Aircraft attached
as an exhibit), the Lessee shall cause Special Aviation Counsel to deliver to
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through Trustee
and the Indenture Trustee an opinion as to (i) the due registration of the
Aircraft in the name of the Owner Trustee, (ii) the due recording pursuant to
the Transportation Code of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Lease (with such Lease Supplement, the Indenture and such Indenture and
Security Agreement Supplement attached as exhibits), and the Indenture (with
such Indenture and Security Agreement Supplement attached as an exhibit), and
(iii), subject to customary qualifications, the lack of any intervening
documents with respect to the Aircraft.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby on
the Certificate Closing Date is subject to the conditions that, prior to or on
the Certificate Closing Date, the Lessee shall have received the certificates
and other documents which are referred to in, or the opinions to be addressed
to it under, as the case may be, paragraphs (d), (g)(ii)-(v), (i), (j),
(k)(ii)-(vi) of Section 4.01 hereof and the Underwriters shall have made
available the amounts required to be paid by them pursuant to Section 2.01
hereof, and the Lessee's obligation to participate in the transactions
contemplated hereby on the Delivery Date, is subject to the conditions that,
on or prior to the Delivery Date, the Lessee shall have received the documents
which are referred to in, or the opinions to be addressed to it under, as the
case may be, paragraphs (c) and (d)(ii)-(v) of Section 4.02 hereof and the
Indenture Trustee shall have released the Debt Portion from (or such lesser
amount as may then be held in) the Collateral Account.
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties. The Lessee
represents and warrants to the Owner Participant, the Owner Trustee (in its
individual capacity and as Owner Trustee), the Pass Through Trustee (in its
individual capacity and as Pass Through Trustee), each Liquidity Provider and
the Indenture Trustee (in its individual capacity and as Indenture Trustee)
that, on the date hereof and as of the Certificate Closing Date and the
Delivery Date (unless any such representation is specifically made as of one
date):
(a) the Lessee is a corporation duly organized and validly existing
and is in good standing under the laws of the State of Delaware with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) in Memphis, Tennessee,
and is duly qualified to do business as a foreign corporation and is in
good standing in all jurisdictions in which it has intrastate routes, or
offices or major overhaul facilities or in which other activities of the
Lessee require such qualification;
(b) the Lessee has full power, authority and legal right to conduct
its business and operations as currently conducted and to own or hold under
lease its Properties and to enter into and perform its obligations under
this Agreement, the other Operative Agreements to which it is a party, the
Pass Through Agreement and the Series Supplements (the "Lessee Documents");
(c) the Lessee is an "air carrier" within the meaning of the
Transportation Code and a holder of a certificate under Sections 41102(a)
and 41103 of the Transportation Code and a "citizen of the United States"
within the meaning of Section 40102(a)(15) of the Transportation Code
holding an "air carrier operating certificate" issued under Chapter 447 of
the Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and each such certificate is
in full force and effect;
(d) the Lessee possesses all necessary certificates, franchises,
licenses, permits, rights and concessions and consents (collectively
"permits") which are material to the operation of the routes flown by it
and the conduct of its business and operations as currently conducted and
each such permit is in full force and effect;
(e) the execution, delivery and performance of the Lessee Documents
by the Lessee have been duly authorized by all necessary corporate action
on the part of the Lessee and do not require any stockholder approval, or
approval or consent of any trustee or holder of any indebtedness or
obligations of the Lessee, and each such document has been duly executed
and delivered or, in the case of the Operative Agreements identified in
Section 4.02(c) hereof, will on the Delivery Date be executed and delivered
by the Lessee and constitutes (or will constitute, as the case may be) the
legal, valid and binding obligations of the Lessee enforceable against it
in accordance with the terms thereof except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws or equitable principles of general application to or affecting
the enforcement of creditors' rights generally (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(f) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body (other than the SEC) is required
for the execution, delivery or performance by the Lessee of the Lessee
Documents or for the use and maintenance of the Aircraft except for such
registrations, applications and recordings referred to in the opinions of
Special Aviation Counsel delivered or to be delivered pursuant to Sections
4.02(d)(iii) and 4.03 hereof and except for the filings referred to in
Sections 4.01(f) and 4.02(f) hereof, all of which shall have been duly
obtained or made and shall be in full force and effect on and as of the
Certificate Closing Date or the Delivery Date, or as contemplated by said
Sections;
(g) neither the execution, delivery or performance by the Lessee of
the Lessee Documents nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent (other than the Consent and Agreement, the AVSA
Consent and Agreement, the Engine Consent and the Consent and Guaranty) or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of the Lessee or any order,
writ, injunction or decree of any court or governmental authority against
the Lessee or by which it or any of its Properties is bound or any
indenture, mortgage or contract or other agreement or instrument to which
the Lessee is a party or by which it or any of its Properties is bound, or
constitutes or will constitute a default thereunder or results or will
result in the imposition of any Lien upon any of its Properties;
(h) there are no pending or, to the knowledge of the Lessee,
threatened actions, suits, investigations or proceedings (whether or not
purportedly on behalf of the Lessee) against or affecting the Lessee or any
of its Property before or by any court or administrative agency which (A)
involve the Aircraft, (B) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the fiscal year
ended May 31, 1996 (as updated by Note 7 to the financial statements
included in the Lessee's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (ii) in the Lessee's Current Reports on Form 8-K dated June 7, 1996,
August 16, 1996 and March 4, 1997, as to which no representation is made
concerning the Lessee's liability (if any) or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, if adversely determined, would materially and
adversely affect the consolidated financial condition, business or
operations of the Lessee, or (C) if adversely determined would adversely
affect the ability of the Lessee to perform its obligations under the
Lessee Documents;
(i) the Lessee has filed or caused to be filed all tax returns which
are required to be filed and has paid or caused to be paid all taxes shown
to be due and payable pursuant to such returns or pursuant to any
assessment received by the Lessee (other than assessments the payment of
which is being contested in good faith by the Lessee by appropriate
proceedings that do not involve any material danger of sale, forfeiture or
loss of the Aircraft or any part thereof), and the Lessee has no knowledge
of any related actual or proposed deficiency or additional assessment which
either in any case or in the aggregate would materially adversely affect
the Lessee's consolidated financial condition (other than, in any such case,
assessments, the payment of which is being contested in good faith by the
Lessee, as to which no representation is made concerning the Lessee's
liability (if any) or the effect of any adverse determination upon the
Lessee's consolidated financial condition);
(j) except for (A) the registration in the Owner Trustee's name of
the Aircraft pursuant to the Transportation Code to be accomplished by
filing with the FAA, of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Affidavits and the Application, (B) the filing with and, where appropriate,
recordation by the FAA pursuant to the Transportation Code of the
Indenture, the Indenture and Security Agreement Supplement covering the
Aircraft, the Lease and the Lease Supplement covering the Aircraft, (C) the
filing of the financing statements referred to in Sections 4.01(f) and
4.02(f) hereof and (D)(x) on the Certificate Closing Date, the taking of
possession by the Indenture Trustee of the Liquid Collateral and
maintaining possession by the Indenture Trustee thereof as contemplated in
Section 2.14(a) of the Indenture and (y) on the Delivery Date, the taking
of possession by the Indenture Trustee of the original counterpart of the
Lease and the Lease Supplement covering the Aircraft, no further action,
including any filing or recording of any document, is necessary or
advisable in order (i) to establish the Owner Trustee's title to and
interest in the Aircraft and the Lessor's Estate as against the Lessee and
any third parties, or (ii) to perfect the first security interest in and
mortgage Lien on the Trust Indenture Estate in favor of the Indenture
Trustee;
(k) on the Delivery Date, the Owner Trustee has received good and
marketable title to the Aircraft, free and clear of all Liens, except the
rights of the Lessee under the Lease and the Lease Supplement, the rights
of the Indenture Trustee under the Indenture and the beneficial interest of
the Owner Participant created by the Trust Agreement;
(l) the Lessee has heretofore delivered to the Owner Participant
true and correct copies of the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 and its Quarterly Reports on Form 10-Q for
the fiscal quarters ended August 31, 1996, November 30, 1996 and February
28, 1997, and of the audited consolidated balance sheet of the Lessee for
the fiscal year ended May 31, 1996 and the unaudited consolidated balance
sheets of the Lessee as of August 31, 1996, November 30, 1996 and February
28, 1997, and the related consolidated statements of income, changes in
common stockholders' investment and cash flows for the fiscal year and
interim reporting periods ended on such dates, accompanied (except in the
case of such interim reporting periods) by a report thereon containing
opinions without qualification, except as therein noted, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent public accountants; said financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly the financial position of the
Lessee as of such dates and the results of its operations and cash flows
for such periods and such Annual Report, Quarterly Reports and financial
statements did not, as of their respective dates of filing with the SEC,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein not misleading;
(m) with respect to ERISA:
(i) none of the Pension Plans (as defined at the end of this
Section 6.01(m)) nor their related trusts have been terminated in a
distress termination pursuant to Section 4041(c) of ERISA or by the
Pension Benefit Guaranty Corporation (together with any successor
agency or instrumentality thereto, the "PBGC") pursuant to Section
4042 of ERISA, nor have any actions been taken to so terminate any
Pension Plan or related trust and neither the Lessee nor any ERISA
Affiliate (as defined at the end of this Section 6.01(m)) has
incurred or could reasonably be expected to incur any material
liability with respect to a Pension Plan under Section 4062, 4063,
4064 or 4069 of ERISA;
(ii) there have been no "reportable events" (as such term is
defined in Section 4043(b) of ERISA) with respect to any Pension Plan
which have resulted or could reasonably be expected to result in any
material liability of the Lessee or any ERISA Affiliate;
(iii) no "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code) exists with
respect to any Pension Plan, whether or not waived, nor has any
request for a waiver under Section 412(d) of the Code been, or is
reasonably likely to be, filed with respect to any of the Pension
Plans;
(iv) neither the Lessee nor any ERISA Affiliate has failed to make
any contribution or payment to any Pension Plan which has resulted or
could reasonably be expected to result in the imposition of a Lien
under Section 302(f) of ERISA or Section 412(n) of the Code;
(v) all Pension Plans are in compliance in all material respects
with all applicable provisions of ERISA and the Code;
(vi) neither the Lessee nor any ERISA Affiliate has incurred or is
reasonably likely to incur any material withdrawal liability pursuant
to Section 4201 or 4204 of ERISA or any material liability under
Section 515 of ERISA;
(vii) to the best of the Lessee's knowledge, neither the Lessee
nor any ERISA Affiliate has engaged in a "prohibited transaction"
(within the meaning of Section 4975 of the Code or Section 406 of
ERISA) which could reasonably be expected to subject the Lessee to
the tax or penalties on prohibited transactions imposed by Section
4975 of the Code or Section 502 of ERISA; and
(viii) assuming the truth of the representations contained in
Section 7.09 hereof and compliance with Section 10.06 of the
Indenture, the execution and delivery of this Agreement and the other
Operative Agreements and the consummation of the transactions
contemplated hereby and thereby will not involve any transaction
which is prohibited by Section 406 of ERISA or in connection with
which a tax could be imposed pursuant to Section 4975 of the Code.
No part of the funds to be used by the Lessee in satisfaction of its
obligations under this Agreement or any other of the Operative
Agreements to which the Lessee is a party or to which the Lessee is
bound are the assets of any employee benefit plan subject to Title I
of ERISA, or any individual retirement account or an employee benefit
plan subject to Section 4975 of the Code;
as used in this Section 6.01(m), the term "Pension Plan" means an employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA) which is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and which is maintained, or contributed to,
by the Lessee or any ERISA Affiliate, and the term "ERISA Affiliate" means
any entity which together with the Lessee would be treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code;
(n) the Lessee is a Citizen of the United States;
(o) except for the filings referred to in Sections 4.01(f), 4.02(e)
and 4.02(f) hereof, no governmental approval of any kind is required of the
Owner Participant or for the Owner Participant's execution of or
performance under this Agreement or any agreement contemplated hereby by
reason of any fact or circumstance of the Lessee, the nature of the
Aircraft or the Lessee's proposed operations or use of the Aircraft;
(p) on the Delivery Date, all premiums with respect to the insurance
required to be provided by the Lessee on or prior to the Delivery Date
under Article 13 of the Lease have been paid by the Lessee;
(q) on the Delivery Date, all sales or use taxes relating to the
sale of the Aircraft by AVSA to the Owner Trustee which are then or were
theretofore due shall have been paid;
(r) the Lessee is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Lessee is a
party or by which it or any of its Properties or assets may be bound, or in
violation of any applicable law, which default or violation would have a
material adverse effect on the financial condition, business or operations
of the Lessee or its ability to perform any of its obligations under the
Lessee Documents;
(s) no Default or Event of Default or Event of Loss or event, which
with the passage of time or if continued unremedied or unaltered would
constitute an Event of Loss, has occurred or exists;
(t) on the Delivery Date, the Aircraft will be in such condition so
as to enable the airworthiness certificate of such Aircraft to be in good
standing under the Transportation Code; the Aircraft will have been duly
certificated by the FAA as to type and airworthiness; there will be in
effect with respect to the Aircraft a current and valid airworthiness
certificate issued by the FAA pursuant to the Transportation Code; and
there is no fact known to the Lessee which materially adversely affects the
value, utility or condition of the Aircraft;
(u) on the Certificate Closing Date and the Delivery Date, the
Lessee shall not be in default in the performance of any term or condition
of the Purchase Agreement, the Purchase Agreement Assignment, the Engine
Warranty Assignment and the GTA and the aggregate amount of loans shall not
exceed the Debt Portion;
(v) neither the Lessee nor any subsidiary of the Lessee is an
"investment company" or a company "controlled by an investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(w) on the Delivery Date, the Aircraft will, upon delivery, be fully
equipped to operate in commercial service and will comply with all
governmental requirements governing such service; and
(x) there are no broker's or underwriter's fees payable on behalf
of the Lessee in connection with the transactions contemplated in the
Operative Agreements other than those of the Underwriters and First
Chicago Leasing Corporation referred to in Article 10 hereof.
Section 6.02. Offering by Lessee. The Lessee represents and
warrants that it has authorized no one to act on its behalf in connection with
the offer or sale of any interest in the Lessor's Estate or the Trust
Agreement other than First Chicago Leasing Corporation. Neither the Lessee
nor, based on representations of First Chicago Leasing Corporation, anyone
acting on its behalf has directly or indirectly offered any interest in the
Lessor's Estate or the Trust Agreement, or similar interests, for sale to, or
solicited any offer to acquire any of the same from, anyone other than the
Owner Participant and no more than 15 other accredited investors (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended).
Section 6.03. Certain Covenants of Lessee. The Lessee covenants and
agrees with the Owner Participant, the Owner Trustee (in its individual
capacity and as Owner Trustee), the Pass Through Trustee (in its individual
capacity and as Pass Through Trustee) and the Indenture Trustee (in its
individual capacity and as Indenture Trustee) as follows:
(a) The Lessee will cause to be done, executed, acknowledged and
delivered at the Lessee's cost and expense all such further acts,
conveyances and assurances as the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee or the Owner Participant shall reasonably require for
accomplishing the purposes of this Agreement, the Trust Agreement, the
Purchase Agreement, the Purchase Agreement Assignment, the GTA, the Engine
Warranty Assignment, the Indenture, the Indenture and Security Agreement
Supplement, the Tax Indemnity Agreement, the Lease and the Lease Supplement
and the other Operative Agreements to which it is a party. Without
limiting the generality of this Section 6.03(a), the Lessee will promptly
take, or cause to be taken, at the Lessee's cost and expense, such action
with respect to the recording, filing, re-recording and re-filing of the
Indenture, each Indenture and Security Agreement Supplement, the Lease,
each Lease Supplement and any financing statements or other instruments as
may be necessary, or as requested by the Indenture Trustee and appropriate,
to maintain the perfection of the first security interest and the Lien
created by the Indenture, and the Owner Trustee's title to and interest in
the Aircraft and the Lessor's Estate as against the Lessee and any third
parties or if the Lessee cannot take, or cause to be taken, such action,
will furnish to the Indenture Trustee and the Owner Trustee timely notice
of the necessity of such action, together with such instruments, in
execution form, and such other information as may be required to enable
either of them to take such action at the Lessee's cost and expense in a
timely manner.
(b) From and after the Delivery Date, the Lessee shall maintain the
certificates referred to in Section 7.01 of the Lease and shall cause the
Aircraft to be duly registered, and at all times to remain duly registered,
in the name of the Owner Trustee, under the Transportation Code, and shall
furnish to the Owner Trustee such information as may be required to enable
the Owner Trustee to make application for such registration; provided,
however, that the Owner Participant, the Owner Trustee and the Indenture
Trustee agree that if at any time after December 31, 2004, so long as no
Event of Default shall have occurred and be continuing, the Lessee has
requested their consent to the registration of the Aircraft in the name of
the Owner Trustee (or, if appropriate under the laws of such
jurisdiction of reregistration, in the name of the Lessee or a sublessee
as a "lessee" or a "sublessee"), at the Lessee's expense, in a country
listed in Schedule III hereto with which the United States then
maintains normal diplomatic relations (and which is not then
experiencing war or substantial civil unrest), the Owner Participant,
the Owner Trustee and the Indenture Trustee upon receipt by the Owner
Participant, the Owner Trustee and the Indenture Trustee of the
assurances and opinion described below, shall not unreasonably withhold
their consent to such change in registration (it being agreed, without
limitation, that the inability of the Lessee to deliver such assurances
or such opinion shall constitute reasonable grounds to withhold such
consent).
As a condition to any change in the registration of the Aircraft, the
Owner Participant, the Owner Trustee in its individual and trust capacities,
and the Indenture Trustee shall have received:
(i) assurances satisfactory to them:
(A) to the effect that the insurance provisions of the Lease have
been and will be complied with and are and shall be in full force and
effect upon such change of registry;
(B) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft;
(C) that the Owner Trustee's right, title and interest in and to
the Aircraft is recognized and fully enforceable in the new
jurisdiction of registry, that the rights of the Owner Trustee in and
to the Aircraft will not be impaired in such new jurisdiction of
registry and that the new jurisdiction of registry will give effect
to the title and registry of the Aircraft therein substantially to
the same extent as does the Government;
(D) that such new country of registry (x) would provide
substantially equivalent protection for the rights of owner
participants, lessors or lenders in similar transactions as provided
under United States law (except that, in the absence of restrictions
under the laws of such country on rights and remedies of lessors and
secured parties similar to those imposed by Sections 362 and 363 of
the Bankruptcy Code, rights and remedies similar to those available
under Section 1110 of the Bankruptcy Code shall not be required) and
(y)(i) if such change in registration is made other than in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards at least comparable to those of
the FAA, and (ii) if such change in registration is made in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards in conformity with those set
forth in Section 7.02(a)(i) of the Lease;
(E) that import and export certificates and any exchange permits
necessary to allow all Rent and other payments provided for under the
Lease, if required, shall have been procured at the Lessee's own cost
and expense by the Lessee;
(F) that the Lessee shall have effected or caused to be effected
at the Lessee's own cost and expense all recordings and filings that
are required to perfect the Lien of the Indenture;
(G) to the effect that the original indemnities (and any
additional indemnities for which the Lessee is then willing to
enter into a binding agreement to indemnify) in favor of the Owner
Participant, the Owner Trustee (in its individual capacity and as
trustee under the Trust Agreement), the Indenture Trustee (in its
individual capacity, and as trustee under the Indenture), the Pass
Through Trustee (in its individual capacity, and as trustee under
the Pass Through Agreement) and the other Indemnitees under this
Agreement, the Indenture, the Pass Through Agreement and (in the
case of the Owner Participant only) the Tax Indemnity Agreement,
afford each such party substantially the same protection as
provided prior to such change of registry;
(H) that such change will not result in the imposition of, or
increase in the amount of, any Tax (which, for this purpose, includes
the loss of any tax benefits assumed by the Owner Participant to be
available to it based upon the assumptions set forth in Section 2 of
the Tax Indemnity Agreement) for which the Lessee has not agreed to
indemnify the Owner Participant to its reasonable satisfaction, the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee (or
any successor, assign or Affiliate thereof) and the Trust Estate;
(I) that any value added tax, customs duty, tariff or similar
governmental charge relating to the change in jurisdiction of
registration of the Aircraft shall have been paid in full or
adequately provided for by the Lessee to the satisfaction of the
Owner Trustee, the Indenture Trustee and the Owner Participant;
(J) of the payment by the Lessee of any reasonable fees and
expenses of the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee in connection with such change
of registry, including any reasonable attorneys' fees and expenses;
(K) that duties and tariffs, if applicable, shall have been paid
for by the Lessee;
(L) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft and the Trust
Indenture Estate, that all recordings and filings required to so
perfect the Lien of the Indenture have been duly effected, and that
no Liens (except Liens permitted under Section 6.01 of the Lease)
shall arise by reason of such registration; and
(M) that appropriate deregistration powers of attorney in favor of
the Owner Trustee and the Indenture Trustee have been executed and
delivered by the Lessee and any sublessee and, if necessary or
desirable for the effectiveness thereof, filed with the relevant
aeronautics authority; and
(ii) a favorable opinion of counsel (reasonably satisfactory to the
Owner Trustee, the Indenture Trustee and the Owner Participant) in the new
jurisdiction of registry, addressed and reasonably satisfactory to such
parties in scope, form and substance, to the effect:
(A) that the terms (including, without limitation, the governing
law, service-of-process and jurisdictional-submission provisions
thereof) of the Lease and the Indenture are legal, valid, binding and
enforceable in such jurisdiction against the Lessee, any sublessee,
the Owner Trustee and the Indenture Trustee, respectively;
(B) that it is not necessary for the Owner Participant, the Owner
Trustee, the Indenture Trustee or the Pass Through Trustee to
register or qualify to do business or meet other requirements not
already met in such jurisdiction in connection with the registration
in the new jurisdiction (and the filing and/or recordation therein of
the Indenture or the Lease) and the exercise of any rights or
remedies with respect to the Aircraft pursuant to the Lease or the
Indenture or in order to maintain such registration and the Lien of
the Indenture;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b)(i)(D)(x) of this Section 6.03) in respect of the
transactions contemplated hereby, including, without limitation, the
remedies provided in the Indenture and the Lease;
(D) that there is no tort liability of the beneficial owner,
record owner, lessor or mortgagee of an aircraft not in possession
thereof under the laws of such jurisdiction, other than tort
liability which might reasonably have been imposed on such owner,
lessor or mortgagee under the laws of the United States or any state
thereof (it being understood that, in the event such latter opinion
cannot be given in a form satisfactory to the Owner Trustee, the
Owner Participant and the Indenture Trustee, such opinion shall be
waived, if insurance reasonably satisfactory to the Owner
Participant, the Indenture Trustee and the Owner Trustee, in its
individual capacity, is provided, at the Lessee's expense, to cover
such risk and the Lessee undertakes to keep such insurance in full
force and effect);
(E) that the laws of such jurisdiction will not impair the rights
of the Lessor in and to the Aircraft or under the Lease and (unless
the Lessee shall have agreed to provide insurance reasonably
satisfactory to the Indenture Trustee and the Owner Participant
covering the risk of requisition of use of the Aircraft by the
government of registry of the Aircraft) require fair compensation by
the government of such jurisdiction payable in currency freely
convertible into United States dollars for the loss of use of the
Aircraft in the event of such requisition;
(F) that the Owner Trustee's title to the Aircraft is recognized
and fully enforceable in such jurisdiction, that such jurisdiction
will give effect to the title of the Aircraft therein substantially
to the same extent as does the Government, and that the Lien of the
Indenture shall continue as a first priority, duly perfected lien on
the Aircraft;
(G) to such further effect with respect to such other matters as
the Owner Participant, the Owner Trustee, or the Indenture Trustee may
reasonably request; and
(H) the Lien of the Indenture continues to constitute a first
priority, duly perfected Lien on the Aircraft.
(c) The Lessee shall promptly file any reports, or furnish to the
Owner Trustee and the Owner Participant such information as may be required
to enable the Owner Trustee and the Owner Participant timely to file any
reports required to be filed by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any governmental authority.
(d) The Lessee will cause the Special Aviation Counsel to file, and
where appropriate record, on the Delivery Date, AVSA's FAA ▇▇▇▇ of Sale,
the Lease, the Lease Supplement, the Trust Agreement, the Indenture and the
Indenture and Security Agreement Supplement. The following documents shall
be filed and, where appropriate, recorded on the Delivery Date with the
Aeronautics Authority in the following order of priority: first, AVSA's
FAA ▇▇▇▇ of Sale, second, the Application, with the Trust Agreement and the
Affidavits, third, the Indenture with the Indenture and Security Agreement
Supplement attached thereto, and fourth, the Lease with the Lease
Supplement, the Indenture and the Indenture and Security Agreement
Supplement attached thereto.
(e) The Lessee will furnish to the Owner Participant, the Owner
Trustee and the Indenture Trustee annually after the execution of this
Agreement, by March 15 of each year, commencing with the year 1998, an
opinion, reasonably satisfactory to the Owner Participant and the Indenture
Trustee, of Special Aviation Counsel, or other counsel specified from time
to time by the Lessee acceptable to the Lessor and the Indenture Trustee:
(i) stating either (1) that in the opinion of such counsel such action has
been taken with respect to the recording, filing, re-recording and
re-filing of the Lease, the Indenture, the Trust Agreement, and any
supplements to any of them and any financing statements, continuation
statements or other instruments, and all other action has been taken, as is
necessary to maintain the Owner Trustee's title to and interest in the
Aircraft and the Lessor's Estate as against the Lessee and any third
parties and to maintain the perfection of the security interests created by
said documents and reciting the details of such action, or (2) that in the
opinion of such counsel no such action is necessary to maintain such title
or the perfection of such security interests; (ii) specifying all other
action which needs to be taken during the succeeding 14 months in order to
maintain such title and the perfection of such security interests (which
the Lessee agrees timely to take); and (iii) stating that the Owner Trustee
is the owner of legal title to the Aircraft, and the Aircraft is free and
clear of all Liens, except the security interest created by the Indenture
and such as are permitted by the Lease and the Indenture.
(f) The Lessee shall at all times maintain its corporate existence
except as permitted by Section 6.03(g) hereof and all of its rights,
privileges and franchises necessary in the normal conduct of its business,
except for any corporate right, privilege or franchise (i) that it
determines, in its reasonable, good faith business judgment, is no longer
necessary or desirable in the conduct of its business and (ii) the loss of
which will not materially adversely affect or diminish the rights of the
Holders or the Owner Participant.
(g) The Lessee shall not enter into any merger or consolidation, or
convey, transfer or lease all or substantially all of its assets as an
entirety to any Person, unless the surviving corporation or Person which
acquires by conveyance, transfer or lease all or substantially all of the
assets of the Lessee as an entirety (i) is a domestic corporation organized
and existing under the laws of the United States or a political subdivision
thereof, (ii) is a Citizen of the United States, (iii) is a U.S. Air
Carrier, (iv) expressly assumes by an instrument in writing in form and
substance satisfactory to the Owner Participant, the Indenture Trustee and
the Owner Trustee all of the Lessee's obligations hereunder and under the
other Operative Agreements, and each other document contemplated hereby or
thereby and the Lessee delivers such instrument to the Indenture Trustee,
the Owner Participant and the Owner Trustee, (v) provides an opinion from
outside counsel to the Lessee which counsel shall be reasonably
satisfactory to the Owner Participant and the Indenture Trustee and which
opinion shall be reasonably satisfactory to the Owner Participant and the
Indenture Trustee, and an officer's certificate, each stating that such
merger, consolidation, conveyance, transfer or lease and the instrument
noted in clause (iv) above comply with this Section 6.03(g), that such
instrument is a legal, valid and binding obligation of, and is enforceable
against, such survivor or Person, and that all conditions precedent herein
provided for relating to such transaction have been complied with, and (vi)
immediately after such merger, consolidation or conveyance, transfer or
lease, as the case may be, the surviving company (or Person which acquires
by conveyance, transfer or lease the assets of the Lessee) is in compliance
with all of the terms and conditions of this Agreement and the Lease and
each other Operative Agreement and each other document contemplated hereby
or thereby; provided that no such merger, consolidation or conveyance,
transfer or lease shall be permitted if the same gives rise to an Event of
Default.
Upon any consolidation or merger, or any conveyance, transfer or
lease of all or substantially all of the assets of the Lessee and the
satisfaction of the conditions specified in this Section 6.03(g), the
successor corporation formed by such consolidation or into which the Lessee
is merged or the Person to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Lessee under this Agreement and the Lease and each other
Operative Agreement and any other document contemplated hereby and thereby
to which the Lessee is a party with the same effect as if such successor
corporation had been named as the Lessee herein and therein. No such
conveyance, transfer or lease of all or substantially all of the assets of
the Lessee as an entirety shall have the effect of releasing the Lessee or
any successor corporation which shall theretofore have become the Lessee
hereunder in the manner prescribed in this Section 6.03(g) from its
liability hereunder or under the other Operative Agreements. Nothing
contained herein shall permit any lease, sublease, or other arrangement for
the use, operation or possession of the Aircraft except in compliance with
the applicable provisions of the Lease.
(h) The Lessee agrees to give prompt written notice to the Owner
Participant, the Owner Trustee and the Indenture Trustee of any change in
the address of its chief executive office (as such term is used in Section
9-103(3) of the Tennessee Uniform Commercial Code) or of any change in its
corporate name.
(i) The Lessee agrees to furnish to the Owner Participant, the
Lessor and the Indenture Trustee:
(A) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Lessee, a
consolidated balance sheet as of the end of such fiscal year, and the
related consolidated statements of income, common stockholders'
equity, retained earnings and cash flows of the Lessee for the fiscal
year then ended as prepared and certified by the Lessee's independent
certified public accountants, including their opinion;
(B) within sixty (60) days after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Lessee,
a consolidated balance sheet of the Lessee prepared by it as of the
close of the accounting period then ended, together with the related
consolidated statements of income, retained earnings and cash flows
for such accounting period certified by the chief accounting officer
or a financial vice president of the Lessee;
(C) promptly upon their general transmission, copies of all
reports and statements furnished by the Lessee to its stockholders;
(D) promptly after filing with the SEC, copies of the Lessee's
Annual Reports on Form 10-K (including all corresponding annual
reports to shareholders), Quarterly Reports on Form 10-Q and, if
requested, any registration statement or prospectus filed by the
Lessee with any securities exchange or with the SEC;
(E) promptly upon (and in any event within five (5) Business Days
after) any officer of the Lessee obtaining knowledge of any condition
or event which constitutes a Default or an Event of Default, an
officer's certificate specifying the nature and period of existence
thereof and what action the Lessee has taken or is taking or proposes
to take with respect thereto;
(F) from time to time, such other financial information as the
Lessor, the Owner Participant or the Indenture Trustee may
reasonably request.
Concurrently with the delivery of the financial statements referred
to in clause (A) above, the Lessee shall deliver to the Lessor, the Owner
Participant, the Indenture Trustee and the Pass Through Trustee a certificate
of the Lessee, signed by any one of the President, the Chief Financial
Officer, the General Counsel, the Treasurer or the principal accounting
officer of the Lessee, stating that the signer, or an employee reporting to
same, is familiar with the relevant terms of this Agreement and the Lease and
the signer has reviewed, or has caused to be made under such Person's
supervision a review, of the activities of the Lessee and that, to the best of
his or her knowledge, there does not exist any Default or any Event of Default
or if a Default or an Event of Default exists or did exist, specifying the
nature thereof, the period of existence thereof and what action the Lessee has
taken or proposes to take with respect thereto.
Section 6.04. Survival of Representations and Warranties. The
representations and warranties of the Lessee provided in Sections 6.01 and
6.02 hereof and in any other Operative Agreement shall survive the Closings
hereunder and the delivery of the Aircraft and the expiration or other
termination of this Agreement and the other Operative Agreements.
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate. (a) [Reserved]
(b) Owner Participant. The Owner Participant represents and
warrants that its interest in the Lessor's Estate and the Trust Agreement is
being acquired by it for its own account and not with a view to resale or
distribution thereof; provided, however, that the disposition by the Owner
Participant of its interest in the Lessor's Estate and the Trust Agreement
shall, subject to the terms and provisions of Section 7.03(d) hereof (except
as provided in clause (ii) of Section 3.05(a) hereof), at all times be within
its control and the foregoing representation shall not limit the Owner
Participant's right to transfer or sell such interests pursuant to the terms
of this Agreement. Neither the Owner Participant nor anyone authorized to act
on its behalf has directly or indirectly offered any interest in the Lessor's
Estate or the Trust Agreement, or in any similar security, for sale to, or
solicited any offer to acquire any of the same from, anyone. The Owner
Participant further represents and warrants that neither it nor anyone
authorized to act on its behalf has made or will make any offer, solicitation
or sale of any interest in the Lessor's Estate or the Trust Agreement in
violation of the provisions of Section 5 of the Securities Act of 1933, as
amended. No representation in this Section 7.01(b) shall include any action
or inaction of the Lessee, First Chicago Leasing Corporation, the
Subordination Agent, the Underwriters or any Affiliates of any thereof whether
or not such action or inaction is purportedly on behalf of the Owner Trustee,
the Owner Participant or any of their Affiliates.
Section 7.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity and as Trustee, and the Owner Participant
severally represents and warrants that it is or will be a Citizen of the
United States on the Delivery Date. If the Owner Participant or the Owner
Trustee in its individual capacity does not comply with the requirements of
this Section 7.02, the Owner Trustee, the Indenture Trustee and the Owner
Participant hereby agree that a Default or an Event of Default shall not be
deemed to have occurred and be continuing under the Lease due to
non-compliance by the Lessee with the registration requirements in the Lease
occasioned by the noncompliance of the Owner Participant or the Owner Trustee.
(b) Owner Trustee. The Owner Trustee, in its individual capacity,
covenants that if at any time on or after the Delivery Date it shall have
actual knowledge that it has ceased to be a Citizen of the United States, it
will resign immediately as the Owner Trustee if such citizenship is necessary
under the Transportation Code as in effect at such time or, if it is not
necessary under the Transportation Code as in effect at such time, if it is
informed in writing by the Lessee, the Indenture Trustee or the Owner
Participant that such lack of United States citizenship would have any adverse
effect on the Lessee, the Indenture Trustee, the Holders or the Owner
Participant. The Owner Trustee, in its individual capacity, further covenants
that if at any time it appears reasonably probable that it will cease to be a
Citizen of the United States based on information that is (i) known to a
Responsible Officer or (ii) generally known to the public, it will promptly so
notify, to the extent permitted by law, all parties to this Agreement.
(c) Owner Participant. The Owner Participant agrees, solely for the
benefit of the Lessee, the Pass Through Trustee, the Indenture Trustee and the
Owner Trustee, that if at any time on or after the Delivery Date when the
Aircraft is registered or the Lessee proposes to register the Aircraft in the
United States (i) either it shall cease to be, or an event which has been
publicly disclosed has occurred of which the Owner Participant has knowledge
and which will cause the Owner Participant to cease to be, a Citizen of the
United States and (ii) the Aircraft shall or would therefore become ineligible
for registration in the name of the Owner Trustee under the Transportation
Code and regulations then applicable thereunder, then the Owner Participant
shall give notice thereof to the Lessee, the Owner Trustee and the Indenture
Trustee and shall (at its own expense and without any reimbursement or
indemnification from the Lessee) immediately (and in any event within a period
of 20 days) (x) effect a voting trust or other similar arrangement, (y)
transfer in accordance with the terms of this Agreement and the Trust
Agreement all its rights, title and interest in and to such Trust Agreement,
the Lessor's Estate and this Agreement, or (z) take any other alternative
action that would prevent any deregistration, or maintain or permit the United
States registration, of the Aircraft. It is agreed that the Owner Participant
shall be liable to pay promptly on request (A) to each of the other parties
hereto any actual damages (but not consequential damages) suffered by any such
other party to the extent the same shall result from the representation and
warranty of the Owner Participant in the first sentence of Section 7.02(a)
hereof proving to be untrue as of the Delivery Date; and (B) to the Lessee,
the Indenture Trustee or the Pass Through Trustee for any damages actually
(but not consequentially) incurred by the Lessee, the Indenture Trustee and
the Pass Through Trustee as a result of the Owner Participant's failure to
comply with its obligations pursuant to the first sentence of this Section
7.02(c); provided, that, the foregoing shall not restrict the Pass Through
Trustee or the Indenture Trustee from asserting against the Owner Participant
any damages actually incurred by the holders of any Pass Through Certificates.
Each party hereto agrees, upon the request and at the sole expense of the
Owner Participant, to cooperate with the Owner Participant in complying with
its obligations under the provisions of the first sentence of this Section
7.02(c), but without any obligation on the part of such other party to take
any action believed by it in good faith to be unreasonably burdensome to such
party or materially adverse to its business interests.
Section 7.03. Representations, Warranties and Covenants of Owner
Participant. (a) Representations, Warranties and Covenants. In addition to
and without limiting its other representations and warranties provided for in
this Article 7, the Owner Participant represents and warrants on the date
hereof and as of the Certificate Closing Date and the Delivery Date that:
(i) it is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware and it has full
corporate power, authority and legal right to carry on its present business
and operations, to own or lease its Properties and to enter into and to
carry out the transactions contemplated by this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative Agreements
to which it is party;
(ii) the execution, delivery and performance by it of this
Agreement, the Tax Indemnity Agreement, and the Trust Agreement and the
other Operative Agreements to which it is party have been duly authorized
by all necessary corporate action on its part and, assuming the accuracy of
the Lessee's representations in Section 6.01(o) hereof, do not require any
governmental approvals that would be required to be obtained by the Owner
Participant;
(iii) based on the representations, warranties and covenants
contained in Sections 6.01(m)(viii), 6.02 and 7.09 hereof and compliance
with Section 10.06 of the Indenture, neither the execution, delivery or
performance by the Owner Participant of this Agreement, the Tax Indemnity
Agreement, and the Trust Agreement and the other Operative Agreements to
which it is party nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent or approval under any law, governmental rule or
regulation applicable to the Owner Participant or the charter documents,
as amended, or bylaws, as amended, of the Owner Participant or any
order, writ, injunction or decree of any court or governmental authority
against the Owner Participant or by which it or any of its Properties is
bound or any indenture, mortgage or contract or other agreement or
instrument to which the Owner Participant is a party or by which it or
any of its Properties is bound, or constitutes or will constitute a
default thereunder or results or will result in the imposition of any
Lien upon any of its Properties;
(iv) this Agreement, the Tax Indemnity Agreement and the Trust
Agreement and the other Operative Agreements to which it is party have been
or on the Certificate Closing Date will be duly executed and delivered by
the Owner Participant and constitute or on the Certificate Closing Date
will constitute the legal, valid and binding obligation of the Owner
Participant enforceable against it in accordance with their terms except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws or equitable principles of general
application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(v) it is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Owner
Participant is a party or by which it or any of its Properties may be
bound, or in violation of any applicable law, which default or violation
would have a material adverse effect on the financial condition, business
or operations of the Owner Participant or an adverse effect on the ability
of the Owner Participant to perform its obligations under this Agreement
and the other Operative Agreements to which it is or is to be a party;
(vi) there are no pending or, to the knowledge of the Owner
Participant, threatened actions, suits, investigations or proceedings
against the Owner Participant before any court, administrative agency or
tribunal which are expected to materially adversely affect the ability of
the Owner Participant to perform its obligations under this Agreement and
the other Operative Agreements to which it is or is to be a party and the
Owner Participant knows of no pending or threatened actions or proceedings
before any court, administrative agency or tribunal involving it in
connection with the transactions contemplated by the Operative Agreements;
(vii) neither the execution and delivery by it of this Agreement or
the other Operative Agreements to which it is a party nor the performance
of its obligations hereunder or thereunder requires the consent or approval
of or the giving of notice to, the registration with, or the taking of any
other action in respect of, any governmental authority or agency that would
be required to be obtained or taken by the Owner Participant except for
filings contemplated by this Agreement;
(viii) no part of the funds to be used by it to acquire the interests
to be acquired by the Owner Participant under this Agreement constitutes
assets (within the meaning of ERISA and any applicable rules and
regulations) of any employee benefit plan subject to Title I of ERISA or of
any plan or individual retirement account subject to Section 4975 of the
Code; and
(ix) it is a "U.S. Person" as defined in Section 7701(a)(30) of the
Code and is not a tax resident of another country.
Notwithstanding the foregoing or anything else contained in this
Agreement, the Owner Participant makes no representation or warranty in this
Agreement with respect to laws, rules or regulations relating to aviation or
to the nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship, design,
patent or trademark infringement, operation, merchantability or fitness for
use of the Aircraft, other than such laws, rules or regulations relating to
the citizenship requirements of the Owner Participant under applicable
aviation law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens attributable to it (or
an Affiliate thereof) and that there will not be any Lessor's Lien
attributable to it (or an Affiliate thereof) on the Certificate Closing Date.
The Owner Participant agrees with and for the benefit of the Lessee, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee that the Owner
Participant will, at its own cost and expense, take such action as may be
necessary (by bonding or otherwise, so long as neither the Lessee's operation
and use of the Aircraft nor the validity and priority of the Lien of the
Indenture is impaired) to duly discharge and satisfy in full, promptly after
the same first becomes known to the Owner Participant, any Lessor's Lien
attributable to the Owner Participant (or an Affiliate thereof), provided,
however, that the Owner Participant shall not be required to discharge or
satisfy such Lessor's Lien which is being contested by the Owner Participant
in good faith and by appropriate proceedings so long as such proceedings do
not involve any material danger of the sale, forfeiture or loss of the
Aircraft or the Lessor's Estate or the Trust Indenture Estate or any interest
in any thereof or otherwise materially adversely affect the validity or
priority of the Lien of the Indenture.
(c) Reimbursement. Without limiting any other rights the parties
hereto may have as a result of any breach by the Owner Participant of its
obligations in Section 7.03(b) hereof, the Owner Participant agrees to
reimburse each other party hereto for all reasonable legal fees and expenses
of counsel that may be incurred by any such party as a result of the failure
of the Owner Participant to discharge and satisfy any such Lessor's Lien in
accordance with the terms of Section 7.03(b) hereof.
(d) Assignment of Interests of Owner Participant. At any time after
the Delivery Date (or upon the direction of the Lessee if Section 3.05(a)(i)
hereof shall be applicable), and subject to the conditions set forth in this
Section 7.03(d), the Owner Participant may assign, convey or otherwise
transfer to a single institutional investor or an Affiliate of an
institutional investor all (but not less than all) of the Beneficial Interest,
provided that it gives the Lessee and the Indenture Trustee at least 10
Business Days' notice of such assignment, conveyance or other transfer and
provided further that the Owner Participant and any Owner Participant
Guarantor shall remain liable for all obligations of the Owner Participant
under the Trust Agreement and the Operative Agreements to which the Owner
Participant is a party to the extent (but only to the extent) relating to the
period on or before the date of such transfer and provided that the transferee
agrees by a written instrument substantially in the form attached hereto as
Exhibit G-1 to assume primary liability for all obligations as an Owner
Participant under the Trust Agreement and the other Operative Agreements to
which such Owner Participant is a party relating to the period after the date
of transfer. Any such transferee shall (a) be (i) a bank, savings
institution, finance company, leasing company or trust company, national
banking association acting for its own account or in a fiduciary capacity as
trustee or agent under any pension, retirement, profit sharing or similar
trust or fund, insurance company, fraternal benefit society or corporation
acting for its own account having a combined capital and surplus (or, if
applicable, consolidated tangible net worth or its equivalent) of not less
than $75,000,000, (ii) a subsidiary of any Person described in clause (i)
where such Person provides (A) support for the obligations assumed by such
transferee subsidiary reasonably satisfactory to the Lessee, the Owner Trustee
and the Indenture Trustee or (B) an unconditional guaranty substantially in
the form of Exhibit G-2 attached hereto of such transferee subsidiary's
obligations, or (iii) an Affiliate of the transferring Owner Participant, so
long as such Affiliate has a combined capital and surplus (or, if applicable,
consolidated tangible net worth or its equivalent) of not less than
$75,000,000, (b) be legally capable of binding itself to the obligations of
the Owner Participant and shall expressly agree to assume all obligations of
the Owner Participant under the Trust Agreement and this Agreement and (c)
provide representations substantially similar to those contained in Sections
7.02(a) and 7.03(a) hereof. In the event of any such assignment, conveyance
or transfer, the transferee shall become a party to the Trust Agreement and
shall agree to be bound by all the terms of and will undertake all of the
obligations of the Owner Participant contained in the Trust Agreement and the
other Operative Agreements in the manner set forth in the form attached as
Exhibit G-1. A transferee hereunder shall be (i) a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (or any successor provision thereto) and
such transferee shall be personally liable for any debt service to the extent
that its receipt of rentals is reduced by reason of any withholding Taxes that
result from such transferee's failure to be such a "U.S. Person" and (ii) a
Citizen of the United States or has established a voting trust, voting powers
or other arrangement reasonably satisfactory to the Indenture Trustee and the
Lessee to permit the Owner Trustee to be the registered owner of the Aircraft
under the Transportation Code. A transferee hereunder shall not be, and in
acquiring the Beneficial Interest shall not use the assets of, an employee
benefit plan subject to Title I of ERISA or an individual retirement account
or a plan subject to Section 4975 of the Code. Assuming the truth of the
representations made in Sections 6.01(m) and 7.06 hereof and compliance with
Section 10.06 of the Indenture, no such assignment, conveyance or transfer
shall violate any provision of law or regulation or create a relationship
which would be in violation thereof. The Owner Trustee shall not be on notice
of or otherwise bound by any such assignment, conveyance or transfer unless
and until it shall have received an executed counterpart of the instrument of
such assignment, conveyance or transfer. Upon any such disposition by the
Owner Participant to a transferee as above provided, the transferee shall be
deemed the "Owner Participant" or "Trustor" for all purposes of the Operative
Agreements, and shall be deemed to have made all the payments previously made
by its transferor and to have acquired the same interest in the Lessor's
Estate as theretofore held by its transferor; and each reference therein to
the "Owner Participant" or "Trustor" shall thereafter be deemed a reference
to such transferee. Notwithstanding anything to the contrary contained in
this Section 7.03(d), in no event shall the Owner Participant transfer its
interest in the Beneficial Interest to any entity whose business is that of
a nationwide or worldwide overnight or expedited delivery small package air
courier, cargo or freight deliverer or which competes with the Lessee in
such lines of business. The Lessee agrees that it will reasonably
cooperate with the Owner Participant in effecting an assignment of the
Owner Participant's interests including, without limitation, providing
letters to any successor Owner Participant permitting such successor Owner
Participant to rely on any opinions provided by the Lessee on the Delivery
Date.
(e) Actions with Respect to Lessor's Estate, Etc. The Owner
Participant agrees that it will not take any action to subject the Lessor's
Estate or the trust established by the Trust Agreement, as debtor, to the
reorganization or liquidation provisions of the Bankruptcy Code or any other
applicable bankruptcy or insolvency statute.
Section 7.04. Representations, Covenants and Warranties of SSB and
the Owner Trustee. (a) In addition to and without limiting its other
representations and warranties provided for in this Article 7, SSB represents
and warrants, in its individual capacity with respect to items (i), (ii),
(iii)(A), (iv), (v), (vi) and (vii) below, and as the Owner Trustee with
respect to items (iii)(B) and (iv) on the date hereof and as of the
Certificate Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
with its principal place of business and chief executive office (as such
terms are used in Article 9 of the Uniform Commercial Code) at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department
and has full corporate power and authority, in its individual capacity or
(assuming the Trust Agreement has been duly authorized, executed and
delivered by the Owner Participant) as the Owner Trustee, as the case may
be, to carry on its business as now conducted, and to execute, deliver and
perform this Agreement and the Operative Agreements to which it is or is to
be a party;
(ii) the execution, delivery and performance by SSB, either in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement and the Operative Agreements to which it is or is to be party
have been duly authorized by all necessary corporate action on its part,
and do not contravene its articles of association or by-laws; each of this
Agreement and the other Operative Agreements to which it is or is to be a
party has been duly authorized, and has been duly executed and delivered
or, in the case of the Operative Agreements identified in Section 4.02(c)
hereof, will on the Delivery Date be duly executed and delivered by SSB,
either in its individual capacity or as the Owner Trustee, as the case may
be, and neither the execution and delivery thereof nor SSB's performance
of or compliance with any of the terms and provisions thereof will violate
any Federal or Connecticut law or regulation governing SSB's banking or
trust powers;
(iii) (A) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or is
to be party when duly executed and delivered will, to the extent each such
document is entered into by SSB in its individual capacity, constitute the
legal, valid and binding obligation of SSB in its individual capacity
enforceable against it in such capacity in accordance with its respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and the performance by SSB in its individual capacity of
any of its obligations thereunder does not contravene any lease, regulation
or contractual restriction binding on SSB in its individual capacity;
(B) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or
is to be party when duly executed and delivered will, to the extent each
such document is entered into by the Owner Trustee in its trust
capacity, constitute the legal, valid and binding obligation of the
Owner Trustee enforceable against it in such capacity in accordance with
its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights (regardless of whether enforceability
is considered in a proceeding in equity or at law), and the performance
by the Owner Trustee of any of its obligations thereunder does not
contravene any lease, regulation or contractual restriction binding on
the Owner Trustee;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against SSB before any court or administrative agency
which would materially and adversely affect the ability of SSB, either
in its individual capacity or as the Owner Trustee, as the case may be,
to perform its obligations under the Operative Agreements to which it is
or is to be party;
(v) it shall give the Lessee, the Indenture Trustee and the Owner
Participant at least thirty (30) days' prior written notice in the event of
any change in its chief executive office or name;
(vi) neither the execution and delivery by it, either in its
individual capacity or as the Owner Trustee, as the case may be, of any of
the Operative Agreements to which it is or is to be a party, requires on
the part of SSB in its individual capacity or any of its Affiliates the
consent or approval of or the giving of notice to, the registration with,
or the taking of any other action in respect of, any Federal or Connecticut
governmental authority or agency governing its banking or trust powers; and
(vii) on the Certificate Closing Date, the proceeds arising from the
issuance and sale of the Certificates shall be free of Lessor's Liens
attributable to SSB in its individual capacity and on the Delivery Date the
Owner Trustee shall be holding whatever title to the Aircraft as was
conveyed to it by AVSA, the Aircraft shall be free of Lessor's Liens
attributable to SSB in its individual capacity and SSB in its individual
capacity is a Citizen of the United States.
(b) Lessor's Liens. SSB, in its individual capacity, further
represents, warrants and covenants that there are no Lessor's Liens
attributable to it in its individual capacity and that there will not be any
such Lessor's Liens on the Certificate Closing Date or the Delivery Date. The
Owner Trustee, in its trust capacity, and at the cost and expense of the
Lessee, covenants that it will in its trust capacity promptly, and in any
event within 30 days after the same shall first become known to it, take such
action as may be necessary to discharge duly any Lessor's Liens attributable
to it in its trust capacity. SSB, in its individual capacity, covenants and
agrees that it will at its own expense take such action as may be necessary to
duly discharge and satisfy in full, promptly, and in any event within 30 days
after the same shall first become known to it, any Lessor's Liens attributable
to it in its individual capacity which may arise at any time after the date of
this Agreement.
(c) Indemnity for Lessor's Liens. SSB, in its individual capacity,
agrees to indemnify and hold harmless the Lessee, the Indenture Trustee, the
Owner Participant and the Pass Through Trustee and the Owner Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Pass Through Trustee or the
Owner Trustee as a result of the failure of SSB to discharge and satisfy any
Lessor's Liens attributable to it in its individual capacity, as described in
Section 7.04(b) hereof.
(d) Securities Act. None of SSB, the Owner Trustee or any Person
authorized by either of them to act on its behalf has directly or indirectly
offered or sold or will directly or indirectly offer or sell any interest in
the Lessor's Estate, or in any similar security relating to the Lessor's
Estate, or in any security the offering of which for purposes of the
Securities Act of 1933, as amended, would be deemed to be part of the same
offering as the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person.
(e) Actions With Respect to Lessor's Estate, Etc. Neither SSB, in
its individual capacity, nor the Owner Trustee will take any action to subject
the Lessor's Estate or the trust established by the Trust Agreement, as
debtor, to the reorganization or liquidation provisions of the Bankruptcy Code
or any other applicable bankruptcy or insolvency statute.
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee. (a) The Indenture Trustee in its individual capacity (other
than as the Pass Through Trustee) represents on the date hereof and as of the
Certificate Closing Date and the Delivery Date as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Indenture, this Agreement and the other Operative Agreements to
which it is a party and to authenticate the Certificates to be delivered on
the Certificate Closing Date;
(ii) the Indenture and this Agreement and the other Operative
Agreements to which it is or is to be a party, and the authentication of
the Certificates to be delivered on the Certificate Closing Date, have been
duly authorized by all necessary corporate action on its part, and neither
the execution and delivery thereof nor its performance of any of the terms
and provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under, its articles of association or
by-laws;
(iii) each of the Indenture and this Agreement, and the other
Operative Agreements to which it is or is to be a party, has been duly
executed and delivered or, in the case of the Operative Agreements
identified in Section 4.02(c) hereof, will on the Delivery Date be executed
and delivered by it and, assuming that each such agreement is the legal,
valid and binding obligation of each other party thereto, is (or will be,
as the case may be), the legal, valid and binding obligation of the
Indenture Trustee, enforceable against the Indenture Trustee in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(iv) neither the execution and delivery by it of the Indenture and
this Agreement and the other Operative Agreements to which it is or is to
be a party, nor the performance by it of any of the transactions
contemplated hereby or thereby, requires the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any Federal or state governmental authority or agency
governing its banking and trust powers; and
(v) on the Certificate Closing Date, the Indenture Trustee holds
the Liquid Collateral on behalf of the Owner Trustee and on the Delivery
Date, the Indenture Trustee will hold the original counterparts of the
Lease and the Lease Supplement.
(b) Indenture Trustee's Liens. The Indenture Trustee, in its
individual capacity, further represents, warrants and covenants that there are
no Indenture Trustee's Liens attributable to it in its individual capacity and
that there will not be any Indenture Trustee's Liens on the Certificate
Closing Date or, as at and following the Delivery Date, the Aircraft. The
Indenture Trustee, in its individual capacity, covenants and agrees that it
will at its own expense take such action as may be necessary to duly discharge
and satisfy in full, promptly, and in any event within 30 days, after the same
shall first become known to it, any Indenture Trustee's Liens.
(c) Indemnity for Indenture Trustee's Liens. The Indenture Trustee,
in its individual capacity, agrees to indemnify and hold harmless the Lessee,
the Owner Participant, the Owner Trustee and the Pass Through Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Owner Trustee or the Pass
Through Trustee as a result of the failure of the Indenture Trustee to
discharge and satisfy any Indenture Trustee's Liens attributable to it in its
individual capacity, as described in Section 7.05(b) hereof.
Section 7.06. Indenture Trustee's Notice of Default. The Indenture
Trustee agrees to give the Owner Participant notice of any Default or Event of
Default promptly upon a Responsible Officer of the Indenture Trustee having
actual knowledge thereof.
Section 7.07. Releases from Indenture. The Indenture Trustee
covenants and agrees, for the benefit of the Lessee and the Owner Participant,
to execute and deliver the instruments of release from the Lien of the
Indenture which it is required to execute and deliver in accordance with the
provisions of Article XIV of the Indenture, and the Owner Participant agrees,
for the benefit of the Lessee, to cause the Owner Trustee to request the
Indenture Trustee to execute and deliver such instruments of release upon
written notice from the Lessee to make such request.
Section 7.08. Covenant of Quiet Enjoyment. Each of the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the Owner
Trustee covenants and agrees as to itself only that, so long as no Event of
Default under the Lease has occurred and is continuing, neither the Owner
Participant (or the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be) nor any Person lawfully claiming through the
Owner Participant (or the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, as the case may be) shall interfere with the Lessee's right
quietly to enjoy the Aircraft during the Term without hindrance or disturbance
by the Owner Participant (or the Owner Trustee, the Pass Through Trustee or
the Indenture Trustee, as the case may be).
Section 7.09. Pass Through Trustee's Representations and Warranties.
The Pass Through Trustee, in its individual capacity (except with respect to
clause (iii) below), represents and warrants as of the date hereof (except as
otherwise provided), as of the Pass Through Closing Date, the Certificate
Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Pass Through Agreement, the Series Supplements, the Intercreditor
Agreement and this Agreement and to execute and authenticate the Pass
Through Certificates to be delivered on the Pass Through Closing Date;
(ii) the execution, delivery and performance of this Agreement,
the Pass Through Agreement and the Series Supplements and the
performance of its obligations hereunder and thereunder (including the
execution and authentication of the Pass Through Certificates to be
delivered on the Pass Through Closing Date) have been fully authorized
by all necessary corporate action on its part, and, subject to (A) the
registration of the issuance and sale of the Pass Through Certificates
under the Securities Act, (B) compliance with any applicable state
securities laws and (C) the qualification of the Pass Through Agreement
under the Trust Indenture Act, neither the execution and delivery
thereof nor its performance of any of the terms and provisions thereof
will violate any Federal or Utah law or regulation relating to its
banking or trust powers or contravene or result in any breach of, or
constitute any default under its articles of association, or bylaws or
the provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it or its properties may be bound or
affected; and
(iii) each of this Agreement and the Pass Through Agreement has
been, and as of the Pass Through Closing Date the Series Supplements
will be, duly executed and delivered by it (in its individual and trust
capacities) and, assuming that each such agreement is the legal, valid
and binding obligation of each other party thereto, is or will be, as
the case may be, the legal, valid and binding obligation of the Pass
Through Trustee (in its individual and trust capacities), enforceable in
accordance with its respective terms except as limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 7.10. Survival of Representations, Warranties and Covenants.
The representations, warranties and covenants of the Owner Participant, the
Owner Trustee (in its individual or trust capacity), the Pass Through Trustee
(in its individual or trust capacity), the Indenture Trustee (in its
individual or trust capacity) and the Subordination Agent (in its individual
or trust capacity) provided for in this Article 7, and their respective
obligations under any and all of them, shall survive the Closings, the
delivery of the Aircraft and the expiration or other termination of this
Agreement, and the other Operative Agreements.
Section 7.11. Lessee's Assumption of the Certificates. (a) Subject
to compliance by the Lessee with all of its obligations under the Operative
Agreements, each of the Owner Participant, the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Lessee covenants and agrees that if
the Lessee elects to terminate the Lease and to purchase the Aircraft pursuant
to Section 4.02(a)(A), (D) or (E) of the Lease, and so long as no Event of
Default shall have occurred and be continuing then, upon compliance with the
applicable provisions of said Section 4.02(a) of the Lease, the Owner Trustee
will transfer to the Lessee, without recourse or warranty (except as to the
absence of Lessor's Liens attributable to the Owner Trustee) but subject to
the Lien of the Indenture, all of the Owner Trustee's right, title and
interest in and to the Aircraft, and if the Lessee, in connection with such
purchase, elects pursuant to Section 4.02(a)(A), (D) or (E) of the Lease to
assume the obligations of the Owner Trustee to the Indenture Trustee and the
Holders under the Indenture, the Certificates and hereunder, then the Lessee
shall so notify the Indenture Trustee (such notice to be given at least 30 and
not more than 60 days prior to the effective date of such assumption), and
each of the parties shall execute and deliver appropriate documentation
permitting the Lessee to assume such obligations on the basis of full recourse
to the Lessee, maintaining for the benefit of the Holders the security
interest in the Aircraft created by the Indenture, and upon compliance with
the provisions of this Section 7.11 releasing the Owner Participant and the
Owner Trustee from all obligations in respect of the Certificates, the
Indenture, this Agreement and the other Operative Agreements, except any
obligations relating to the period prior to such assumption and take all
such other actions, at the Lessee's expense, as are reasonably necessary to
permit such assumption by the Lessee.
(b) In connection with such assumption:
(i) the Lessee shall execute and deliver an instrument satisfactory
in form and substance to the Indenture Trustee (A) pursuant to which the
Lessee irrevocably and unconditionally assumes and undertakes, with full
recourse to the Lessee, to pay, satisfy and discharge when and as due (at
the stated maturity thereof, by acceleration or otherwise) the principal
of, Make-Whole Premium, if any, interest and all other sums owing on all
Outstanding Certificates (or on the Lessee's substituted obligations) in
accordance with their terms and to punctually perform and observe all of
the covenants and obligations hereunder and under the Indenture and the
Certificates (as the same may be amended in connection with such
assumption) to be performed or observed by the Owner Trustee and (B) which
contains amendments to the Indenture, in form and substance satisfactory to
the Holders and the Indenture Trustee, that incorporate therein such
provisions from the Lease and this Agreement as may be appropriate,
including, without limitation, events of default substantially identical in
scope and effect to those set forth in the Lease and covenants
substantially identical to the covenants of the Lessee hereunder and under
the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
7.11(b), any Uniform Commercial Code financing statements relating thereto,
and any other documents which shall be necessary (or reasonably requested
by the Indenture Trustee) to establish the Lessee's title to and interest
in the Aircraft or to reflect the substitution of the Lessee for the Owner
Trustee under the Operative Agreements or to continue the perfection of the
security interests in the Aircraft and the other rights, Property and
interests included in the Trust Indenture Estate for the benefit of the
Holders (or the Lessee's substituted obligations) shall be filed in such
form, manner and places as are necessary or, in the reasonable opinion of
the Indenture Trustee, advisable for such purpose;
(iii) the Indenture Trustee shall have received an insurance report
dated the effective date of such assumption of an independent insurance
broker and certificates of insurance, each in form and substance
satisfactory to the Indenture Trustee, as to the due compliance as of the
effective date of such assumption with the terms of Article 13 of the Lease
(as it relates to the Indenture Trustee) relating to the insurance with
respect to the Aircraft;
(iv) the Indenture Trustee shall have received evidence that as of
the effectiveness of the assignment on the date of such assumption the
Aircraft is free and clear of all Liens other than the Lien of the
Indenture and other Permitted Liens;
(v) the Indenture Trustee shall have received a certificate from
the Lessee that no Event of Default shall have occurred and be continuing
as of the effective date of such assumption; and
(vi) the Indenture Trustee shall have received (A) from counsel for
the Lessee (who may be the Lessee's General Counsel) a legal opinion, in
form and substance satisfactory to the Indenture Trustee (w) with respect
to the compliance of the assumption contemplated hereby with the terms,
provisions and conditions hereof, (x) with respect to the due
authorization, execution, delivery, validity and enforceability of the
instrument referred to in paragraph (i) of this Section 7.11(b), (y)
with respect to the continued perfection of the first and prior Lien and
security interest in the Aircraft for the benefit of the Holders of the
Certificates (or the Lessee's substituted obligations) referred to in
paragraph (ii) of this Section 7.11(b) and (z) with respect to the
continued availability of the benefits of Section 1110 of the Bankruptcy
Code to the Indenture Trustee for the benefit of the Holders with
respect to the Aircraft after giving effect to such assumption, (B) from
counsel to the Indenture Trustee and Special Aviation Counsel, a legal
opinion comparable to the respective opinions delivered on the
Certificate Closing Date or the Delivery Date, as the case may be, with
such changes therein as may be appropriate in light of such assumption,
and (C) in the case of each opinion described in clause (A) or (B)
above, covering such additional matters as the Indenture Trustee shall
reasonably request.
(c) The Lessee shall pay all reasonable expenses (including
reasonable fees and expenses of counsel) of the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee and the Owner Participant in connection with
such assumption.
Section 7.12. Indebtedness of Owner Trustee. So long as the
Indenture is in effect, the Owner Trustee, not in its individual capacity, but
solely as trustee under the Trust Agreement, shall not incur any indebtedness
for borrowed money except as expressly contemplated herein or in any other
Operative Agreement (excluding the Tax Indemnity Agreement) and shall not
engage in any business or other activity other than the transactions
contemplated herein or in any other Operative Agreement (excluding the Tax
Indemnity Agreement) and all necessary or appropriate activity related
thereto.
Section 7.13. Compliance with Trust Agreement, Etc. Each of the
Owner Participant, SSB and the Owner Trustee agrees with the Lessee, the
Indenture Trustee and the Pass Through Trustee that so long as the Lien of the
Indenture shall be in effect it will (i) comply with all of the terms of the
Trust Agreement applicable to it in its respective capacity, the noncompliance
with which would materially adversely affect any such party and (ii) not take
any action, or cause any action to be taken, to amend, modify or supplement
any other provision of the Trust Agreement in a manner that would materially
adversely affect any such party without the prior written consent of such
party. The Owner Trustee confirms for the benefit of the Lessee, the
Indenture Trustee and the Pass Through Trustee that it will comply with the
provisions of Article 2 of the Trust Agreement. Notwithstanding anything else
to the contrary in the Trust Agreement, so long as the Lease remains in
effect, the Owner Participant agrees not to terminate or revoke the trust
created by the Trust Agreement without the consent of the Lessee. If and so
long as the Indenture shall not have been discharged the consent of the
Indenture Trustee shall also be required prior to any termination or
revocation of such trust and in addition, the Owner Participant will, at the
Lessee's expense, promptly and duly execute and deliver to the Indenture
Trustee such documents and assurances including, without limitation,
conveyances, financing statements and continuation statements with respect to
financing statements and take such further action as the Indenture Trustee may
from time to time reasonably request and furnish in order to protect the
rights and remedies created or intended to be created in favor of the
Indenture Trustee under the Indenture and to create for the benefit of the
Certificate Holders a valid first priority Lien with respect to, and a first
and prior perfected security interest in, the Trust Indenture Estate.
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants. (a) Representations and Warranties. The Subordination Agent
represents and warrants as of the date hereof (except as otherwise provided),
as of the Pass Through Closing Date, the Certificate Closing Date and the
Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the corporate power and authority to enter into and perform its
obligations under this Agreement, the Liquidity Facilities and the
Intercreditor Agreement;
(ii) the execution, delivery and performance of this Agreement, each
of the Liquidity Facilities and the Intercreditor Agreement and the
performance of its obligations hereunder and thereunder have been fully
authorized by all necessary corporate action on its part, and, neither the
execution and delivery thereof nor its performance of any of the terms and
provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under its articles of association, or
bylaws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it or its properties may be
bound or affected;
(iii) each of this Agreement, the Liquidity Facilities and the
Intercreditor Agreement has been duly executed and delivered by it and,
assuming that each such agreement is the legal, valid and binding
obligation of each other party thereto, is or will be, as the case may be,
the legal, valid and binding obligation of the Subordination Agent,
enforceable in accordance with its respective terms except as limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the enforcement
of creditors' rights generally (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(iv) there are no Taxes payable by the Subordination Agent imposed
by the State of Utah or any political subdivision or taxing authority
thereof in connection with the execution, delivery and performance by
the Subordination Agent of this Agreement, any of the Liquidity
Facilities or the Intercreditor Agreement (other than franchise or other
taxes based on or measured by any fees or compensation received by the
Subordination Agent for services rendered in connection with the
transactions contemplated by the Intercreditor Agreement or any of the
Liquidity Facilities), and there are no Taxes payable by the
Subordination Agent imposed by the State of Utah or any political
subdivision thereof in connection with the acquisition, possession or
ownership by the Subordination Agent of any of the Certificates other
than franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered
in connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities);
(v) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent to
perform its obligations under this Agreement, the Intercreditor Agreement
or any Liquidity Facility;
(vi) the Subordination Agent has not directly or indirectly offered
any Certificate for sale to any Person or solicited any offer to acquire
any Certificates from any Person, nor has the Subordination Agent
authorized anyone to act on its behalf to offer directly or indirectly any
Certificate for sale to any Person, or to solicit any offer to acquire any
Certificate from any Person; and the Subordination Agent is not in default
under any Liquidity Facility; and
(vii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter or the Lessee.
(b) Covenants. (i) The Subordination Agent agrees not to amend any
Liquidity Facility without the consent of the Lessee (so long as no Event of
Default shall have occurred and be continuing) and of the Owner Participant
(such consents not to be unreasonably withheld).
(ii) In connection with the deposit in the applicable Cash
Account of amounts drawn pursuant to any Downgrade Drawing under a
Liquidity Facility, the Subordination Agent agrees, so long as no Event of
Default shall have occurred and be continuing, to pay to the Lessee
promptly following each Regular Distribution Date any Investment Earnings
on the amount so deposited which remain after application of such
Investment Earnings pursuant to Section 2.06 of such Liquidity Facility to
the interest payable on such Downgrade Drawing under Section 3.07 of such
Liquidity Facility. Capitalized terms used in this Section shall have the
meanings specified in the Intercreditor Agreement.
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes. (a) Generally. The
Lessee agrees promptly to pay when due, and to indemnify and hold each
Indemnitee harmless from all license, recording, documentary, registration and
other fees and all taxes (including, without limitation, income, gross
receipts, sales, rental, use, value added, property (tangible and intangible),
ad valorem, excise and stamp taxes), fees, levies, imposts, recording duties,
duties, charges, assessments or withholdings of any nature whatsoever,
together with any assessments, penalties, fines, additions to tax or interest
thereon (individually, a "Tax," and collectively called "Taxes"), however
imposed or asserted (whether imposed upon any Indemnitee, the Lessee, all or
any part of the Aircraft, Airframe, any Engine or any Part or the Lessor's
Estate, the Trust Indenture Estate, Rent, the Certificates or otherwise upon
or with respect to any Operative Agreement, any payments thereunder or
otherwise in connection therewith), by any Federal, state or local government
or taxing authority in the United States, or by any government or taxing
authority of a foreign country or of any political subdivision or taxing
authority thereof or by a territory or possession of the United States or an
international taxing authority relating to or measured by:
(i) the construction, mortgaging, financing, refinancing, purchase,
acceptance, rejection, delivery, nondelivery, transport, location, ownership,
registration, reregistration, deregistration, insuring, assembly, possession,
repossession, operation, use, non-use, condition, maintenance, repair,
improvement, conversion, sale, return, abandonment, preparation, installation,
storage, redelivery, replacement, manufacture, leasing, subleasing,
sub-subleasing, modification, alteration, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application or
disposition of, or the imposition of any Lien (or the incurrence of any
liability to refund or pay over any amount as a result of any Lien) on, the
Aircraft, the Airframe, any Engine or any Part or any interest therein;
(ii) amounts payable under the Operative Agreements;
(iii) the Property, or the income or other proceeds received with
respect to the Property attributable to the transactions contemplated by
the Operative Agreements, held by the Owner Trustee under the Trust
Agreement or after an Event of Default under the Lease, or by the Indenture
Trustee under the Indenture;
(iv) otherwise with respect to any Operative Agreement, any
interest therein or by reason of the transactions described in or
contemplated by the Operative Agreements;
(v) the principal or interest or other amounts payable with respect
to the Certificates;
(vi) the Pass Through Certificates or the Certificates or the
issuance, sale, acquisition, reoptimization, or refinancing thereof or the
beneficial interests in the Trust Estate or the Trust Indenture Estate or
the creation thereof under the Trust Agreement or the Indenture, or the
security interest created or perfected thereby or by any filing thereof;
(vii) any assumption by the Lessee pursuant to Section 7.11 of this
Agreement and Section 2.12 of the Indenture;
(viii) the Aircraft, the Airframe, any Engine or any Part; or
(ix) the rentals (including Basic Rent, Renewal Rent and
Supplemental Rent), receipts or earnings arising from the Operative
Agreements.
(b) Exceptions. The indemnity provided for in Section 8.01(a) shall
not extend to any of the following:
(i) With respect to an Indemnitee, Taxes based upon, measured by or
with respect to the net or gross income, items of tax preference or minimum
tax or excess profits, receipts, value-added taxes, capital, franchise, net
worth (whether denominated income, excise, capital stock, or doing
business taxes) or other similarly-based taxes (other than sales, use,
transfer, rental, ad valorem, stamp, property, or similar taxes) ("Income
Taxes"), provided, however, that this clause (i) shall not exclude from the
indemnity described in Section 8.01(a) above any such Income Taxes to the
extent such taxes are imposed by any jurisdiction in which the Indemnitee
would not be subject to such taxes but for, or would be subject to such
taxes solely as a result of, (x) the operation, registration, location,
presence, or use of the Aircraft, Airframe, any Engine or any Part thereof,
in such jurisdiction or (y) the place of incorporation or principal office
or the activities of the Lessee or any sublessee in such jurisdiction (it
being understood that (A) any such indemnity would be payable only to the
extent of the net harm incurred by the Indemnitee from such Income Taxes,
taking into account any incremental current Tax benefit in another tax
jurisdiction resulting from payment of such Income Taxes and (B) this
sentence would require indemnification in a jurisdiction in which the
Indemnitee is already subject to an Income Tax (an "Existing Income Tax")
only if an event set forth in Clause (x) or (y) of this sentence causes the
Indemnitee to be subject to an Income Tax in that jurisdiction (a "New
Income Tax") other than an Existing Income Tax, and such New Income Tax
would have been imposed even if the activities contemplated by the
Operative Agreements were the Indemnitee's sole nexus to the jurisdiction);
provided, further, that the provisions of this paragraph (b)(i) relating to
Income Taxes shall not exclude from the indemnity described in Section
8.01(a) hereof any Income Taxes for which the Lessee would be required to
indemnify an Indemnitee (x) so that any payment under the Operative
Agreements, otherwise required to be made on an After-Tax Basis, is made on
an After-Tax Basis or (y) pursuant to the last sentence of Section 8.02,
8.05, 9.02 or 9.05 of this Agreement;
(ii) [Reserved];
(iii) Taxes imposed with respect to the Aircraft and arising out
of or measured by acts, omissions, events or periods (or any combination
of the foregoing) which occur after the later of (A) the payment in full
of all amounts payable by the Lessee pursuant to and in accordance with
the Operative Agreements, or the earlier discharge in full of the
Lessee's payment obligations under and in accordance with the Lease and
the Operative Agreements, and (B) the earliest of (x) the expiration of
the Term of the Lease and return of the Aircraft in accordance with
Article 12 of the Lease, (y) the termination of the Lease in accordance
with the applicable provisions of the Lease and return of the Aircraft
in accordance with the Lease, or (z) the termination of the Lease in
accordance with the applicable provisions of the Lease and the transfer
of all right, title and interest in the Aircraft to the Lessee pursuant
to its exercise of any of its purchase options set forth in Section
4.02(a) of the Lease, provided that this exclusion (iii) shall not apply
in respect of any payment made after the dates set forth in clauses (A)
and (B) above unless such payment is made with respect to any event or
circumstance occurring on, with or prior to such return or transfer or
period prior to such return or transfer, or Taxes incurred in connection
with the exercise of any remedies pursuant to Article 17 of the Lease
following the occurrence of an Event of Default;
(iv) As to the Owner Trustee, Taxes imposed against the Owner
Trustee upon or with respect to any fees for services rendered in its
capacity as Owner Trustee under the Trust Agreement or, as to the
Indenture Trustee, Taxes imposed against the Indenture Trustee upon or
with respect to any fees received by it for services rendered in its
capacity as Indenture Trustee under the Indenture;
(v) Taxes imposed on an Indemnitee that would not have been imposed
but for the willful misconduct or gross negligence of such Indemnitee
(other than gross negligence or willful misconduct not actually committed
by but instead imputed to such Indemnitee by reason of such Indemnitee's
participation in the transactions contemplated by the Operative Agreements)
or the breach by such Indemnitee of: (i) in the case of an Indemnitee other
than the Owner Participant, any representation, warranty or covenant
contained in the Operative Agreements or any document delivered in
connection therewith and (ii) in the case of the Owner Participant, the
representations or covenants in Sections 7.02(a), (c); 7.03(a)(i), (ii),
(iii), (iv), (vii), (ix); and 7.03(b), (c), (d), (e) of this Agreement (in
either case unless attributable to a breach of representation, warranty or
covenant of the Lessee);
(vi) Taxes imposed on, and not collected by withholding from
payments of Rent, the Owner Trustee or the Owner Participant or any
successor, assign or Affiliate thereof which became payable by reason of
any voluntary or involuntary transfer or disposition by such Indemnitee
subsequent to the Delivery Date, including revocation of the Trust, of any
interest in some or all of the Aircraft, Airframe, Engines or Parts thereof
or its interest in the Lessor's Estate (not including any transfers of any
Certificates pursuant to Section 15.01(a) hereof) or a disposition in
connection with a bankruptcy or similar proceedings involving either the
Lessor or the Owner Participant other than (A) transfers resulting from a
loss, substitution or modification of the Aircraft, Engines or any Part,
(B) any transfer of the Aircraft, Engines or any Part (in each case other
than at Fair Market Value) to the Lessee or other person in possession
thereof, (C) transfers attributable to an Event of Default or (D) a
transfer pursuant to the Lessee's exercise of its rights under Section
10.01 of the Lease; the parties agree to cooperate to minimize any such
Taxes covered by this provision;
(vii) Taxes imposed on the Owner Participant for which the Lessee is
obligated to indemnify the Owner Participant pursuant to the Tax Indemnity
Agreement;
(viii) Taxes imposed on a successor, assign or other transferee
of the Owner Participant or the Owner Trustee that is not a U.S. Person
or an Indemnitee as of the date hereof under the Operative Agreements
(including, without limitation, a transferee which is a new lending
office of an original Indemnitee) which on the Certificate Closing Date
is an Indemnitee (for purposes of this clause (viii), an "original
Indemnitee") or such original Indemnitee to the extent that such Taxes
exceed the amount of Taxes that would have been imposed and would have
been indemnifiable pursuant to Section 8.01(a) hereof had there not been
a succession, assignment or other transfer by such original Indemnitee
of any such interest of such Indemnitee in the Aircraft or any Part, any
interest in or under any Operative Agreement, or any proceeds thereunder
(it being understood that for purposes of determining the amount of
indemnification that would have been due to such original Indemnitee
with respect to a net income Tax, it shall be assumed that such original
Indemnitee would be subject to taxation on its income at the highest
marginal statutory rate applicable to it), provided, however, that the
exclusion provided by this clause (viii) shall not apply in the case of
a succession, transfer or disposition (A) that occurs after the Lease
has been declared in default or if such transfer or disposition is
pursuant to the exercise of remedies under Article 17 of the Lease, (B)
which is an actual or deemed transfer pursuant to Section 7.11 hereof or
as a consequence of a Refinancing under Section 15.01 hereof, or any
actual or deemed transfer of a Certificate that as part of a Refinancing
under Section 15.01 hereof is not retired, but only to the extent the
Taxes attributable to such transfer exceed the amount of Taxes that
would have been imposed on such transferor if the debt had instead been
retired, (C) to the extent necessary to make payments with respect to
such Taxes on an After-Tax Basis, (D) to the extent such Taxes are
directly attributable to the failure of the Lessee to take
administrative actions as have been reasonably requested of it in
writing in a timely manner and which will result in no after-tax cost or
expense to the Lessee or (E) in the case of the Owner Participant or the
Lessor, to any Tax other than an Income Tax;
(ix) [Reserved];
(x) Any Taxes which have been included in the Purchase Price and
which have been paid to the applicable taxing authorities;
(xi) Any Taxes which would not have been imposed but for a Lessor's
Lien or an Indenture Trustee's Lien; and
(xii) Any Taxes imposed on the Owner Participant arising under or in
connection with any prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975(c)(1) of the Code ("Prohibited Transaction");
provided, however, that in the event any prohibited transaction arises
which is not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually or
collectively, a "PTE") then the indemnity provided for herein shall extend
to any Taxes incurred by the Owner Participant (or any Affiliate thereof)
as the result of any Prohibited Transaction arising out of the purchase or
holding of any Loan Certificates by an employee benefit plan subject to
Title I of ERISA or by a plan subject to Section 4975 of the Code
(individually or collectively, an "ERISA Plan") with respect to which the
Owner Participant is a party in interest, within the meaning of Section
3(14) of ERISA, or a disqualified person,within the meaning of Section 4975
of the Code, except, however, that such Indemnity shall not extend to any
Taxes incurred by the Owner Participant (or any Affiliate thereof) as the
result of any Prohibited Transaction occurring with respect to the purchase
or holding of any Loan Certificates (A) over which purchase or holding the
Owner Participant (or an Affiliate thereof) has discretion or control
(other than in the capacity of a custodian, directed trustee or other
similar nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan sponsor"
within the meaning of Section 3(16)(B) of ERISA.
(c) Withholding. The Pass Through Trustee shall withhold any Taxes
required to be withheld on payments to any holder of a Pass Through
Certificate who is a Non-U.S. Person except to the extent that such a holder
of a Pass Through Certificate has furnished evidence to the Pass Through
Trustee sufficient under applicable law to entitle such holder of a Pass
Through Certificate to any exemption from or reduction in the rate of
withholding on interest claimed by such holder of a Pass Through Certificate.
The Indenture Trustee shall withhold any Taxes required to be withheld on any
payment to a Holder pursuant to Section 5.09 of the Indenture. If the
Indenture Trustee or the Pass Through Trustee fails to withhold a Tax required
to be withheld with respect to any Holder of a Certificate or any holder of a
Pass Through Certificate or any claim is otherwise asserted by a taxing
authority against the Owner Trustee or Owner Participant for any withholding
tax, the Lessee will indemnify the Owner Trustee and the Owner Participant
(without regard to the exclusions set forth in Section 8.01(b) hereof) on an
After-Tax Basis against any such Taxes required to be withheld and any
interest and penalties with respect thereto, along with any other costs
(including reasonable attorney's fees) incurred in connection with any such
claim. The Indenture Trustee or the Pass Through Trustee, as the case may be,
in its individual capacity (and without recourse to the Trust Indenture
Estate), shall indemnify the Lessee (without regard to the exclusions set
forth in Section 8.01(b) hereof) on an After-Tax Basis for any payment the
Lessee shall have made pursuant to the preceding sentence.
Section 8.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Tax indemnified against under Section 8.01
shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Tax not
been incurred, provided that the calculation of any additional amounts owing
to any Indemnitee as a result of the Lessee's obligation to indemnify on an
After-Tax Basis shall be made without regard to the exclusions set forth in
Section 8.01(b). If any Indemnitee actually realizes a tax benefit by
reason of the payment of any Tax paid or indemnified against by the Lessee,
such Indemnitee shall promptly pay to the Lessee, to the extent such tax
benefit was not previously taken into account in computing such payment,
but not before the Lessee shall have made all payments then due to such
Indemnitee under this Agreement, the Tax Indemnity Agreement and any other
Operative Agreement, an amount equal to the lesser of (x) the sum of such
tax benefit plus any other tax benefit actually realized by such Indemnitee
that would not have been realized but for any payment made by such
Indemnitee pursuant to this sentence and not already paid to the Lessee,
and (y) the amount of the payment made under Section 8.01 hereof and this
Section 8.02 by the Lessee to such Indemnitee plus the amount of any other
payments by the Lessee to such Indemnitee theretofore required to be made
under this Section 8.02 and Sections 8.01 and 8.05 hereof (and the excess,
if any, of the amount described in clause (x) above over the amount
described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments
to such Indemnitee pursuant to Section 8.01 hereof); provided, however,
that notwithstanding the foregoing portions of this sentence, such
Indemnitee shall not be obligated to make any payment to the Lessee
pursuant to this sentence as long as an Event of Default shall have
occurred and be continuing under the Lease. The Lessee shall reimburse on
an After-Tax Basis such Indemnitee (and without regard to Section 8.01(b)
hereof, except for clause (v) thereof) for any payment of a tax benefit
pursuant to the preceding sentence (or a tax benefit otherwise taken into
account in calculating the Lessee's indemnity obligation hereunder) to the
extent that such tax benefit is subsequently disallowed or reduced
(including the expiration of any tax credit carryovers or carrybacks of
such Indemnitee that would not otherwise have expired).
Section 8.03. Time of Payment. Any amount payable to an Indemnitee
pursuant to this Article 8 shall be paid promptly, but in any event within 30
days after receipt of a written demand therefor from such Indemnitee
accompanied by a written statement describing in reasonable detail the basis
for such indemnity and the computation of the amount so payable, provided that
in the case of amounts which are being contested by the Lessee in good faith
or by the Indemnitee in either case pursuant to Section 8.04 hereof, such
amount shall be payable within 30 days after the time such contest is finally
resolved.
Section 8.04. Contests. If a written claim is made against any
Indemnitee for Taxes with respect to which the Lessee is liable for a payment
or indemnity hereunder, such Indemnitee shall promptly (but in any event
within 30 days of receipt thereof) give the Lessee notice in writing of such
claim and shall furnish the Lessee with copies of any written requests for
information sent to such Indemnitee (and not the Lessee) from any taxing
authority to the extent relating to such Taxes with respect to which the
Lessee may be required to indemnify hereunder and with respect to which it
would be necessary or beneficial to have information provided by the Lessee;
provided, however, that the failure of an Indemnitee to give such notice or
furnish such copy shall not terminate any of the rights of such Indemnitee
under this Article 8, except to the extent that the Lessee's contest rights
have been materially and adversely impaired by the failure to provide such
notice or copy. The Lessee may, at its option, contest in its own name or, if
required by law, require the Indemnitee to contest in good faith, with due
diligence and at the Lessee's expense, if timely requested in writing by the
Lessee, the validity, applicability or amount of such Taxes by:
(i) resisting payment thereof if lawful and practicable or not
paying the same except under protest if protest is necessary and proper in
each case so long as non-payment will not result in a material risk of the
sale, forfeiture or loss of, or the creation of a Lien other than a
Lessor's Lien on the Aircraft, Airframe or any Engine or any risk of
criminal liability; or
(ii) if the payment be made, using reasonable efforts to obtain a
refund thereof in appropriate administrative and judicial proceedings.
Notwithstanding the foregoing, the Lessee shall not be permitted or entitled
to contest any such Tax in its own name unless the Tax is reflected in a
report or a return of the Lessee or raised in an audit or other proceeding of
the Lessee and the Lessee is allowed to directly contest such Tax under
applicable law of the taxing jurisdiction provided, that if the Lessee is so
permitted under applicable law to contest a Tax asserted against the Lessee
and the same or similar Tax is also asserted against the Indemnitee, each of
the Lessee and such Indemnitee shall conduct its contest in its own name and
the Lessee and such Indemnitee will cooperate in a reasonable manner with
respect to the respective contests of such Tax.
If the Indemnitee, after reasonable discussion with the Lessee and
consideration in good faith of any suggestion made by the Lessee as to the
method of pursuing such contest, elects to conduct the contest, such
Indemnitee shall control the contest and shall determine the manner in which
to contest such Taxes and shall periodically or upon the Lessee's request
advise the Lessee of the progress of such contest; provided, however, that the
Lessee shall have the right to be consulted in good faith with respect to any
contest of claims subject to indemnification hereunder, including governmental
and judicial conferences and the right to be consulted in good faith regarding
the relevant portions of all related submissions to any governmental or other
authority, provided, however, that the Lessee shall be permitted to
participate in any such contest only (x) with respect to issues that can be
separated on audit from any Taxes for which the Lessee is not required to
indemnify the Indemnitee hereunder, and (y) if the Indemnitee shall have
determined that in its judgment, exercised in its sole discretion, neither
such participation nor the separation of issues will adversely affect the
Indemnitee. The Indemnitee will not settle a contest that results in a final
determination without consent of the Lessee, unless the Indemnitee waives its
right to indemnification with respect to such contest and any related contest.
Notwithstanding the preceding sentences of this Section 8.04, such Indemnitee
shall not be required to take or continue any action unless the Lessee shall
have (i) agreed in writing to pay and shall pay the Indemnitee on a current
basis and on an After-Tax Basis the after-tax cost of all reasonable fees and
expenses (including reasonable attorneys' fees and accountants' fees) which
such Indemnitee may incur as a result of contesting such Taxes, (ii) made all
payments and indemnities (other than contested payments and indemnities) then
due to the Indemnitee hereunder or with respect to any of the transactions
contemplated by or under the Operative Agreements and (iii) acknowledged in
writing the Lessee's obligation to such Indemnitee pursuant to this Agreement
to the extent that the contest is not successful, unless it is reasonably
clear from the resolution of the contest that an exclusion set forth in
Section 8.01(b) hereof applies. In no event shall such Indemnitee be required
or the Lessee be permitted to contest pursuant to this Section 8.04 the
imposition of any Tax for which the Lessee is obligated to indemnify any
Indemnitee hereunder unless (i) such Indemnitee shall have received, at the
Lessee's expense, an opinion of its tax counsel, such counsel to be reasonably
satisfactory to the Lessee ("Tax Counsel"), to the effect that there exists a
reasonable basis for contesting such claim, (ii) such Indemnitee (and, if such
Indemnitee is not the Owner Participant, the Owner Participant and such
Indemnitee) shall have determined that such contest will not result in any
material risk of loss, sale or forfeiture of, or the creation of a Lien (other
than Lessor's Liens) on, the Aircraft or any part thereof or interest thereon
or in a risk of criminal liability, or adversely affect the Trust Indenture
Estate, (iii) if a Payment Default, Bankruptcy Default or an Event of Default
shall have occurred and be continuing, the Lessee shall have provided security
for its obligations hereunder reasonably satisfactory to the Indemnitee, (iv)
if such contest shall be conducted in a manner requiring payment of the claim
in advance, the Lessee shall have advanced sufficient funds, on an interest
free basis, to make the payment required, and agreed to indemnify the
Indemnitee against any additional net adverse tax consequences on an After-Tax
Basis to such Indemnitee of such advance, (v) the issue shall not be the same
as an issue previously contested hereunder and decided adversely, unless the
Indemnitee shall have received at the Lessee's sole expense, a written
opinion, in form and substance reasonably satisfactory to such Indemnitee, of
Tax Counsel to the effect that the applicable circumstances or law has changed
and that in light thereof, there is substantial authority for contesting such
claim and (vi) the amount of the indemnity payments the Lessee would be
required to make with respect to such adjustment, when aggregated with similar
adjustments that could be raised in other taxable years of such Indemnitee
exceeds $50,000; provided, that in the event that such Indemnitee is not
required under this paragraph to contest any Tax liability for which the
Lessee is obligated to indemnify any Indemnitee, the Lessee may contest such
Tax liability in the name of the Lessee, if permitted by law. The Lessee may
appeal or require the Indemnitee to appeal any judicial decision provided the
foregoing requirements of this Section 8.04 are met and the Indemnitee shall
have received, at the Lessee's expense, an opinion of Tax Counsel, to the
effect that there is substantial authority for such appeal.
Nothing contained in this Section 8.04 shall require any
Indemnitee to contest or continue to contest, or permit Lessee to contest,
a claim which such Indemnitee would otherwise be required to contest
pursuant to this Section 8.04, if such Indemnitee shall waive payment by
Lessee of any amount that might otherwise be payable by Lessee under this
Article 8 in connection with such claim.
Section 8.05. Refunds. Upon receipt by an Indemnitee of a refund of
all or any part of any Taxes which the Lessee shall have paid for such
Indemnitee or for which the Lessee shall have reimbursed or indemnified such
Indemnitee, and provided there shall not have occurred and be continuing any
Payment Default, Bankruptcy Default or Event of Default by the Lessee
hereunder or under the Lease (in which case payment shall not be made to the
Lessee until such Payment Default, Bankruptcy Default or Event of Default
shall have been cured), such Indemnitee shall pay to the Lessee an amount
equal to the amount of such refund less (x) any expenses not previously
reimbursed, (y) all payments then due to such Indemnitee under this Article
8 and (z) Taxes imposed with respect to the accrual or receipt thereof,
including interest received attributable thereto, plus any tax benefit
actually realized by such Indemnitee as a result of any payment by such
Indemnitee made pursuant to this sentence; provided, however, that such amount
shall not be payable (a) before such time as the Lessee shall have made all
payments or indemnities then due and payable to such Indemnitee under this
Article 8 and (b) to the extent that the amount of such payment would exceed
(i) the amount of all prior payments by the Lessee to such Indemnitee pursuant
to this Article 8 less (ii) the amount of all prior payments by such
Indemnitee to the Lessee pursuant to this Article 8.
Any subsequent loss of such refund or tax benefit shall be treated as
a Tax subject to indemnification under the provisions of this Article 8 (in
the case of any such tax benefit, without regard to Section 8.01(b) hereof).
Section 8.06. Lessee's Reports. In case any report or return is
required to be made with respect to any Taxes against which the Lessee is or
may be obligated to indemnify the Indemnitees under this Article 8, the Lessee
shall make such report or return, except for any such report or return that
the Indemnitee has notified the Lessee that it intends to file, in such manner
as will show the ownership of the Aircraft in the Owner Trustee and shall send
a copy of the applicable portions of such report or return to the Indemnitee
and the Owner Trustee or will notify the Indemnitee of such requirement and
make such report or return in such manner as shall be satisfactory to such
Indemnitee and the Owner Trustee. The Lessee will provide such information
reasonably available to the Lessee as the Indemnitee may reasonably require
from the Lessee to enable the Indemnitee to fulfill its tax filing
requirements with respect to the transactions contemplated by the Operative
Agreements (without duplication of the requirements of Section 3 of the Tax
Indemnity Agreement) and any audit information request arising from any such
filing. The Indemnitee will provide such information reasonably available to
it as the Lessee may reasonably require from such Indemnitee to enable the
Lessee to fulfill its tax filing requirements with respect to the transactions
contemplated by the Operative Agreements and any audit information request
arising from such filing; provided that in no event shall any Indemnitee be
required to provide copies of any of its tax returns or other confidential
information. The Lessee shall hold the Indemnitee harmless on an After-Tax
Basis from and against any liabilities, including penalties, additions to tax,
fines and interest, imposed upon or incurred by such Indemnitee to the extent
directly attributable to any insufficiency or inaccuracy in any return,
statement, or report prepared by the Lessee or information supplied by the
Lessee, or directly attributable to the Lessee's failure to supply reasonably
available information to such Indemnitee as required by this Section 8.06.
Section 8.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 8 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of the Operative Agreements.
Section 8.08. Payment of Taxes. With respect to any Tax otherwise
indemnifiable hereunder by the Lessee and applicable to the Aircraft,
Airframe, any Engine or Parts, to the extent permitted by the applicable
federal, state, local or foreign law, the Lessee shall pay such tax directly
to the relevant Taxing authority and file any returns or reports required with
respect thereto to the extent legally entitled to do so in its own name;
provided, however, that the Lessee shall not make any statements or take any
action which would indicate that the Lessee or any Person other than the Owner
Trustee or Owner Participant is the owner of the Aircraft, the Airframe, any
Engine or any Part or which would otherwise be inconsistent with the terms of
the Lease or the Tax Indemnity Agreement and the position thereunder of the
Owner Trustee and the Owner Participant. Copies of such returns or reports,
together with evidence of payment of any tax due, shall be sent by the Lessee
to the Owner Participant within thirty (30) days after the date of each
payment by the Lessee of any Tax.
Section 8.09. Reimbursements by Indemnitees Generally. To the
extent the Lessee is required to pay or withhold any Tax imposed on or with
respect to an Indemnitee in respect of the transactions contemplated by the
Operative Agreements, which Tax is not otherwise the responsibility of the
Lessee under the Operative Agreements, or any other written agreements between
the Lessee and such Indemnitee, then such Indemnitee shall pay to the Lessee
within 30 days of the Lessee's demand therefor an amount which equals the
amount actually paid by the Lessee with respect to such Taxes.
Section 8.10. Special Indemnity. Notwithstanding anything in this
Article 8 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally. (a) The Lessee agrees to indemnify each
Indemnitee against and agrees to protect, defend, save and keep harmless each
Indemnitee from any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, disbursements and expenses
(including legal fees and expenses and all costs and expenses relating to
amendments, supplements, adjustments, consents, refinancings and waivers under
the Operative Agreements except as otherwise provided in Section 10.01(c)(i)
or Article 15 hereof) of every kind and nature, including without limitation
Make-Whole Premium (unless excluded pursuant to Section 3.03 of the Lease)
(whether or not any of the transactions contemplated by this Agreement are
consummated) (individually, an "Expense," collectively, "Expenses"), which
may be imposed on, incurred or suffered by or asserted against any Indemnitee,
in any way relating to, based on or arising out of:
(i) this Agreement (including, without limitation, the execution,
delivery and performance hereof by the Owner Participant prior to the
delivery of the Aircraft), the Lease, the Indenture, the Trust Agreement,
the Intercreditor Agreement, the Liquidity Facilities, the Pass Through
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale or any
other Operative Agreement or any other document entered into in connection
herewith or any sublease or transfer or any transactions contemplated
hereby or thereby;
(ii) the operation, possession, use, non-use, maintenance, storage,
overhaul, delivery, non-delivery, control, repair or testing of the
Aircraft, Airframe, or any Engine or any engine used in connection with the
Airframe, or any part thereof by the Lessee, any sublessee or any other
Person whatsoever, whether or not such operation, possession, use, non-use,
maintenance, storage, overhaul, delivery, non-delivery, control, repair or
testing is in compliance with the terms of the Lease, including without
limitation, claims for death, personal injury or property damage or other
loss or harm to any Person whatsoever, including, without limitation, any
passengers, shippers or other Persons wherever located, and claims relating
to any laws, rules or regulations, including, without limitation,
environmental control, noise and pollution laws, rules or regulation;
(iii) the manufacture, design, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration, import,
export, performance, non-performance, lease, sublease, transfer,
merchantability, fitness for use, alteration, substitution or replacement
of any Airframe, Engine, or Part under the Lease, the Purchase Agreement,
the Purchase Agreement Assignment, the GTA or the Engine Warranty
Assignment or other transfer of use or possession, or other disposition of
the Aircraft, the Airframe, any Engine or any Part including, without
limitation, latent and other defects, whether or not discoverable, strict
tort liability, and any claims for patent, trademark or copyright
infringement;
(iv) any breach of or failure to perform or observe, or any other
non-compliance with, any condition, covenant or agreement to be performed,
or other obligations of the Lessee under any of the Operative Agreements,
or the falsity or inaccuracy of any representation or warranty of the
Lessee in any of the Operative Agreements (other than representations and
warranties in the Tax Indemnity Agreement);
(v) the Collateral Account and the Liquid Collateral;
(vi) the enforcement of the terms of the Operative Agreements and
the administration of the Trust Indenture Estate; and
(vii) the offer, issuance, sale or delivery of any Certificate or any
Pass Through Certificate, or any refunding or refinancing thereof, or
interest in the Lessor's Estate or the Trust Agreement or any similar
interest or in any way relating to or arising out of the Trust Agreement
and the Lessor's Estate, the Indenture or the Trust Indenture Estate
(including, without limitation, any claim arising out of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, or
any other federal or state statute, law or regulation, or at common law or
otherwise relating to securities), or the action or inaction of the Owner
Trustee or Indenture Trustee as trustees, in the manner contemplated by
this Agreement, the Indenture, the Indenture and Security Agreement
Supplement or the Trust Agreement and in the case of the Owner Participant,
its obligations arising under Section 6.01 of the Trust Agreement.
The foregoing indemnity by the Lessee is intended to include and cover, but is
not limited to, any Expense to which the Indemnitees may be subject as a
result of their respective ownership or leasing of any interest in or holding
of any Lien on the Aircraft, Airframe, any Engine or Part during the Term,
whether or not in the Lessee's possession or control, insofar as such Expense
relates to any activity or event whatsoever involving such item while it is
under lease to the Lessee (or after termination of the Lease in connection
with the exercise of remedies thereunder to the extent that such Expense is
attributable to the transactions contemplated hereby and by the other
Operative Agreements), and such Expense does not fall within any of the
exceptions listed in Section 9.01(b) hereof.
(b) Exceptions. The indemnity provided for in Section 9.01(a) shall
not extend to any Expense of any Indemnitee to the extent it:
(i) would not have occurred but for the willful misconduct or gross
negligence of such Indemnitee;
(ii) after the Delivery Date, is in respect of the Aircraft, and is
attributable to acts or events which occur after the Aircraft is no longer
part of the Lessor's Estate or, if the Aircraft remains a part of the
Lessor's Estate, after the expiration of the Term (unless the Aircraft is
being returned at such time, in which case after return of physical
possession; provided that if the Lease has been terminated pursuant to
Article 17 thereof, the indemnity provided in Section 9.01(a) hereof shall
survive for so long as Lessor or the Indenture Trustee shall be exercising
remedies under such Article 17), or to acts or events which occur after
return of possession of the Aircraft by the Lessee in accordance with the
provisions of the Lease (subject to the foregoing proviso if the Lessor has
terminated the Lease pursuant to Article 17 of the Lease) but in any such
case only to the extent not fairly attributable to acts or omissions of the
Lessee prior to expiration of the Term, including without limitation the
Lessee's failure to fully discharge all of its obligations under the Lease
or the other Operative Agreements;
(iii) is a Tax, whether or not the Lessee is required to indemnify
therefor pursuant to Article 8 hereof or pursuant to the Tax Indemnity
Agreement;
(iv) is a cost or expense required to be paid by the Owner
Participant or its permitted transferees (and not by the Lessee) pursuant
to this Agreement or any other Operative Agreement and for which the Lessee
is not otherwise obligated to reimburse the Owner Participant, directly or
indirectly pursuant to the terms of this Agreement or such other Operative
Agreement;
(v) would not have been incurred by such Indemnitee if such
Indemnitee had not been in breach of its representations or warranties, or
had not defaulted in the observance and performance of the terms and
provisions required to be observed and performed by it, in this Agreement,
the Purchase Agreement Assignment, the Lease, the Indenture, the Trust
Agreement or any other Operative Agreement to which it is a party unless
such breach or default shall be a result of the breach or default by the
Lessee of any of its obligations under the Operative Agreements or by
another Indemnitee of any of the foregoing;
(vi) [reserved];
(vii) is, in the case of the Owner Participant, Lessor's Liens to the
extent attributable to the Owner Participant; in the case of the Owner
Trustee, Lessor's Liens to the extent attributable to the Owner Trustee; in
the case of SSB, Lessor's Liens to the extent attributable to SSB; and in
the case of the Indenture Trustee, Indenture Trustee's Liens;
(viii) is, in the case of the Owner Participant or the Owner Trustee,
attributable to the offer or sale by such Indemnitee after the Certificate
Closing Date of any interest in the Aircraft, the Lessor's Estate or the
Trust Agreement or any similar interest (including an offer or sale
resulting from bankruptcy or other proceedings for the relief of debtors in
which such Indemnitee is the debtor), unless in each case such offer or
sale shall occur (x) in connection with a Refinancing, (y) as a result of
the occurrence of an Event of Default provided that either the Lease has
been declared in default or the transfer is pursuant to the exercise of
remedies under Article 17 of the Lease or (z) in connection with the
Lessee's exercise of its early termination option under Article 10 of the
Lease or its purchase options under Article 4 of the Lease or in connection
with Article 11 of the Lease;
(ix) is an Expense arising under or in connection with any
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code ("Prohibited Transaction"); provided,
however, that in the event any prohibited transaction arises which is
not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually
or collectively, a "PTE") then the indemnity provided for herein shall
extend to any Expenses incurred by the Owner Participant (or any
Affiliate thereof) as the result of any Prohibited Transaction arising
out of the purchase or holding of any Certificates by an employee
benefit plan subject to Title I of ERISA or by a plan subject to Section
4975 of the Code (individually or collectively, an "ERISA Plan") with
respect to which the Owner Participant is a party in interest, within
the meaning of Section 3(14) of ERISA, or a disqualified person,within
the meaning of Section 4975 of the Code, except, however, that such
Indemnity shall not extend to any Expenses incurred by the Owner
Participant (or any Affiliate thereof) as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Certificates (A) over which purchase or holding the Owner Participant
(or an Affiliate thereof) has discretion or control (other than in the
capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA.
Section 9.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Expense indemnified against under Section
9.01 shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Expense not
been incurred. If any Indemnitee actually realizes a permanent Tax benefit by
reason of the payment of such Expense paid or indemnified against by the
Lessee which was not considered in the computation thereof, such Indemnitee
shall promptly pay to the Lessee, but not before the Lessee shall have made
all payments theretofore due such Indemnitee under this Agreement, the Tax
Indemnity Agreement and any other Operative Agreement, an amount equal to the
lesser of (x) the sum of such Tax benefit plus any other permanent Tax benefit
actually realized by such Indemnitee as the result of any payment made by such
Indemnitee pursuant to this sentence and (y) the amount of such payment
pursuant to this Section 9.02 by the Lessee to such Indemnitee plus the amount
of any other payments by the Lessee to such Indemnitee theretofore made
pursuant to this Section 9.02 less the amount of any payments by such
Indemnitee to the Lessee theretofore made pursuant to this Section 9.02 (and
the excess, if any, of the amount described in clause (x) above over the
amount described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments to
such Indemnitee pursuant to this Section 9.02), it being intended that no
Indemnitee should realize a net Tax benefit pursuant to this Section 9.02
unless the Lessee shall first have been made whole for any payments by it to
such Indemnitee pursuant to this Section 9.02; provided, however, that
notwithstanding the foregoing portions of this sentence, such Indemnitee shall
not be obligated to make any payment to the Lessee pursuant to this sentence
so long as an Event of Default shall have occurred and be continuing. Any
Taxes that are imposed on any Indemnitee as a result of the disallowance or
reduction of such Tax benefit referred to in the next preceding sentence in a
taxable year subsequent to the year of allowance and utilization by such
Indemnitee (including the expiration of any tax credit carryovers or
carrybacks of such Indemnitee that would not otherwise have expired) shall be
indemnifiable pursuant to the provisions of Section 8.01 hereof without regard
to Section 8.01(b) hereof.
Section 9.03. Subrogation. Upon the payment in full of any
indemnity pursuant to this Article 9 by the Lessee (but not earlier), the
Lessee shall be subrogated to any right of the Indemnitee, other than with
respect to any of such Indemnitee's insurance policies or in connection
with any indemnity claim the Person indemnified may have against any other
Indemnitee in respect of the matter against which such indemnity has been
made.
Section 9.04. Notice and Payment. Each Indemnitee and the Lessee
shall give prompt written notice one to the other of any liability of which
such party has received notice for which the Lessee is, or may be, liable
under this Article 9; provided, however, that failure to give such notice
shall not terminate any of the rights of the Indemnitees under this Article 9,
except (with respect to such Indemnitee) to the extent that the Lessee has
been materially prejudiced by the failure to provide such notice. Unless
otherwise provided in the Operative Agreements, any amount payable to an
Indemnitee pursuant to this Article 9 shall be paid within 30 days after
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the basis for such indemnity
and the computation of the amount so payable.
Section 9.05. Refunds. If any Indemnitee shall obtain a recovery of
all or any part of any amount which the Lessee shall have paid to such
Indemnitee or for which the Lessee shall have reimbursed such Indemnitee under
this Article 9, and provided there shall not have occurred a Payment Default
or an Event of Default (in which case payment shall not be made to the Lessee
until such Payment Default or Event of Default shall have been cured) such
Indemnitee shall pay to the Lessee the amount of any such recovery, including
interest received with respect to the recovery, net of any Taxes paid or
payable as a result of the receipt of the recovery and interest, plus any net
additional permanent income tax benefits actually realized by Indemnitee as
the result of any payment made pursuant to this sentence less any reasonable
costs and expense of any Indemnitee not reimbursed by the Lessee; provided,
however, that such amount shall not be payable (a) before such time as the
Lessee shall have made all payments or indemnities then due and payable to
such Indemnitee under this Article 9 or (b) to the extent that the amount of
such payment would exceed the amount of all prior payments by the Lessee to
such Indemnitee pursuant to this Article 9, less the amount of all prior
payments by such Indemnitee to the Lessee pursuant to this Article 9. Any
subsequent loss of such recovery or tax benefit shall be subject to
indemnification under Article 8 or this Article 9, as the case may be, but
without regard to Section 8.01(b) hereof, other than Section 8.01(b)(v)
hereof.
Section 9.06. Defense of Claims. The Lessee or its insurers shall
have the right (in each such case at the Lessee's sole expense) to investigate
or, provided that (i) the Lessee or its insurers shall not reserve the right
to dispute liability with respect to any insurance policies pursuant to which
coverage is sought, (ii) in the case of the Lessee, no Payment Default or
Event of Default shall have occurred and be continuing or shall arise at any
time during the claim and (iii) the Lessee shall have first acknowledged in
writing to such Indemnitee the Lessee's obligation to indemnify such
Indemnitee hereunder in respect of such claim, defend any such claim
covered by insurance for which indemnification is sought pursuant to this
Article 9 and each Indemnitee shall cooperate with the Lessee or its
insurers with respect thereto, and provided, further, the Lessee shall not
be entitled to assume and control the defense of any such claim if and to
the extent (A) such Indemnitee reasonably objects to such control on the
ground that an actual or potential material conflict of interest exists
where it is advisable for such Indemnitee to be represented by separate
counsel or on the grounds that such proceeding involves the potential
imposition of criminal liability on such Indemnitee or (B) such proceeding
will involve any material danger of the sale, forfeiture or loss of, or the
creation of any Lien on the Aircraft or the Trust Estate (unless the Lessee
posts a bond or other security reasonably acceptable in form and substance
to such Indemnitee) or involve any material risk of civil liability to such
Indemnitee for which it is not indemnified hereunder. Subject to the
immediately foregoing sentence, where the Lessee or the insurers under a
policy of insurance maintained by the Lessee undertake the defense of an
Indemnitee with respect to such a claim, no additional legal fees or
expenses of such Indemnitee in connection with the defense of such claim
shall be indemnified hereunder unless the fees or expenses were incurred at
the written request of the Lessee or such insurers. Subject to the
requirement of any policy of insurance applicable to a claim, an Indemnitee
may participate at its own expense at any judicial proceeding controlled by
the Lessee or its insurers pursuant to the preceding provisions, to the
extent that such party's participation does not, in the opinion of the
independent counsel appointed by the Lessee or its insurers to conduct such
proceedings, interfere with such control; and such participation shall not
constitute a waiver of the indemnification provided in this Section 9.06.
No Indemnitee shall enter into any settlement or other compromise with
respect to any claim described in this Section 9.06 without the prior
written consent of the Lessee, which consent shall not unreasonably be
withheld or delayed, unless such Indemnitee waives its right to be
indemnified under this Article 9 with respect to such claim. The Lessee
shall not enter into any settlement or compromise which the Lessee has not
agreed to discharge or with respect to which the Lessee has not agreed to
indemnify such Indemnitee to such Indemnitee's satisfaction or which admits
any criminal violation, gross negligence or willful misconduct on the part
of any Indemnitee without the prior written consent of such Indemnitee.
Section 9.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 9 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of this Agreement, the Tax Indemnity
Agreement, the Trust Agreement, the Indenture, the Purchase Agreement
Assignment, the Engine Warranty Assignment, the Lease and the other Operative
Agreements but, as to such indemnities after the expiration or other
termination of the Lease, only with respect to losses, liabilities,
obligations, damages, penalties, claims, actions, suits, costs, Expenses and
disbursements caused by events occurring or existing (or fairly attributable
to the Lessee's acts or omissions) prior to such termination or expiration or
incurred in the process of (i) the return or disposition of the Aircraft under
Article 12 or Article 17 of the Lease, or (ii) the termination of the Lease or
the Indenture or, if later, the return of the Aircraft.
Section 9.08. Effect of Other Indemnities. The Lessee's obligations
under the indemnities provided for in this Agreement shall be those of a
primary obligor whether or not the Person indemnified shall also be
indemnified with respect to the same matter under the terms of this Agreement,
the Lease, the Indenture, the Trust Agreement, or any other document or
instrument, and the Person seeking indemnification from the Lessee pursuant to
any provision of this Agreement may proceed directly against the Lessee
without first seeking to enforce any other right of indemnification.
Section 9.09. Interest. The Lessee will pay to each Indemnitee on
demand, to the extent permitted by applicable law, interest on any amount of
indemnity not paid when due pursuant to this Article 9 until the same shall be
paid, at the Past Due Rate.
Section 9.10. Special Indemnity. Notwithstanding anything in this
Article 9 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs. (a) Transaction
Costs. The Owner Participant shall pay (or reimburse the Lessee if the Lessee
shall have previously made such payment) all fees and expenses of the
following persons relating to the public offering of the Pass Through
Certificates contemplated by the Underwriting Agreement and related to the
transactions contemplated hereby on the Certificate Closing Date and the
Delivery Date: (i) the fees and expenses of counsel for the Owner Participant;
(ii) the fees and expenses of the transaction documentation counsel for the
Lessee and counsel for the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee, each Liquidity Provider and the
Underwriters (other than those fees, expenses and disbursements payable by the
Underwriters pursuant to the Underwriting Agreement); (iii) the fees and
expenses of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇; (iv) any initial fees and expenses
of the Pass Through Trustee and each Liquidity Provider and the fees and
expenses of the Owner Trustee, the Subordination Agent and the Indenture
Trustee; (v) any compensation, commissions and discounts payable to the
Underwriters pursuant to the Underwriting Agreement; (vi) the fees, if any,
incurred in printing the Pass Through Certificates; (vii) the fees and
expenses incurred in connection with printing any amendment to the
Registration Statement on Form S-3 bearing Registration No. 333-07691,
printing any Preliminary Prospectus or Prospectus (as such terms are defined
in the Underwriting Agreement) for the offering of the Pass Through
Certificates; (viii) the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP; (ix) the
fees and expenses of ▇▇▇▇▇'▇ and S&P; (x) the fees and expenses (including
computer time-sharing charges) of First Chicago Leasing Corporation; (xi) the
reasonable out-of-pocket expenses of the Owner Participant, including, without
limitation, any amounts paid in connection with any appraisal report prepared
on behalf of the Owner Participant; (xii) reimbursement to the Owner
Participant, the Owner Participant Guarantor, the Owner Trustee, the Indenture
Trustee, the Subordination Agent, each Liquidity Provider and the Pass Through
Trustee for any and all fees, expenses and disbursements of the character
referred to above or otherwise incurred in connection with the negotiation,
preparation, execution and delivery, filing and recording of the Operative
Agreements and the documents contemplated thereby, including, without
limitation, travel expenses and disbursements which shall have been paid by
such party; (xiii) printing and duplicating expenses and all fees, taxes and
other charges payable in connection with the recording or filing on or
before the Delivery Date of the instruments described in this Agreement;
(xiv) initial fees, initial expenses, initial disbursements and the initial
costs of distributing the Certificates (but not the continuing fees,
expenses, disbursements and costs of distribution) of SSB, as lessor under
the Lease and as Owner Trustee under the Trust Agreement and with respect
to the administration of the Lease and the Lessor's Estate, of the
Indenture Trustee as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate and of the Subordination Agent
acting under the Intercreditor Agreement; and (xv) any other amounts
approved by the Lessee and the Owner Participant. The fees and expenses
described in clauses (ii) through (x) of this paragraph shall be allocable
to the Owner Participant under this Agreement (1) to the extent incurred
specifically with respect to the Owner Participant, and (2) to the extent
such fees and expenses are incurred but are not specifically attributable
to the Owner Participant, in the proportion that the principal amount of
the Certificates bears to the total amount of the Pass Through
Certificates.
The Owner Participant, the Owner Trustee and the Lessee acknowledge
that the percentages for Basic Rent, Stipulated Loss Value and Termination
Value set forth in the Lease have been prepared assuming the aggregate amount
payable by the Owner Participant pursuant to the preceding paragraph is 1.16%
of the Purchase Price (the "Estimated Expense Amount"). Transaction Costs
shall be paid in the manner provided in Section 3.04 hereof.
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of the entity
acting as Owner Trustee, as lessor under the Lease and as Owner Trustee under
the Trust Agreement with respect to the administration of the Lease and the
Lessor's Estate and the continuing fees, expenses and disbursements (including
reasonable counsel fees and expenses and initial fees relating to the
establishment of any replacement trustee) of the Indenture Trustee, as trustee
under the Indenture with respect to the administration of the Trust Indenture
Estate, the continuing fees, expenses and disbursements (including reasonable
counsel fees and initial fees relating to the establishment of a replacement
trustee) of the Pass Through Trustee and the Subordination Agent and the
continuing fees, expenses and disbursements (including reasonable counsel fees
and initial fees relating to the establishment of a replacement liquidity
provider) of the Liquidity Providers under each Liquidity Facility shall be
paid as Supplemental Rent by the Lessee, including without limitation any
amounts payable to the Indenture Trustee or on account of requests by the
Indenture Trustee for indemnification under Article XI of the Indenture.
(c) Amendments, Supplements and Appraisal. Without limitation of
the foregoing, the Lessee agrees:
(i) to pay as Supplemental Rent to the Owner Trustee, the Owner
Participant, Owner Participant Guaranty, the Indenture Trustee, the
Subordination Agent, the Liquidity Providers and the Pass Through Trustee
all costs and expenses (including reasonable legal fees and expenses)
incurred by any of them in connection with (a) any Default or Event of
Default and any enforcement or collection proceedings resulting therefrom,
or (b) the enforcement of the obligations of the Lessee hereunder or under
the other Operative Agreements, including, without limitation, the entering
into or giving or withholding of any amendments or supplements or waivers
or consents (whether or not consummated), including without limitation, any
amendment, supplement, waiver or consent resulting from any work-out,
restructuring or similar proceeding relating to the performance or
nonperformance by the Lessee of its obligations under the Operative
Agreements or (c) any amendment, supplement, waiver or consent (whether or
not entered into) under this Agreement, the Lease, the Indenture, the
Certificates, the Tax Indemnity Agreement, the Purchase Agreement
Assignment or any other Operative Agreement or document or instrument
delivered pursuant to any of them, which amendment, supplement, waiver or
consent is required by any provision of any Operative Agreement (including
any adjustment pursuant to Section 3.04 of the Lease) or is requested by
the Lessee or necessitated by the action or inaction of the Lessee;
provided, however, that the Lessee shall not be responsible for fees and
expenses incurred in connection with the offer, sale or other transfer
(whether pursuant to Section 7.03(d) hereof or otherwise) by the Owner
Participant after the Certificate Closing Date of any interest in the
Aircraft, the Lessor's Estate, the Beneficial Interest or the Trust
Agreement or any similar interest (and the Owner Participant shall be
responsible for all such fees and expenses), unless such offer, sale or
transfer shall occur (A) after the Lease has been declared in default or if
the transfer is pursuant to the exercise of remedies under Article 17 of
the Lease or (B) in connection with the termination of the Lease or action
or direction of the Lessee pursuant to Section 4.02, Article 10 or Article
11 of the Lease; and
(ii) to pay the fees, costs and expenses of all appraisers involved
in an independent appraisal of the Aircraft to the extent required under
Section 4.03 of the Lease.
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee. (a)
Resignation and Removal. The Owner Trustee or any successor Owner Trustee may
resign or may be removed by the Owner Participant, and a successor Owner
Trustee may be appointed and a Person may become Owner Trustee under the Trust
Agreement only in accordance with the provisions of Section 3.11 of the Trust
Agreement and the provisions of paragraphs (b) and (c) of this Section 11.01.
(b) Conditions to Appointment. The appointment in any manner of a
successor Owner Trustee pursuant to Section 3.11 of the Trust Agreement shall
be subject to the following conditions:
(i) Such successor Owner Trustee shall be a Citizen of the United
States;
(ii) Such successor Owner Trustee shall be a bank or a trust company
having combined capital, surplus and undivided profits of at least
$100,000,000 or a bank or trust company fully guaranteed by a direct or
indirect parent thereof having a combined capital, surplus and undivided
profits of at least $100,000,000;
(iii) Such appointment shall not violate any provisions of the
Transportation Code or any applicable rule or regulation of the applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered or create a relationship which would be in violation
of the Transportation Code or any applicable rule or regulation of the
applicable regulatory agency or body of any other jurisdiction in which the
Aircraft may then be registered;
(iv) Such successor Owner Trustee shall enter into an agreement
or agreements, in form and substance reasonably satisfactory to the
Lessee, the Owner Participant, the Pass Through Trustee and the
Indenture Trustee whereby such successor Owner Trustee confirms that it
shall be deemed a party to this Agreement, the Trust Agreement, the
Lease, the Lease Supplement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, the Indenture, the Indenture Supplement and
any other Operative Agreement to which the Owner Trustee is a party and
agrees to be bound by all the terms of such documents applicable to the
Owner Trustee and makes the representations and warranties contained in
Section 7.04 hereof (except that it may be duly incorporated, validly
existing and in good standing under the laws of the United States of
America or any State thereof); and
(v) All filings of Uniform Commercial Code financing and continuation
statements, filings in accordance with the Transportation Code and
amendments thereto shall be made and all further actions taken in
connection with such appointment as may be necessary in connection with
maintaining the validity, perfection and priority of the Lien of the
Indenture and the valid and continued registration of the Aircraft in
accordance with the Transportation Code.
(c) Appointment. For so long as the Aircraft remains registered
under the Transportation Code, the Owner Participant agrees to appoint
promptly a successor Owner Trustee meeting the requirements of Section
11.01(b) hereof in the event the Owner Participant has knowledge that the
Owner Trustee at any time shall not be a Citizen of the United States.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant. The Owner
Participant shall have no obligation or duty to the Lessee or to any Holder
with respect to the transactions contemplated by this Agreement, except those
obligations or duties expressly set forth in this Agreement, the Indenture,
the Trust Agreement, the Tax Indemnity Agreement, AVSA's FAA ▇▇▇▇ of Sale,
AVSA's Warranty ▇▇▇▇ of Sale, the Lease or any other Operative Agreement to
which the Owner Participant is a party and the Owner Participant shall not be
liable for the performance by any party hereto of such other party's
obligations or duties hereunder. Under no circumstances shall the Owner
Participant as such be liable to the Lessee, nor shall the Owner
Participant be liable to any Holder, for any action or inaction on the part
of the Owner Trustee or the Indenture Trustee in connection with this
Agreement, the Indenture, the Lease, the Trust Agreement, the Purchase
Agreement Assignment, the Engine Warranty Assignment, any other Operative
Agreement, the ownership of the Aircraft, the administration of the
Lessor's Estate or the Trust Indenture Estate or otherwise, whether or not
such action or inaction is caused by the willful misconduct or gross
negligence of the Owner Trustee or the Indenture Trustee.
Section 12.02. Interest of Holders of Certificates. A Holder of a
Certificate shall have no further interest in, or other right with respect to,
the Trust Indenture Estate when and if the principal and interest on all
Certificates held by such Holder and all other sums payable to such Holder
under this Agreement, under the Indenture and under such Certificates shall
have been paid in full.
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents. The Lessee
hereby consents in all respects to the execution and delivery of the
Indenture, the Intercreditor Agreement and the Liquidity Facilities and to all
of the terms of said documents, and the Lessee acknowledges receipt of an
executed counterpart of such documents; it being agreed that such consent
shall not be construed to require the Lessee's consent to any future
supplement to, or amendment, waiver or modification of the terms of the
Indenture, the Intercreditor Agreement or the Liquidity Facilities or the
Certificates, except that prior to the occurrence and continuance of an Event
of Default, no section of the Indenture, the Trust Agreement, the
Intercreditor Agreement or the Liquidity Facilities shall be amended or
modified in any manner materially adverse to the Lessee without its consent.
Section 13.02. Further Assurances. The Lessee hereby confirms to
the Owner Participant its covenants set forth in and obligations under the
Lease. The Lessee agrees that, except as otherwise provided in the
Indenture, the Owner Trustee may not enter into any amendment, modification
or supplement of, or give any waiver or consent with respect to, or approve
any matter or document as being satisfactory under the Lease without the
prior consent of the Indenture Trustee and the Owner Participant and that,
except as otherwise provided in the Indenture, upon an Indenture Event of
Default, the Indenture Trustee may act as the Lessor under the Lease to the
exclusion of the Owner Trustee. The Lessee further agrees to deliver to
the Indenture Trustee and the Owner Participant a copy of each notice,
statement, request, report or other communication given or required to be
given to the Owner Trustee under the Lease.
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment. The Pass Through Trustee and the Subordination Agent hereby
acknowledge and agree to be bound by all of the terms and conditions of the
Indenture, including without limitation, Section 8.01 thereof regarding the
rights of the Owner Participant to purchase the Certificates under
circumstances specified therein.
ARTICLE 14
NOTICES
Section 14.01. Notices. All notices, demands, declarations and
other communications required by this Agreement shall be in writing and
shall be deemed received (a) if given by telecopier, when transmitted and
the appropriate telephonic confirmation received if transmitted on a
Business Day and during normal business hours of the recipient, and
otherwise on the next Business Day following transmission, (b) if given by
certified mail, return receipt requested, postage prepaid five Business
Days after being deposited in the United States mail and (c) if given by
FedEx service (or, if a Default or Event of Default shall have occurred and
be continuing, by other comparable courier service), when received or
personally delivered, addressed:
(a) If to the Lessee, to its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President and Treasurer with a
copy to Senior Vice President and General Counsel at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, facsimile
(▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessee shall from time to
time designate in writing to the Lessor, the Indenture Trustee and the
Owner Participant;
(b) If to the Lessor or the Owner Trustee, to it ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (617)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessor
shall from time to time designate in writing to the Lessee and the
Indenture Trustee, with a copy to the Owner Participant;
(c) If to the Owner Participant, to its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President Leasing with
a copy to Director, Portfolio Administration, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
facsimile ▇▇▇ ▇▇▇-▇▇▇▇, or to such other address as the Owner Participant
may from time to time designate in writing to the Lessee and the Indenture
Trustee;
(d) If to the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee, to its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (801)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the
Indenture Trustee or the Pass Through Trustee, as the case may be, shall
from time to time designate in writing to the Lessor, the Lessee and the
Owner Participant; and
(e) If to a Liquidity Provider, to its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Manager, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as a
Liquidity Provider shall from time to time designate in writing to the
Lessor, the Lessee and the Indenture Trustee.
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing. (a) Subject to the terms and
conditions of this Section 15.01, the Lessee may request the Owner Participant
to participate in up to two refinancings in whole but not in part, of the
Certificates prior to the end of the Basic Term (a "Refinancing"). Such
Refinancings may be placed in either the private or public markets and shall
be denominated in United States dollars (or in any other foreign currency so
long as the Owner Participant is satisfied there is no foreign currency risk
to it), and shall be on terms that do not materially adversely affect the
Owner Participant. The Owner Participant agrees to negotiate promptly in good
faith to conclude an agreement with the Lessee as to the terms of any such
Refinancing transaction (including the terms of any debt to be issued in
connection with such refinancing and the documentation to be executed in
connection therewith). Without the prior written consent of the Owner
Participant, the prospectus and other offering materials relating to any
Refinancing in the form of a public offering shall not identify the Owner
Participant and shall not include any financial statements of the Owner
Participant or any Affiliate thereof. In connection with any such Refinancing
in the form of a public offering, the Lessee shall indemnify the Owner
Participant in a manner satisfactory to it for any liabilities under federal,
state or foreign securities laws resulting from such offering. The aggregate
principal amount of the new Certificates issued in connection with each
Refinancing shall be the same as the aggregate principal amount outstanding on
the Certificates being refinanced.
(b) Notwithstanding anything herein to the contrary, no Refinancing
will be permitted unless the Owner Participant and the Indenture Trustee shall
have received at least 15 days' prior written notice of the scheduled closing
date of such Refinancing and the Owner Participant shall have been provided
such longer period as it shall have required for a reasonable opportunity to
review the relevant documentation and the Owner Participant shall have
determined in good faith that neither it nor the Owner Trustee shall suffer
any loss or expense or bear any increased risk as a result of such Refinancing
(including, without limitation, any risk with respect to taxes or other
adverse consequences to the Owner Participant including the application of
Revenue Procedures 75-21 and 75-28 and Section 467 of the Code) for which it
has not been or will not have been indemnified by the Lessee in a manner
reasonably satisfactory to the Owner Participant, nor shall its rights against
all other parties taken as a whole be adversely affected compared to such
rights in effect under the Operative Agreements prior to such proposed
Refinancing.
Prior to the consummation of any Refinancing pursuant to this Section
15.01, the Owner Participant and the Lessee shall agree upon a schedule
setting forth each installment of Basic Rent and setting forth Stipulated Loss
Values and Termination Values payable pursuant to the Lease as a result of the
Refinancing in accordance with Section 3.04 of the Lease, and thereafter the
amounts set forth in such schedule shall become the amounts payable under the
Lease. Upon the consummation of the Refinancing, the evidence of indebtedness
issued pursuant to the Refinancing shall be considered "Certificates" for
purposes of this Agreement, the Lease and the Indenture.
(c) Notwithstanding the foregoing, the Owner Participant shall have
no obligation to proceed with any Refinancing transaction as contemplated by
this Section 15.01 unless the Lessee indemnifies the Owner Trustee and the
Owner Participant by agreement in form and substance satisfactory to each of
them, for any liability, obligation (other than the obligation to pay
principal and interest in respect of the refinanced indebtedness), cost or
expense (including, without limitation, reasonable attorneys' fees and
Make-Whole Premium or other amounts due under the Indenture), including any
adverse tax consequences or impact, related to or arising out of any such
Refinancing transaction.
(d) Without the prior written consent of the Owner Participant,
which consent may be withheld in its sole discretion, no such refinancing
shall (1) cause the aggregate principal amount of the indebtedness to be
substituted for the Certificates to exceed the aggregate principal amount
of the then outstanding Certificates, (2) cause the weighted average life
of such indebtedness to be different by more than 6 months than the
remaining weighted average life of the then outstanding Certificates, or
(3) cause the date of maturity of such indebtedness to be later than the
date of maturity of the Certificates being refinanced.
(e) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the
Certificates then outstanding; provided, however, that such Refinancing shall
be subject to the satisfaction of each of the following conditions:
(i) Payment of principal, accrued interest, Make-Whole Premium
and breakage costs, if any, and all other sums due and owing on the
Certificates payable under the Indenture;
(ii) Payment in full of all other amounts then due and owing by the
Lessee under this Agreement, the Indenture, the Lease, the Trust Agreement,
and the Certificates then outstanding shall have been made by the Lessee;
(iii) Such party shall have received such opinions of counsel
(including, without limitation, an opinion received by the Owner
Participant from independent tax counsel reasonably satisfactory to the
Lessee that such Refinancing shall not result in any adverse tax
consequences to such Owner Participant, unless the Lessee shall have agreed
to provide an indemnity in respect thereof reasonably satisfactory in form
and substance to the Owner Participant), certificates and other documents
as it may reasonably request, each in form and substance reasonably
satisfactory to such party;
(iv) All authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) The Lessee shall have provided or agreed to provide to the
Owner Participant, as Supplemental Rent under the Lease, sufficient
funds to pay any breakage costs, Make-Whole Premium and any other
amounts due under the Indenture;
(vi) The satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 15.01 to such
party's obligations under this Section 15.01;
(vii) No Payment Default, Bankruptcy Default or Event of Default
shall have occurred and be continuing or would occur immediately after
giving effect to such Refinancing;
(viii) In the event the Lessee shall not prohibit the purchase of
the Refinancing loan certificates by, or with the assets of, an employee
benefit plan, as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA or a plan or individual retirement account, which is
subject to Section 4975(c) of the Code, (individually or collectively, an
"ERISA Plan"), the Lessee will permit the placement of the Refinancing loan
certificates with an ERISA Plan only if either (A) if such placement is in
the form of pass through certificates, the sole underwriter or the manager
or co-manager of the underwriting syndicate or the selling or placement
agent of the Refinancing loan certificates represents to the Lessee that it
has a prohibited transaction exemption from the U.S. Department of Labor
with respect to pass through certificates (such as Prohibited Transaction
Exemption 89-88 or any other comparable exemption) or (B) purchasers of the
Refinancing loan certificates provide a representation (which may be in the
form of a deemed representation) regarding their source of funds used in
acquiring the Refinancing loan certificates and, if such purchasers
represent that they are using funds of an ERISA Plan in acquiring the
Refinancing loan certificates, such purchasers further represent that (1)
either they are relying on a prohibited transaction exemption from the U.S.
Department of Labor with respect to their purchase and holding of the
Refinancing loan certificates and they provide representations regarding
the satisfaction of the relevant conditions of such an exemption or (2)
their purchase and holding of the Refinancing loan certificates will not
constitute a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code. The reliance on any such exemption
will not be conditional on the Owner Participant's representation
concerning its party in interest or other status with respect to ERISA
Plans. If neither exemption referred to in clause (A) or (B) of this
paragraph (viii) is valid or applicable in any respect to the purchase
and holding of the Refinancing loan certificates, or if the
representation in clause (B) of this paragraph (viii) that such purchase
and holding will not constitute a non-exempt prohibited transaction is
not correct, whichever is applicable, then the Lessee shall indemnify
the Owner Participant pursuant to, and to the extent provided for, under
Sections 8 and 9 hereof for Taxes and Expenses resulting from any
"prohibited transaction", within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code, occurring with respect to the placement
of the Refinancing loan certificates with, or the holding of the
Refinancing loan certificates by, any ERISA Plan with respect to which
the Owner Participant is a party in interest, within the meaning of
Section 3(14) of ERISA, or a disqualified person, within the meaning of
Section 4975 of the Code, provided, however, that if the Lessee shall
fail to obtain either of the representations set forth in clause (A) or
(B) of this paragraph (viii), such indemnity shall not be subject to the
exceptions set forth under Sections 8.01(b)(xii)(A) and (B) and
9.01(b)(ix)(A) and (B) hereof; and
(ix) The Lessee shall pay all costs and expenses (including legal
fees) incurred in connection with any proposed or actually consummated
Refinancing.
Section 15.02. Reoptimization. (a) If a Change in Tax Rate occurs
prior to the end of the Basic Term, then, subject to the terms and conditions
of this Section 15.02 and Section 3.04 of the Lease, the Owner Participant
may, upon 30 days' prior notice to the Lessee, the Indenture Trustee, the
Owner Trustee and the Holders, elect to modify the schedule of payments of
principal of the certificates issued ("Refinancing Certificates") in
connection with any Refinancing using private debt (not including debt issued
pursuant to an exemption from registration under the Securities Act relying on
Rule 144A promulgated thereunder but otherwise marketed in a manner
substantially similar to securities registered under the Securities Act, and
not including debt issued in connection with any offering of securities
registered under the Securities Act) due on each remaining Rent Payment Date
on or commencing on the Rent Payment Date next succeeding the date mutually
agreed to by the Owner Participant, the Lessee and the Indenture Trustee on
which the Owner Participant shall make such modification (the "Reoptimization
Date"). Promptly after making such modification, the Owner Participant shall
furnish each party hereto written notice of the amounts so recalculated.
(b) Adjustments to Refinancing Certificates. On the Reoptimization
Date, subject to the satisfaction on or before the Reoptimization Date of the
conditions set forth in Section 15.02(c), the Owner Trustee will issue and
deliver and the Indenture Trustee will authenticate, and each holder of a
Refinancing Certificate will accept delivery of, a new Refinancing Certificate
or Refinancing Certificates (in replacement of each Refinancing Certificate
then held by such holder, which Refinancing Certificates shall be surrendered
to the Indenture Trustee for cancellation) containing such changed principal
installments (expressed as a percentage of the original principal amount of
such Refinancing Certificate) as shall have been recalculated by the Owner
Participant, but in the same principal amount as, and containing terms
identical to, except as otherwise contemplated by Section 15.02(d) hereof, the
Refinancing Certificates originally issued in connection with the Operative
Agreements.
(c) Conditions to the Obligations of the Holders of the Refinancing
Certificates on the Reoptimization Date. The obligation of each holder of a
Refinancing Certificate to accept delivery of a new Refinancing Certificate on
the Reoptimization Date, and to surrender on such Reoptimization Date any
Refinancing Certificate then held by it, is subject to the following
conditions precedent having been satisfied on or before the Reoptimization
Date:
(i) the requirements of Section 15.02(d) hereof shall have been
satisfied;
(ii) the following documents, in form and substance satisfactory to
such Holder, shall have been duly authorized, executed and delivered by the
party or parties thereto and shall be in full force and effect: (A) if the
payments of Basic Rent, Stipulated Loss Values and Termination Values with
respect to the Term have been changed, an amendment to the Lease, dated the
Reoptimization Date, (B) an amendment to the Indenture setting forth any
changed repayment schedule to the Refinancing Certificates, dated the
Reoptimization Date and duly filed (or in the process of being so duly
filed) for recordation with the Aeronautics Authority and (C) replacement
Refinancing Certificates; and
(iii) in connection with any Reoptimization the Owner Participant
shall pay or agree to pay all reasonable costs and expenses incurred by the
Lessee, the Owner Trustee, the Indenture Trustee and each Holder of a
Refinancing Certificate (including, without limitation, reasonable legal
fees and expenses) in connection with any such reoptimization.
(d) Payment Schedules. Except as otherwise provided in this
Section 15.02 as long as the Refinancing Certificates remain outstanding,
the payment schedules for the Refinancing Certificates shall not be
modified.
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes. It is hereby agreed
between the Owner Participant and the Lessee (but the Lessee makes no
representation to such effect) that it is the intent of the parties for
Federal, state, local and foreign income tax purposes that the Owner
Participant will be treated as the owner of the Aircraft and the Lessee will
be treated as the lessee of the Aircraft.
Section 17.02. Collateral Account. (a) The Indenture Trustee shall
notify the Owner Trustee and the Lessee of any losses incurred on the
Specified Investments in the Collateral Account promptly upon the realization
thereof, as well as any fees, commissions and other costs, Taxes (other than
income taxes) and expenses, if any, incurred by the Indenture Trustee in
connection with its administration of the Collateral Account (collectively,
"Losses"). Promptly upon receipt of such notification but, in any event, no
later than the earlier of the Delivery Date (or, if later, the last day of any
investment period referred to in Section 2.14(b) of the Indenture during which
the Delivery Date occurs) and the 15th day after the Cut-Off Date, the Lessee
shall pay to the Indenture Trustee, on behalf of the Owner Trustee, for
deposit into the Collateral Account, an amount equal to such Losses (net of
any investment earnings).
(b) The Lessee shall pay to the Indenture Trustee, on behalf of the
Owner Trustee (A) on each Payment Date prior to the Delivery Date an amount
equal to the aggregate amount of interest accrued on the Certificates from
(and including) the Certificate Closing Date or previous Payment Date, as the
case may be, to, but excluding, such Payment Date and (B) on the first Payment
Date subsequent to the Delivery Date, interest accrued on the Certificates
from and including the last Payment Date (or, if none, the Certificate Closing
Date), to, but excluding, the Delivery Date. In addition, the Lessee will pay
to the Indenture Trustee on behalf of the Owner Trustee all amounts owed by
the Owner Trustee pursuant to clause (b) of the last paragraph of Section 2.04
of the Indenture.
(c) If the Aircraft has not been purchased by the Owner Trustee
on the Delivery Date, the Lessee agrees to pay to the Indenture Trustee, on
behalf of the Owner Trustee, on the 15th day following the Cut-Off Date the
excess, if any, of the amounts payable under Section 6.02(b)(1) of the
Indenture over the amounts released from the Collateral Account under
Section 2.16 of the Indenture.
(d) All amounts payable by the Lessee pursuant to this Section 17.02
shall be paid to the Indenture Trustee at its principal office at ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust
Department, or as the Indenture Trustee may otherwise direct within the United
States, by wire transfer of immediately available funds in U.S. Dollars no
later than 10:30 a.m., New York City time, on the due date of such payment.
Section 17.03. Counterparts. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section 17.04. No Oral Modifications. Neither this Agreement nor
any of its terms may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification is sought. No such written termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy shall have been
delivered to and executed by the Owner Trustee and the Indenture Trustee. A
copy of each such termination, amendment, supplement, waiver or modification
shall also be delivered to each other party to this Agreement.
The consent of each of the Pass Through Trustee and the Subordination
Agent, in its capacity as a party to this Agreement and not as a Holder, shall
not be required to modify, amend or supplement this Agreement or to give any
consent, waiver, authorization or approval with respect to this Agreement
under the circumstances in which the consent of the Indenture Trustee would
not be required for such modification, amendment, supplement, consent, waiver
or approval in accordance with Section 8.01(b) of the Indenture, provided that
the Pass Through Trustee shall be entitled to receive an Opinion of Counsel
(as defined in the Pass Through Agreement) necessary, in its sole discretion,
to establish that the Indenture Trustee's consent would not be required under
such circumstances.
Section 17.05. Captions. The table of contents preceding this
Agreement and the headings of the various Articles and Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions of this Agreement.
Section 17.06. Successors and Assigns. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the Lessee and its
successors and permitted assigns, the Subordination Agent and its successors
and permitted assigns, including without limitation each Holder of a
Certificate, the Owner Participant and its successors and permitted assigns,
the Owner Trustee and its successors as Owner Trustee (and any additional
owner trustee appointed) under the Trust Agreement, the Indenture Trustee and
its successors as Indenture Trustee (and any additional indenture trustee
appointed) under the Indenture and the Pass Through Trustee and its successors
as Pass Through Trustee (and any additional pass through trustee appointed).
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and
the Pass Through Trustee. Each of SSB and FSB is entering into this Agreement
solely in their respective capacities (except to the extent otherwise
expressly indicated), in the case of SSB, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, in the case of FSB, not in
its individual capacity but solely as Indenture Trustee under the Indenture
and as Pass Through Trustee under the Pass Through Agreement, and except as
otherwise expressly provided in this Agreement or in the Lease, the Indenture,
the Pass Through Agreement or the Trust Agreement, neither SSB, nor FSB,
shall be personally liable for or on account of its statements,
representations, warranties, covenants or obligations under this Agreement;
provided, however, that each of SSB and FSB accepts the benefits running to it
under this Agreement, and each agrees that (except as otherwise expressly
provided in this Agreement or any other Operative Agreement to which it is a
party) it shall be liable in its individual capacity for (a) its own gross
negligence or willful misconduct (whether in its capacity as trustee or in its
individual capacity), (b) any breach of representations and warranties or any
breach of covenants made in its individual capacity pursuant to or in
connection with this Agreement or the other Operative Agreements to which
it is a party, (c) any breach, in the case of the Owner Trustee, of its
covenants contained in Sections 3.05 and 3.08 of the Indenture, (d) the
failure to use ordinary care in receiving, handling and disbursing funds,
(e) in the case of the Owner Trustee, Lessor's Liens attributable to it in
its individual capacity, (f) in the case of the Indenture Trustee,
Indenture Trustee's Liens and (g) taxes, fees or other charges on, or based
on, or measured by, any fees, commissions or compensation received by it in
connection with the transactions contemplated by the Operative Agreements.
Section 17.08. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17.09. Public Release of Information. Subject to applicable
legal requirements (including, without limitation, securities laws
requirements, other regulatory requirements and other legally compelled
disclosures), so long as there shall not have occurred an Event of Default or
Indenture Event of Default, each party to this Agreement shall in each
instance obtain the prior written approval of each other party to this
Agreement concerning the exact text and timing of news releases, articles and
other information releases to the public media concerning any Operative
Agreements.
Section 17.10. Certain Limitations on Reorganization. The Indenture
Trustee and the Pass Through Trustee agree that, if (i) the Owner Trustee
becomes or all or any part of the Lessor's Estate or the trust created by the
Trust Agreement becomes the property of, a debtor subject to the
reorganization provisions of the Bankruptcy Code or any other applicable
bankruptcy or insolvency statutes, (ii) pursuant to any such reorganization
provisions, the Owner Participant is held to have recourse liability to the
debtor, the Owner Trustee or the trustee of the debtor directly or indirectly
on account of any amount payable as Make-Whole Premium, principal or interest
on the Certificates, or any other amount payable on any Certificate that is
provided in the Operative Agreements to be nonrecourse to the Owner
Participant and (iii) the Indenture Trustee actually receives any Recourse
Amount which reflects any payment by the Owner Participant on account of (ii)
above, then the Indenture Trustee, as the case may be, shall promptly refund
to the Owner Participant such Recourse Amount. For purposes of this Section
17.10, "Recourse Amount" means the amount by which the portion of such payment
by the Owner Participant on account of clause (ii) above received by the
Indenture Trustee exceeds the amount which would have been received by the
Indenture Trustee if the Owner Participant had not become subject to the
recourse liability referred to in (ii) above. Nothing contained in this
Section shall prevent the Indenture Trustee from enforcing any individual
obligation (and retaining the proceeds thereof) of the Owner Participant under
this Agreement or any other Operative Agreement to the extent herein or
therein provided, for which the Owner Participant has expressly agreed by the
terms of this Agreement to accept individual responsibility.
Section 17.11. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS AND IS BEING DELIVERED IN NEW
YORK.
Section 17.12. Section 1110 Compliance. The parties hereto agree
that the transactions contemplated by the Operative Agreements are expressly
intended to be, shall be and should be construed so as to be entitled to the
benefits and protection of Section 1110 of the Bankruptcy Code.
Section 17.13. Reliance of Liquidity Providers. Each of the parties
hereto agrees and acknowledges that each Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that each Liquidity Provider may rely on such representations
and warranties to the same extent as if such representations and warranties
were made to such Liquidity Provider directly. The terms of this Agreement
shall inure to the benefit of each Liquidity Provider, their respective
successors and permitted assigns.
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality. Each party hereto agrees (on behalf
of itself and each of its Affiliates, agents, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature, any non-public information supplied to it pursuant to this
Agreement which is identified by the Person supplying the same as being
confidential at the time the same is delivered to such party, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any of the parties hereto, (iii) to bank examiners or similar
regulatory authorities, auditors or accountants, (iv) in connection with any
litigation to which any one or more of the parties hereto is a party relating
to the transactions contemplated hereby or by any of the Operative Agreements,
(v) to an Affiliate of the parties hereto, (vi) to any assignee or participant
(or prospective assignee or participant) or other transferee so long as such
assignee or participant (or prospective assignee or participant) or other
transferee first executes and delivers to the respective party making such
assignment or participation an agreement in writing to be bound by the
provisions of this Section 18.01 or (vii) in the case of the Owner Participant
or the Owner Trustee (in its individual or trust capacity) to the Owner
Trustee (in its individual or trust capacity) or to the Owner Participant, as
the case may be.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers and
this Participation Agreement shall be effective this 22nd day of May, 1997.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Treasurer and Managing
Director - Structured Finance
OWNER PARTICIPANT:
PMCC LEASING CORPORATION
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager, Structured Finance
OWNER TRUSTEE:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise expressly provided herein,
but solely as Owner Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
INDENTURE TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Indenture Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PASS THROUGH TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Pass Through Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SUBORDINATION AGENT:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Subordination Agent
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
CERTIFICATE INFORMATION
1. Federal Express Corporation 1997-1 Pass Through Trust Class A
Federal Express Corporation Trust No. N671FE
Interest Rate: 7.50%
Maturity: January 15, 2017
Principal Amount: $33,352,000
2. Federal Express Corporation 1997-1 Pass Through Trust Class B
Federal Express Corporation Trust No. N671FE
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,507,000
3. Federal Express Corporation 1997-1 Pass Through Trust Class C
Federal Express Corporation Trust No. N671FE
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,458,000
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N671FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any Person, governmental department, bureau, commission or agency
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be received by a
Person shall be supplemented by a further payment to such Person so that the
sum of the two payments, after deduction of all Taxes resulting from the
receipt or accrual of such payments, shall be equal to the payment to be
received. In the case of amounts payable to the Lessor, the Owner Participant,
or any corporate Affiliate of the Owner Participant, it shall be presumed that
such Person is at all times subject to Federal income tax at the maximum
marginal rate generally applicable to corporations from time to time and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty ▇▇▇▇ of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a Replacement Engine) whether or not
any of such initial or Replacement Engines may from time to time be installed
on such Airframe or may be installed on any other airframe or on any other
aircraft, including any aircraft substituted pursuant to Section 11.03 of the
Lease. Prior to delivery of the initial Lease Supplement, references in the
Operative Agreements (including Section 3.05 of the Participation Agreement)
to Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N671FE and Manufacturer's serial number 778, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N671FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N671FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA ▇▇▇▇ of Sale. The ▇▇▇▇ of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty ▇▇▇▇ of Sale. The full warranty ▇▇▇▇ of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on September 20, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N671FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Law. Any change to the Code or the Treasury regulations
promulgated thereunder or the publication of any revenue ruling, revenue
procedure or any informational release by the Internal Revenue Service or the
Department of Treasury either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
of such change in writing prior to the Delivery Date.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. September 18, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by ▇▇▇▇▇'▇ or (y) a short-term certificate of deposit rating of P-1 by
▇▇▇▇▇'▇, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N671FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N671FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N671FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof resulting from (i) claims against the Indenture Trustee not related to
the administration of the Trust Indenture Estate or any transactions pursuant
to the Indenture or any document included in the Trust Indenture Estate, (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the Lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N671FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N671FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA ▇▇▇▇
of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, any warranty with respect to
the Airframe and the Engines, all amounts of Basic Rent and Supplemental Rent,
including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. ▇▇▇▇▇'▇ Investors Service, Inc.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Basic Term
utilizing the multiple investment sinking fund method of analysis, computed on
the basis of the same methodology and assumptions as were utilized by the
Owner Participant in determining Basic Rent, Stipulated Loss Value and
Termination Value percentages, as the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N671FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N670FE, N672FE,
N673FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. September 20, 2020 and each January 15 and July 15
commencing on July 15, 1997.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by S&P and Moody's,
respectively or, if such ratings are unavailable, rated by any nationally
recognized rating organization in the United States equal to the highest
rating assigned by such rating organization; (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) overnight repurchase agreements with respect to the securities described
in clause (a) above entered into with an office of a bank or trust company
which is located in the United States of America or any bank or trust company
which is organized under the laws of the United States or any state thereof
and has capital, surplus and undivided profits aggregating at least $500
million.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Basic Term, the amount determined by multiplying the Purchase
Price by the percentage set forth in Schedule III of the Lease under the
heading "Stipulated Loss Value Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N671FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. The Basic Term of the lease for the Aircraft under the Lease
and, if renewed pursuant to Section 4.01 of the Lease, each Renewal Term for
the Aircraft for which the Lease is renewed, or such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that is
on or after December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on July 15, 2015, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N671FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, First Chicago
Capital Markets, Inc., ▇▇▇▇▇▇▇, Sachs & Co. and ▇.▇. ▇▇▇▇▇▇ & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE III
PERMITTED COUNTRY LIST
Australia Luxembourg
Austria Netherlands
Belgium New Zealand
Canada Norway
Denmark Philippines
Finland Portugal
France Republic of China (Taiwan)
Germany Singapore
Greece Sweden
Iceland Switzerland
Ireland Thailand
Japan United Kingdom
SCHEDULE IV
DEBT PORTION
Debt Portion $62,317,000
------------
EXHIBIT A(1)(a)(i)
[Letterhead of Federal Express]
[Certificate Closing Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates will be
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision, (i)
executed counterparts of the Pass Through Agreement, the Series Supplements
and the Operative Agreements to be delivered on the Certificate Closing
Date (the "Certificate Closing Date Documents") and (ii) the forms of the
Operative Agreements to be delivered on the Delivery Date. We have relied
upon originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, documents and other instruments as
in our judgment are relevant to rendering the opinions expressed below. As
to any facts material to the opinions expressed below (other than any
thereof relating to Federal), we have relied upon the representations and
warranties made in the Certificate Closing Date Documents, the accuracy of
which we have not independently investigated or verified. In such
examination, we have assumed the genuineness of all signatures (other than
the signatures of Federal) and the authenticity of all documents submitted
to us as originals and the conformity with the originals of all documents
submitted to us as copies. We have also assumed that each of the parties
to each of the Certificate Closing Date Documents, other than Federal, has
full power, authority and legal right to enter into such Certificate
Closing Date Documents and that each such Certificate Closing Date Document
has been duly authorized, executed and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Certificate Closing Date Documents to which it is a party. Federal is duly
qualified to do business and is in good standing in the State of Tennessee
and each other state of the United States in which its operations or the
nature of its business requires Federal to so qualify, except where the
failure to so qualify would not have a material adverse impact on Federal
or its business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Certificate Closing Date Documents to which
Federal is a party has or had, on the date of execution thereof, been duly
authorized, executed and delivered by Federal and each constitutes the
legal, valid and binding obligation of Federal enforceable against Federal
in accordance with its terms. Each of the Certificate Closing Date
Documents to which Federal is to be a party and which are to be executed on
the Delivery Date has been duly authorized by Federal.
4. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which Federal is a party, nor the
consummation of any of the transactions by Federal contemplated thereby,
nor the performance of the obligations thereunder by Federal, did at the
time of execution and delivery, or does presently (a) require any
stockholder approval or violate the certificate of incorporation or by-laws
of Federal or (b) conflict with or contravene the provisions of, or
constitute a default under, or result in the creation of any Lien (other
than Liens permitted under Section 6.01(a) of the Lease) upon the property
of Federal under any law, governmental rule or regulation, or the charter
or bylaws of Federal or any order, writ, injunction or decree of any court
or governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which it is a party, nor the
consummation of any transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did or does, as the
case may be, (a) require the consent or approval of, the giving of notice
to, or (except as described or contemplated in the Participation Agreement
and the Lease, all of which are required to be performed on or prior to the
Certificate Closing Date and which shall have been accomplished on or prior
to the Certificate Closing Date) the registration with, or the taking of
any other action in respect of, the Aeronautics Authority, the Securities
and Exchange Commission or any other authority or agency of the federal
government or of the State of Tennessee other than (i) the registration of
the issuance and sale of the Pass Through Certificates under the Securities
Act and (ii) compliance with the securities laws of each applicable state,
or (b) contravene any judgment or order applicable to or binding on Federal
or any law or governmental rule or regulation of the United States or of
the State of Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Certificate Closing Date Documents.
7. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
8. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
9. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Certificate Closing Date Documents to which Federal
is a party are based upon the assumption for purposes of such opinions and
without independent analysis that, notwithstanding the respective choice of
laws clauses in the Certificate Closing Date Documents, the governing law
with respect to each of the Certificate Closing Date Documents is identical
in all relevant respects to the law of the State of Tennessee. Insofar as
the foregoing opinion relates to the enforceability of any instrument, such
enforceability is subject to applicable bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally
(whether such enforceability is considered in a proceeding in equity or at
law). The enforceability of the remedies provided under the Lease may also
be limited by applicable laws which may affect the remedies provided
therein but which do not in my opinion affect the validity of the Lease or
make such remedies inadequate for the practical realization of the benefits
intended to be provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(a)(ii)
[Letterhead of Federal Express]
[Delivery Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.02(d)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates were
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that were issued under the Indenture, as supplemented
by the related Indenture and Security Agreement Supplement.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision,
executed counterparts of the Operative Agreements, the Pass Through
Agreement and each Series Supplement (the "Transaction Agreements"). We
have relied upon originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records, documents and other
instruments as in our judgment are relevant to rendering the opinions
expressed below. As to any facts material to the opinions expressed below
(other than any thereof relating to Federal), we have relied upon the
representations and warranties made in the Transaction Agreements, the
accuracy of which we have not independently investigated or verified. In
such examination, we have assumed the genuineness of all signatures (other
than the signatures of Federal) and the authenticity of all documents
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies. We have also assumed that each of the
parties to each of the Transaction Agreements, other than Federal, has full
power, authority and legal right to enter into such Transaction Agreements
and that each such Transaction Agreement has been duly authorized, executed
and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Transaction Agreements to which it is a party. Federal is duly qualified
to do business and is in good standing in the State of Tennessee and each
other state of the United States in which its operations or the nature of
its business requires Federal to so qualify, except where the failure to so
qualify would not have a material adverse impact on Federal or its
business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Transaction Agreements to which Federal is a
party has or had, on the date of execution thereof, been duly authorized,
executed and delivered by Federal and each constitutes the legal, valid and
binding obligation of Federal enforceable against Federal in accordance
with its terms.
4. Neither the execution and delivery by Federal of the
Transaction Agreements to which Federal is a party, nor the consummation of
any of the transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did at the time of
execution and delivery, or does presently (a) require any stockholder
approval or violate the certificate of incorporation or by-laws of Federal
or (b) conflict with or contravene the provisions of, or constitute a
default under, or result in the creation of any Lien (other than Liens
permitted under Section 6.01(a) of the Lease) upon the property of Federal
under any law, governmental rule or regulation, or the charter or bylaws of
Federal or any order, writ, injunction or decree of any court or
governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Transaction Agreements to which it is a party, nor the consummation of any
transactions by Federal contemplated thereby, nor the performance of the
obligations thereunder by Federal, did or does, as the case may be, (a)
require the consent or approval of, the giving of notice to, or (except as
described or contemplated in the Participation Agreement and the Lease, all
of which were or are required to be performed on or prior to the Delivery
Date and which were or shall have been accomplished on or prior to the
Delivery Date) the registration with, or the taking of any other action in
respect of, the Aeronautics Authority, the Securities and Exchange
Commission or any other authority or agency of the federal government or of
the State of Tennessee other than (i) the registration of the issuance and
sale of the Pass Through Certificates under the Securities Act, (ii)
compliance with the securities laws of each applicable state and (iii) the
filings and recordings referred to in paragraph 7 below, or (b) contravene
any judgment or order applicable to or binding on Federal or any law or
governmental rule or regulation of the United States or of the State of
Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) (i) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Transaction Agreements, or (ii) involves the
Aircraft.
7. Except for the registration in the Owner Trustee's name
of the Aircraft pursuant to the Transportation Code, and except for the
filing and, where appropriate, recording, pursuant to the Transportation
Code of (A) AVSA's FAA ▇▇▇▇ of Sale, (B) the Trust Agreement, (C) the
Lease (with the Lease Supplement covering the Aircraft, the Indenture and
the Indenture and Security Agreement Supplement covering the Aircraft
attached as exhibits) and (D) the Indenture (with the Indenture and
Security Agreement Supplement covering the Aircraft attached as an
exhibit), no further action, including any filing or recording of any
document is necessary or advisable in order to establish and perfect the
Owner Trustee's title to and interest in the Aircraft as against Federal
and any third parties, or to perfect the first mortgage lien on the
Aircraft in favor of the Indenture Trustee in each case with respect to
such portion of the Aircraft as is covered by the recording system
established by the Transportation Code.
8. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
9. On the date hereof the Owner Trustee received good and
valid title to the Aircraft free and clear of all Liens on file with the
FAA, except for Liens permitted under Section 6.01(a) of the Lease.
10. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
11. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Transaction Agreements to which Federal is a party
are based upon the assumption for purposes of such opinions and without
independent analysis that, notwithstanding the respective choice of laws
clauses in the Transaction Agreements, the governing law with respect to
each of the Transaction Agreements is identical in all relevant respects to
the law of the State of Tennessee. Insofar as the foregoing opinion
relates to the enforceability of any instrument, such enforceability is
subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally (whether such
enforceability is considered in a proceeding in equity or at law). The
enforceability of the remedies provided under the Lease may also be limited
by applicable laws which may affect the remedies provided therein but which
do not in my opinion affect the validity of the Lease or make such remedies
inadequate for the practical realization of the benefits intended to be
provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
As to the matters referred to in paragraphs 5, 7 and 9, I
have relied on the opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ of even date
herewith, to the extent such matters are addressed in such counsel's
opinion and subject to the assumptions and qualifications expressed
therein.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(i)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as Owner Trustee, and First Security Bank, National
Association, not in its individual capacity, except as otherwise stated, but
solely as Indenture Trustee, Pass Through Trustee and Subordination Agent,
relating to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(v) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of a portion of the Owner Trustee's payment
of the Purchase Price of one Airbus A300F4-605R Aircraft using the proceeds
from the public offering of the Pass Through Certificates. On the Certificate
Closing Date, three Classes of Pass Through Certificates will be issued by
separate Pass Through Trusts, each formed to acquire, among other securities,
the Certificates bearing a particular interest rate and having a particular
Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Certificate Closing Date Documents") and the forms of the Operative
Agreements to be delivered on the Delivery Date. We have also examined
originals, or copies certified to our satisfaction, of such other agreements,
documents, certificates and statements of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. Assuming (i) the due authorization, execution and
delivery of the Certificate Closing Date Documents by each of the parties
to each such document (other than Federal Express), (ii) each such party
has full power and legal right to enter into and perform its respective
obligations under the Certificate Closing Date Documents, (iii) that the
execution, delivery and performance of each of the Certificate Closing Date
Documents by each of the parties thereto will not violate the respective
parties' constituent documents, (iv) the due authorization, execution,
issuance and delivery by the Owner Trustee, and the due authentication by
the Indenture Trustee, of the Certificates to be issued under the Indenture
in accordance with the terms of the Indenture, (v) the due authorization,
execution, issuance, delivery and authentication by the Pass Through
Trustee of the Pass Through Certificates to be issued under the Pass
Through Agreement and the Series Supplement relating to such Pass Through
Certificates, in each case in accordance with the terms of the Pass Through
Agreement and such Series Supplement, and (vi) that the form of each
Certificate Closing Date Document is in compliance with all applicable laws
and governmental rules and regulations (other than the laws of the United
States and the State of New York), then: (A) to the extent governed by New
York law, each Certificate Closing Date Document in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create, except that no opinion is
given with respect to perfection of such security interest on the date
hereof; (C) the Certificates, when issued to and acquired by the Pass
Through Trustee, will be legal, valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee in accordance with their
terms and the terms of the Indenture and will be entitled to the benefits
of the Indenture, including the benefit of the security interest created
thereby, except that no opinion is given with respect to perfection of such
security interest on the date hereof; (D) the Pass Through Certificates,
when issued to and acquired by the Underwriters in accordance with the
Underwriting Agreement, will be legal, valid and binding obligations of the
Pass Through Trustee enforceable against the Pass Through Trustee in
accordance with their terms and will be entitled to the benefits of the
Pass Through Agreement and the Series Supplement relating thereto; and (E)
the beneficial interest of the Owner Participant under the Trust Agreement
in and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
2. (a) Each of the Certificate Closing Date Documents to
which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express. Each of the Operative Agreements to which
Federal Express is to be a party and which are to be delivered on the
Delivery Date has been authorized by Federal Express.
(b) The execution, delivery and performance by Federal
Express of each of the Certificate Closing Date Documents to which Federal
Express is a party do not, or did not on the date of execution thereof,
violate, and fully comply, or did fully comply on the date of execution
thereof, with, any laws and governmental rules and regulations of the State
of New York that may be applicable to Federal Express. The opinion set
forth in this paragraph 2(b) is rendered without regard to the taking of
any action or the conduct of any other business by Federal Express in the
State of New York other than the transactions contemplated by the
Certificate Closing Date Documents.
3. The execution, delivery and performance of the
Certificate Closing Date Documents (other than the Certificates) by the
Owner Trustee in its individual or trust capacity, as the case may be, and
the issuance, execution, delivery and performance of the Certificates by
the Owner Trustee in its trust capacity do not violate, and fully comply
with, any laws and governmental rules and regulations of the State of New
York that may be applicable to the Owner Trustee in its individual or trust
capacity, as the case may be. The opinion set forth in this paragraph 3 is
rendered without regard to the effect, if any, on such issuance (in the
case of the Certificates), execution, delivery or performance, of the
taking of any action, the conduct of any business or the exercise of any
other powers by State Street Bank and Trust Company of Connecticut,
National Association in its individual or trust capacity in the State of
New York not related to the transactions contemplated by the Certificate
Closing Date Documents. We have assumed that State Street Bank and Trust
Company of Connecticut, National Association has made the filings necessary
to comply with Section 131.3 of the Banking Law of the State of New York,
however we express no opinion as to whether State Street Bank and Trust
Company of Connecticut, National Association is required to comply with
said Section 131.3.
4. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinion of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Vice President - Law of Federal Express to be delivered to
you and dated the date hereof, for purposes of the matters covered
thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware.
(c) The opinion contained in paragraph 1(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(ii)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity but solely as Owner
Trustee, and First Security Bank, National Association, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent, relating to the Aircraft. This
opinion is being delivered pursuant to Section 4.02(d)(ii) of the
Participation Agreement. Capitalized terms not otherwise defined herein have
the meanings assigned thereto in the Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of the Owner Trustee's payment of a portion
of the Purchase Price of one Airbus A300F4-605R Aircraft (the "Aircraft") using
the proceeds from the public offering of the Pass Through Certificates. On the
Certificate Closing Date, three Classes of Pass Through Certificates were
issued by separate Pass Through Trusts, each formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having a
particular Maturity issued under the Indenture. The Aircraft is to be leased
to Federal Express by the Owner Trustee pursuant to the Lease and subjected to
the Lien of the Indenture, and is to be delivered by the Owner Trustee to the
Lessee on this date, and in connection with the delivery of the Aircraft, the
Owner Trustee and Federal Express will execute and deliver the Lease
Supplement, and the Owner Trustee will execute and deliver the Indenture and
Security Agreement Supplement.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Transaction Agreements"). We have also examined originals, or copies
certified to our satisfaction, of such other agreements, documents,
certificates and statements of governmental officials and corporate officers
as we have deemed necessary or advisable as a basis for such opinions. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. With respect to that portion, if any, of the Aircraft
and the other property included in the Lessor's Estate as may not be
covered by the recording system established by the FAA pursuant to Section
44107 of the Transportation Code, no filing or recording of any document or
other action was or is necessary in order to establish the Owner Trustee's
title thereto and interest therein as against Federal Express and any third
parties.
2. Subject to execution and delivery of the Lease
Supplement and the Indenture and Security Agreement Supplement for the
Aircraft and to the registration of the Aircraft with the FAA in the name
of the Owner Trustee, the Lease, as supplemented, will create a valid
leasehold interest in the Aircraft, the entitlement thereof to the benefits
of recordation under the Transportation Code being subject to the due and
timely filing and, where appropriate, recording of (A) AVSA's FAA ▇▇▇▇ of
Sale, (B) the Trust Agreement, (C) the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft attached as exhibits) and (D)
the Indenture (with the Indenture and Security Agreement Supplement
covering the Aircraft attached as an exhibit), pursuant to the
Transportation Code, and assuming that at the time of such filing no other
documents relating to the Aircraft have been filed pursuant to the
Transportation Code.
3. Assuming (i) the due authorization, execution and
delivery of the Transaction Agreements by each of the parties to each such
document (other than Federal Express), (ii) each such party has full power
and legal right to enter into and perform its respective obligations under
the Transaction Agreements, (iii) that the execution, delivery and
performance of each of the Transaction Agreements by each of the parties
thereto will not violate the respective parties' constituent documents,
(iv) the due authorization, execution, issuance and delivery by the Owner
Trustee, and the due authentication by the Indenture Trustee, of the
Certificates issued under the Indenture in accordance with the terms of the
Indenture, (v) the due authorization, execution, issuance, delivery and
authentication by the Pass Through Trustee of the Pass Through Certificates
issued under the Pass Through Agreement and the Series Supplement relating
to such Pass Through Certificates, in each case in accordance with the
terms of the Pass Through Agreement and such Series Supplement, and (vi)
that the form of each Transaction Agreement is in compliance with all
applicable laws and governmental rules and regulations (other than the laws
of the United States and the State of New York), then: (A) to the extent
governed by New York law, each Transaction Agreement in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create; (C) the Certificates are
legal, valid and binding obligations of the Owner Trustee enforceable
against the Owner Trustee in accordance with their terms and the terms of
the Indenture and are entitled to the benefits of the Indenture, including
the benefit of the security interest created thereby; and (D) the
beneficial interest of the Owner Participant under the Trust Agreement in
and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, as supplemented by the
Indenture and Security Agreement Supplement, to the Lien of the Indenture
in favor of the Holders. The opinions set forth in this paragraph 3 are
subject to the due filing and recording, where appropriate, with the FAA of
the documents referred to in paragraph 2 above.
4. (a) Each of the Transaction Agreements to which Federal
Express is a party has been duly authorized, executed and delivered by Federal
Express.
(b) The execution, delivery and performance by Federal Express
of each of the Transaction Agreements to which Federal Express is a party do
not, or did not on the date of execution thereof, violate, and fully comply,
or did fully comply on the date of execution thereof, with, any laws and
governmental rules and regulations of the State of New York that may be
applicable to Federal Express. The opinion set forth in this paragraph 4(b)
is rendered without regard to the taking of any action or the conduct of any
other business by Federal Express in the State of New York other than the
transactions contemplated by the Transaction Agreements.
5. The execution, delivery and performance of the
Transaction Agreements (other than the Certificates) by the Owner Trustee
in its individual or trust capacity, as the case may be, and the issuance,
execution, delivery and performance of the Certificates by the Owner
Trustee in its trust capacity do not violate, and fully comply with, any
laws and governmental rules and regulations of the State of New York that
may be applicable to the Owner Trustee in its individual or trust capacity,
as the case may be. The opinion set forth in this paragraph 5 is rendered
without regard to the effect, if any, on such issuance (in the case of the
Certificates), execution, delivery or performance, of the taking of any
action, the conduct of any business or the exercise of any other powers by
State Street Bank and Trust Company of Connecticut, National Association in
its individual or trust capacity in the State of New York not related to
the transactions contemplated by the Transaction Agreements. We have
assumed that State Street Bank and Trust Company of Connecticut, National
Association has made the filings necessary to comply with Section 131.3 of
the Banking Law of the State of New York, however we express no opinion as
to whether State Street Bank and Trust Company of Connecticut, National
Association is required to comply with said Section 131.3.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture in and to the Aircraft and the
Lease) have been pledged and mortgaged with the Indenture Trustee as part of
the Trust Indenture Estate (subject to the due filing and, where appropriate,
recording of those documents referred to in paragraph 2 above and the
financing statement referred to in Section 4.02(f) of the Participation
Agreement), and the beneficial interest of the Owner Participant under the
Trust Agreement in and to such properties are subject, to the extent provided
in the Indenture, to the Lien of the Indenture in favor of the Holders of the
Certificates issued and to be issued under the Indenture.
7. The Indenture and Security Agreement Supplement, pursuant
to the Granting Clause of the Indenture, creates, as security for the
Certificates duly issued and to be issued under the Indenture, the first
priority security interest in the Aircraft it purports to create, the
perfection and rank thereof being subject to the registration with the FAA of
the Aircraft in the name of the Owner Trustee and the due filing and, where
appropriate, recording in accordance with the Transportation Code of the
documents referred to in paragraph 2 above. We express no opinion with
respect to the status of any security interest in any portion of the Aircraft
which does not constitute an "aircraft" or "aircraft engine", as defined in
paragraphs (6) and (7) of Section 40102(a) of the Transportation Code.
8. Except for (i) the filings and recordings referred to in
paragraph 2 above, (ii) the registration of the issuance and sale of the
Pass Through Certificates under the Securities Act and (iii) compliance
with the securities laws of each applicable state, neither the execution
and delivery by Federal Express of the Participation Agreement or any other
Operative Agreement to which it is a party, nor the consummation of any of
the transactions by Federal Express contemplated thereby, requires the
consent or approval of, the giving of notice to, or the registration with,
or the taking of any other action in respect of, the Department of
Transportation, the FAA, the Securities and Exchange Commission or any
other Federal or New York State governmental authority.
9. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the Lessor,
as lessor under and by reason of the Lease. The Lease, including the
rights under Section 1110 of the United States Bankruptcy Code, has been
assigned to the Indenture Trustee pursuant to the Indenture as part of the
collateral for the Certificates and, as assignee, the Indenture Trustee has
the benefit of Section 1110.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinions of ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Peregrin and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of
Federal Express to be delivered to you and dated the date hereof, for
purposes of the matters covered thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware. We express no opinion as to any matters
involving aviation law.
(c) The opinion contained in paragraph 3(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(a)
[Letterhead of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We have acted as special New York counsel for (i) PMCC Leasing
Corporation ("PMCC") in connection with the transactions contemplated by the
Participation Agreement (Federal Express Corporation Trust No. N671FE), dated
as of May 1, 1997 (the "Participation Agreement"), among Federal Express
Corporation, as lessee, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as owner trustee, PMCC, as owner participant, and First
Security Bank, National Association, not in its individual capacity, except as
otherwise stated, but solely as indenture trustee, pass through trustee and
subordination agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation ("▇▇▇▇▇▇
▇▇▇▇▇▇") in connection with the transactions contemplated by the Owner
Participant Guaranty (the "Guaranty"), dated as of May 1, 1997 from ▇▇▇▇▇▇
▇▇▇▇▇▇ to each of the beneficiaries named therein. This opinion is being
furnished to you pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Participation Agreement.
We have examined executed counterparts of the Participation
Agreement, the Trust Agreement, the Tax Indemnity Agreement, the Ancillary
Agreement I and the Ancillary Agreement II (collectively, the "Owner
Participant Documents") and the Guaranty. We have made such other and further
investigations as we have deemed necessary or appropriate for purposes of this
opinion. In our examination we have assumed, with your permission, and
without independent investigation or inquiry, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as
certified or photocopies and the authenticity of the originals of such latter
documents.
With your permission, we have further assumed that (i) the
Owner Participant Documents and the Guaranty have been duly authorized,
executed and delivered by each of the parties thereto, (ii) the respective
parties thereto have the power and authority to execute, deliver and
perform the Owner Participant Documents and the Guaranty, (iii) the
execution, delivery and performance of the Owner Participant Documents and
the Guaranty by the parties thereto do not and will not violate the
certificate of incorporation, by-laws or other organizations documents of
any such party or any bond, debenture, note, mortgage, indenture, lease or
other agreement or instrument to which any such party is a party or by
which any such party is bound and does and will fully comply with all laws
an regulations applicable to each such party and (iv) the Owner Participant
Documents constitute valid, legal and binding obligations of the parties
thereto (other than PMCC), enforceable against such parties (other than
PMCC) in accordance with their respective terms.
Based upon the foregoing, we are of the opinion that:
1. The Participation Agreement and the Tax Indemnity Agreement
constitute valid and legally binding obligations of PMCC enforceable against
PMCC in accordance with their respective terms.
2. The Guaranty constitutes a valid and legally binding obligation
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ enforceable against ▇▇▇▇▇▇ ▇▇▇▇▇▇ in accordance with its
terms.
3. The execution, delivery and performance by PMCC of the Owner
Participant Documents will not result in any violation of any Federal or New
York statute or any order, rule or regulation issued pursuant to any New York
or Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over PMCC.
4. The execution, delivery and performance by ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
the Guaranty will not result in any violation of any Federal or New York
statute or any order, rule or regulation issued pursuant to any New York or
Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over ▇▇▇▇▇▇ ▇▇▇▇▇▇.
5. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by PMCC for the execution, delivery and performance by PMCC of the
Owner Participant Documents.
6. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by ▇▇▇▇▇▇ ▇▇▇▇▇▇ for the execution, delivery and performance by
▇▇▇▇▇▇ ▇▇▇▇▇▇ of the Guaranty.
Our opinions in paragraphs 1 and 2 are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
We are members of the Bar of the State of New York and express
no opinion herein concerning any law other than the laws of the State of New
York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied by you for any
other purpose, or relied upon by or furnished to any other person, firm or
corporation without our prior written consent, except that the Owner
Participant may furnish a copy of this opinion to a potential transferee or
participant of the interest of such entity or otherwise as required by a
governmental authority.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(b)
[Letterhead of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
In my capacity as Assistant General Counsel and Assistant
Secretary of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware corporation, I have
supervised corporate proceedings of (i) PMCC Leasing Corporation, a Delaware
corporation (the "Owner Participant"), in connection with the Owner
Participant's participation in the transactions contemplated by that certain
Participation Agreement (Federal Express Corporation Trust No. N671FE), dated
as of May 1, 1997 (the "Participation Agreement"), among the Owner
Participant, Federal Express Corporation, as Lessee; State Street Bank and
Trust Company of Connecticut, National Association, except as otherwise
stated, not in its individual capacity but solely as Owner Trustee; and First
Security Bank, National Association not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee, Pass Through Trustee and
Subordination Agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware
corporation (the "Guarantor"), in connection with the transactions
contemplated by the Owner Participant Guaranty (the "Guaranty"), dated as of
May 1, 1997 from ▇▇▇▇▇▇ ▇▇▇▇▇▇ to each of the beneficiaries named therein.
This opinion is delivered pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein but not otherwise defined herein,
shall have the respective meanings set forth in the Participation Agreement.
In connection with this opinion, I have examined originals,
or copies certified or otherwise identified to my satisfaction of the
Participation Agreement, the Trust Agreement, the Tax Indemnity Agreement,
the Ancillary Agreement I and the Ancillary Agreement II (each such
document to be hereafter referred to individually as an "Owner Participant
Document" and collectively as the "Owner Participant Documents") and the
Guaranty. I have also examined such corporate documents, records and
instruments of the Owner Participant and the Guarantor as in my judgement
are necessary or appropriate to enable me to render the opinions expressed
below. In rendering such opinions, I have relied upon the representations
and warranties contained in or made pursuant to the Owner Participant
Documents and the Guaranty and have assumed the due authorization,
execution and delivery of all documents and instruments by all parties
thereto other than the Owner Participant.
Based on the foregoing and subject to the qualifications and
matters of reliance set forth herein, I am of the opinion that:
1. The Owner Participant is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Owner Participant Documents and
to fulfill and comply with the terms, conditions and other provisions
thereof.
2. The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Guaranty and to fulfill and
comply with the terms, conditions and other provisions thereof.
3. The Owner Participant Documents have been duly authorized
by all necessary corporate action on the part of the Owner
Participant, and have been duly executed and delivered by the Owner
Participant.
4. The Guaranty has been duly authorized by all necessary
corporate action on the part of the Guarantor, and has been duly
executed and delivered by the Guarantor.
5. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the Owner
Participant of the Owner Participant Documents.
6. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the
Guarantor of the Guaranty.
7. There are no actions, suits or proceedings (whether or not
purportedly on behalf of the Owner Participant) pending or, to my
knowledge, threatened against or affecting the Owner Participant or
any property rights of the Owner Participant at law or in equity or
before any commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Owner
Participant or its ability to perform its obligations under the Owner
Participant Documents or which would affect the legality, validity or
enforceability of such Owner Participant Documents.
8. There are no actions, suits or proceedings (whether or
not purportedly on behalf of the Guarantor) pending or, to my
knowledge, threatened against or affecting the Guarantor or any
property rights of the Guarantor at law or in equity or before any
commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Guarantor or
its ability to perform its obligations under the Guaranty or which
would affect the legality, validity or enforceability of such
Guaranty.
9. Neither the execution and delivery of the Owner Participant
Documents, the consummation of the transactions therein contemplated
nor the fulfillment of or compliance with the terms, conditions and
other provisions thereof will conflict with, or result in any breach
of, any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Owner Participant, (ii) any order,
injunction or decree of any court or governmental instrumentality
binding upon the Owner Participant, (iii) the Certificate of
Incorporation or Bylaws of the Owner Participant, or (iv) any bond,
debenture, note, mortgage indenture or other agreement or instrument
to which the Owner Participant is now a party or by which the
property of the Owner Participant may be bound.
10. Neither the execution and delivery of the Guaranty, the
consummation of the transactions therein contemplated nor the
fulfillment of or compliance with the terms, conditions and other
provisions thereof will conflict with, or result in any breach of,
any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Guarantor, (ii) any order, injunction or
decree of any court or governmental instrumentality binding upon the
Guarantor, (iii) the Certificate of Incorporation or Bylaws of the
Guarantor, or (iv) any bond, debenture, note, mortgage indenture or
other agreement or instrument to which the Guarantor is now a party
or by which the property of the Guarantor may be bound.
I am a member of the bar of the State of New York, and I do
not purport to be conversant with, or to express any opinion herein
concerning, the laws of any jurisdiction other than those of the State of
New York and the United States of America and the General Corporation Law
of the State of Delaware. In addition, I express no opinion concerning the
laws of the State of New York, the United States of America or any other
jurisdiction applicable to the offering or sale of securities. Further, I
have made no investigation and express no opinion, as to any aviation law
or other laws, statutes, rules or regulations applicable due to the
particular nature of the equipment subject to the Lease.
This opinion is solely for the benefit of the addresses hereof
and their respective successors and assigns for use in connection with the
transactions contemplated by the Owner Participant Documents and may not be
relied upon by any other person or for any other purpose without my express
written consent. This opinion may be relied upon by Messrs. Simpson, Thacher
& ▇▇▇▇▇▇▇▇ in rendering their opinion of even date herewith.
Very truly yours,
▇▇▇▇▇ ▇. Rights
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(3)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Participation Agreement (Federal Express Corporation
Trust No. N671FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express Corporation, as Lessee, PMCC Leasing
Corporation, as Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee, and First Security, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent. Pursuant
to the Participation Agreement, one Airbus A300F4-605R aircraft bearing
U.S. Registration No. N671FE (the "Aircraft") is being financed. This
opinion is furnished pursuant to Section 4.01(k)(iv) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined are
used as defined in the Participation Agreement, except that references
herein to any instrument shall mean such instrument as in effect on the
date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Indenture;
(c) The Ancillary Agreement I;
(d) The Ancillary Agreement II:
(e) The Collateral Account Control Agreement;
(f) The Certificates; and
(g) The French Pledge Agreement;
(each of the documents identified in paragraphs (a) through (g) above are
collectively referred to as the "Indenture Trustee Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Indenture
Trustee Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers, and each of First
Security and the Indenture Trustee, as the case may be, has or had,
on the date of execution thereof, full corporate power, authority and
legal right to execute, deliver and perform each of the Indenture
Trustee Documents to which it is or is to be a party and to
authenticate the Certificates delivered on the Certificate Closing
Date.
2. Each of First Security and the Indenture Trustee, as the
case may be, has duly authorized, executed and delivered each
Indenture Trustee Document to which it is a party; each such document
constitutes a legal, valid and binding obligation of the Indenture
Trustee (and, to the extent set forth in the respective Indenture
Trustee Document, of First Security) enforceable against the
Indenture Trustee (and, to the extent set forth in the respective
Indenture Trustee Document, against First Security) in accordance
with its terms.
3. The Certificates issued and dated the Certificate Closing
Date have been duly authenticated and delivered by the Indenture
Trustee pursuant to the terms of the Indenture.
4. Neither the authorization, execution and delivery by the
Indenture Trustee or First Security, as the case may be, of the
Indenture Trustee Documents, nor the authentication and delivery by
the Indenture Trustee of the Certificates nor the fulfillment or
compliance by the Indenture Trustee or First Security with the
respective terms and provisions thereof nor the consummation of any
of the transactions by the Indenture Trustee or First Security, as
the case may be, contemplated thereby, requires the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any court or administrative
or governmental authority or agency of the State of Utah or the
United States of America governing the banking or trust powers of
First Security.
5. The execution, delivery and performance by the Indenture
Trustee or First Security, as the case may be, of each of the
Indenture Trustee Documents and the authentication and delivery of
the Certificates by the Indenture Trustee are not in violation of the
charter or by-laws of First Security or of any law, governmental
rule, or regulation of the State of Utah or the United States of
America governing the banking or trust powers of First Security or,
to our knowledge, of any indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term lease, license or other
agreement or instrument to which it is a party or by which it is
bound or, to our knowledge, of any judgment or order of the State of
Utah or the United States of America relating to the banking or trust
powers of First Security.
6. There are no fees, taxes or other governmental charges
payable by the Owner Trustee, the Indenture Trustee (except taxes
imposed on fees payable to First Security) or the Certificate Holders
to the State of Utah or any political subdivision thereof in
connection with the execution, delivery or performance of any of the
Operative Agreements or in connection with the issuance and
acquisition of the Certificates by the Certificate Holders or the
beneficial interests of the Certificate Holders in the Trust
Indenture Estate solely because First Security) (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. Neither the
Indenture Trustee nor the trust created under the Indenture will be
subject to any fee, tax or other governmental charge (except for
taxes imposed on fees payable to First Security) under the laws of
the State of Utah or any political subdivision thereof in existence
on the date hereof, on, based on or measured by, directly or
indirectly, the gross receipts, net income or value of the Trust
Indenture Estate solely because First Security (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. There is no fee,
tax or other governmental charge (except for taxes imposed on fees
payable to First Security) under the laws of the State of Utah or any
political subdivision thereof in existence on the date hereof, on,
based on or measured by any payments under the Certificates by reason
of the creation of the trust under the Indenture solely because First
Security (a) is incorporated under the laws of the State of Utah, (b)
has its principal place of business in the State of Utah, (c)
performs (in its individual capacity or as Indenture Trustee) any or
all of its duties under the Indenture Trustee Documents in the State
of Utah, and (d) engages in any activities unrelated to the
transactions contemplated by the Indenture Trustee Documents in the
State of Utah. We express no opinion as to whether or not any fees,
taxes or other charges are now or hereafter may be payable by the
Owner Participant to the State of Utah or any political subdivision
thereof in connection with (a) the execution, delivery or performance
by any of the Indenture, the Participation Agreement or any of the
other Operative Agreements and (b) the making by the Owner
Participant of its investment in the Aircraft.
7. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting First
Security or the Indenture Trustee, as the case may be, or any of its
properties in any court or before any administrative agency or
arbitrator, which, if adversely determined, would materially
adversely affect the ability of First Security or the Indenture
Trustee, as the case may be, to perform its obligations under any of
the Indenture Trustee Documents, and there are no pending or, to our
knowledge, threatened actions or proceedings before any court,
administrative agency or tribunal involving First Security or the
Indenture Trustee, as the case may be, in connection with the
transactions contemplated by any of the Indenture Trustee Documents.
The foregoing opinions are subject to the following
assumptions, exceptions and qualifications:
A. We are admitted to practice law in the State of Utah and we
do not hold ourselves out as being experts on the laws of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Utah, the federal laws of the United States of America governing the banking
and trust powers of First Security and Title II of the United States Code
entitled "Bankruptcy". However, we express no opinion with respect to (i)
federal securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) the Federal Aviation Act of 1958, as amended and (iii)
state securities or blue sky laws. Insofar as the foregoing opinions relate
to the validity and enforceability in the State of Utah of the Certificates
and the other Indenture Trustee Documents expressed to be governed by the laws
of the State of New York, we have assumed that the laws of New York are
identical to the laws of Utah in all material respects, and that the
Certificates and such Indenture Trustee Documents constitute legal, valid,
binding and enforceable documents or instruments under such laws (as to which
we express no opinion). No opinion is expressed as to the priority of any
security interest or as to title to any part of the Trust Estate.
B. The foregoing opinions regarding enforceability of any
document or instrument, are subject to (i) applicable bankruptcy, insolvency,
moratorium, reorganization, receivership and similar laws affecting the rights
and remedies of creditors generally, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than First Security and the
Indenture Trustee, of the Indenture Trustee Documents to which each is a party
and that each of such parties has the full power, authority and legal right to
execute and deliver each such document.
D. We have assumed that all signatures (other than those of
the Indenture Trustee or First Security) on documents and instruments
examined by us are genuine, that all documents and instruments submitted to
us as originals are authentic, and that all documents and instruments
submitted to us as copies conform with the originals, which facts we have
not independently verified.
E. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(4)(a)(i)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No. N671FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N671FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this opinion to
you in accordance with Section 4.01 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the enforceability
of any particular provision of any of the Owner Trustee Documents
relating to remedies after default or as to the availability of any
specific or equitable relief of any kind. However, we are of the
opinion that, subject to the other limitations and qualifications
contained in this opinion, the remedies provided in the Owner Trustee
Documents, taken as a whole, are adequate for the realization of the
principal benefits or security of said agreements (except for the
economic consequences of procedural or other delay); and
(iv) the enforcement of any rights and the availability
of any specific or equitable relief of any kind may in all cases be
subject to an implied duty of good faith and to general principles of
equity (regardless of whether such enforceability or relief is
considered in a proceeding at law or in equity) and, as to any of
your rights to collateral security, will be subject to a duty to act
in a commercially reasonable manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has full corporate power, authority and legal right to execute,
deliver and perform its obligations under the Trust Agreement and, as
Owner Trustee under the Trust Agreement, to execute, deliver and
perform its obligations under the other Owner Trustee Agreements and
to issue, execute, deliver and perform its obligations under the
Certificate.
2. State Street has duly authorized, executed, and delivered
the Participation Agreement and the Trust Agreement and the
Participation Agreement and the Trust Agreement constitute the legal,
valid and binding obligation of State Street, enforceable against it
in its individual capacity in accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. To our knowledge, there exist no liens or encumbrances
affecting the right, title and interest of the Owner Trustee in and
to the Trust Estate resulting from claims against State Street not
related to the ownership of the Trust Estate or any other transaction
contemplated by the Operative Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
+▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N671FE) dated as of May 1, 1997 (the
"Indenture"), between First Security Bank, National Association
(the "Indenture Trustee"), and State Street Bank and Trust
Company of Connecticut, National Association, not in its
individual capacity, but solely as Owner Trustee (the "Owner
Trustee")
Ladies and Gentlemen:
We have acted as special Connecticut counsel to the Owner
Trustee in connection with the Indenture and the Collateral Account Control
Agreement dated as of May 1, 1997 (the "Control Agreement"), among the Owner
Trustee, the Indenture Trustee and State Street Bank and Trust Company, as
Custodian (the "Custodian").
We are issuing this opinion solely in our capacity as counsel
to the Owner Trustee under the circumstances set forth in this paragraph and
solely as to the matters set forth herein. Pursuant to the Indenture, the
Owner Trustee purports to grant to the Indenture Trustee a security interest,
inter alia, in those securities and instruments, presently owned or hereafter
acquired by the Owner Trustee, that are from time to time credited to an
account numbered [*****] (the "Collateral Account") established by the Owner
Trustee with the Custodian and which securities and instruments the Owner
Trustee has directed the Custodian to identify on the books and records of the
Custodian as being subject to a security interest in favor of the Indenture
Trustee to secure the payment to the Indenture Trustee of the Owner Trustee's
obligations (the "Obligations") under the Indenture. Those securities and
instruments which the Owner Trustee has directed the Custodian to so identify
on the books of the Custodian as being subject to such security interest, and
which, at the time of reference thereto, have not been withdrawn from such
identification or the Collateral Account, are hereinafter referred to,
collectively, as the "Liquid Collateral." We have assumed with your
permission for purposes of this opinion that the Liquid Collateral consists
solely of (a) "securities", either "uncertificated securities" or
"certificated securities", as each such term is defined in Section 8-102 of
the Uniform Commercial Code as currently in effect in the State of Connecticut
(the "Connecticut UCC"), (b) "instruments" (as such term is defined in Section
9-105(1)(i) of the Connecticut UCC) and (c) "general intangibles" (as such
term is defined in Section 9-106 of the Connecticut UCC).
For purposes of this opinion, we have examined the Indenture,
the Control Agreement and such other documents and instruments as are referred
to as having been examined by us for purposes of our opinion letter dated May
___,1997, addressed to the parties listed on Schedule A hereto.
As to all matters of fact, we have examined and have relied
entirely upon the representations and warranties contained in and made
pursuant to the Indenture and the Control Agreement, without any independent
investigation of any kind.
We have assumed the genuineness of all signatures (other
than those on behalf of the Owner Trustee and the Custodian), the
conformity to the originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form, and the legal competence of each individual
executing any document (other than on behalf of the Owner Trustee and the
Custodian).
For purposes of this opinion, we have made such examination of
law as we have deemed necessary. This opinion is limited solely to the
internal substantive laws of the State of Connecticut as applied by courts
located in the State of Connecticut and, where applicable, (i) the revised
Article 8 of the Uniform Commercial Code (with Conforming and Miscellaneous
Amendments to Articles 1, 3, 4, 5, 9 and 10) 1994 Official Text (the "Revised
Article 8") and (ii) the federal laws of the United States of America, in each
case without regard to choice of law. No opinion is given as to the choice of
law which any tribunal may apply to the transactions referred to herein.
Our opinion is further subject to the following exceptions,
qualifications and assumptions, all of which we understand to be acceptable to
you:
(a) We have assumed without any independent investigation
that each party to the transactions contemplated by the Indenture or
the Control Agreement at all times relevant thereto (other than the
Owner Trustee) was duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was
incorporated or organized, and had and has the full power, authority
and legal right under its certificate of incorporation, articles of
organization and other governing documents, corporate or other
enterprise legislation and applicable laws, as the case may be, to
execute and deliver and perform its obligations under all documents
executed by it in connection with those transactions.
(b) We have assumed without any independent investigation
(i) the due authorization, execution and delivery of each of the
Indenture and the Control Agreement by the Indenture Trustee, (ii)
that the execution, delivery and performance by the Indenture
Trustee of each of the Indenture and the Control Agreement does
not and will not conflict with, or result in a breach of, the
terms, conditions or provisions of, or result in a violation of,
or constitute a default or require any consent (other than such
consents as have been duly obtained) under, any organizational
document, any order, judgment, arbitration award or stipulation,
or any agreement, to which the Indenture Trustee is a party or is
subject or by which any of the properties or assets of the
Indenture Trustee is bound, (iii) that the Owner Trustee has
received "value," as defined under the Connecticut UCC, for the
incurrence of the Obligations, (iv) that, whenever the Custodian
receives instructions from the Owner Trustee for the Custodian to
note on its books and records that any securities or instruments
credited to the Collateral Account are to be subject to a security
interest in favor of the Indenture Trustee to secure the payment
of the Obligations, such instructions will have been duly
authorized by or on behalf of the Owner Trustee and (v) that, when
the Indenture Trustee is to act in connection with any of the
transactions contemplated by the Indenture, it is acting in its
capacity as Indenture Trustee.
(c) We have made no examination of, and no opinion is given
herein as to, the Owner Trustee's title to or other ownership rights
in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, the Liquid Collateral, other than the
security interest in favor of the Indenture Trustee as contemplated
by the Indenture and the Control Agreement, and have assumed that the
Owner Trustee has, or at the time of any purported attachment of the
security interest in the relevant Liquid Collateral will have, rights
in the Liquid Collateral.
(d) The perfection and the effect of perfection and
non-perfection of a security interest in the Liquid Collateral that
comprises "uncertificated securities" are, pursuant to Section
9-103(6) of the Connecticut UCC, and the effectiveness of
registration by the issuer and the rights and duties of the issuer
with respect to the registration of transfer, pledge or release of an
"uncertificated security" are, pursuant to Section 8-106 of the
Connecticut UCC, in each case, governed by the laws of the respective
jurisdictions of organization of the issuer or issuers of such
securities, including the conflict of laws rules of such
jurisdictions. Therefore, we express no opinion with respect to such
matters regarding "uncertificated securities" issued by issuers
organized outside of the State of Connecticut other than book-entry
Treasury securities referred to below.
(e) We point out that, pursuant to Part 357 of Title 31 of
the United States Code of Federal Regulations ("CFR"), with
respect to United States "book-entry Treasury securities"
maintained by a Federal Reserve Bank and, pursuant to other
relevant sections of the CFR, with respect to various other
securities issued or guaranteed by the federal government of the
United States or an agency thereof or a corporation sponsored
thereby and maintained by a Federal Reserve Bank, the perfection
of security interests granted by commercial, non-governmental
parties in book-entry Treasury securities, or such other federal
securities, as the case may be, held in a securities account of a
participant financial institution, such as the Custodian,
maintaining such account with such Federal Reserve Bank, will be
governed by the law of the jurisdiction determined in accordance
with Section 357.11 of Title 31 of the CFR. If that jurisdiction
has not adopted Revised Article 8, then such jurisdiction will be
deemed to have adopted Revised Article 8 for purposes of
determining the law governing such perfection. Accordingly,
although Revised Article 8 has not been enacted by Connecticut as
part of the Connecticut UCC, nevertheless, pursuant to Part 357 of
Title 31 of the CFR, Revised Article 8 governs the perfection of a
security interest in book-entry Treasury securities to the extent
that Connecticut law would otherwise be applicable thereto.
(f) We have also assumed that (i) any securities comprised in
the Liquid Collateral and held by Depository Trust Company or another
clearing corporation will be held by Depository Trust Company or such
other clearing corporation for the direct account of the Custodian
and not for the account of the Custodian through any other financial
intermediary, (ii) any securities comprised in the Liquid Collateral
and not constituting either (x) "certificated securities" (as defined
in Section 8-102 of the Connecticut UCC) for which the Custodian
physically holds the certificate or certificates evidencing solely
such securities, or (y) "uncertificated securities" (as defined in
Section 8-102 of the Connecticut UCC) for which the Custodian is the
registered owner on the books of the issuer solely of such
securities, will constitute, or will be held as part of, a fungible
bulk of such "securities" that are registered in the name of the
Custodian or are shown on the Custodian's account on the books of
another financial intermediary, (iii) any "certificated securities"
(as defined in Section 8-102 of the Connecticut UCC) comprised in the
Collateral, if held directly by the Custodian, will be at all times
in the physical possession of the Custodian, and any other
"instruments" (as defined in Section 9-105(1)(i) of the Connecticut
UCC) comprised in the Collateral will be at all times held directly
by and in the physical possession of the Custodian, and (iv) any
securities comprised in the Liquid Collateral consisting of
"book-entry Treasury securities" or other uncertificated federal
securities will be credited to a direct account of the Custodian with
a Reserve Bank (as such term is defined in the relevant section of
the CFR) and not for the account of the Custodian through a financial
intermediary.
(g) We do not express any opinion as to the attachment or
perfection of any security interest in (i) any securities that are
maintained with, or held on the system of, Cedel S.A., or any like
maintenance, clearing or settlement system operating outside of the
United States of America, (ii) any collateral of a type other than
"securities" or "general intangibles" (as defined in Section 9-106 of
the Connecticut UCC) or "instruments" (as defined in Section
9-105(1)(i) of the Connecticut UCC), (iii) the Collateral Account, to
the extent that the Collateral Account constitutes an asset, other
than general intangibles, separate from the property credited
thereto, (iv) any Liquid Collateral which, at the time of reference
thereto, is no longer identified as subject to a security interest
in favor of the Indenture Trustee or has otherwise been withdrawn from
the Collateral Account, or (v) any identifiable proceeds of any Liquid
Collateral (A) following the lapse of the ten day period set forth in
Section 9-306(3) of the Connecticut UCC, to the extent that such
proceeds do not constitute securities, instruments or general
intangibles in which a security interest is perfected in the manner
contemplated by this opinion, as if such proceeds were original
Liquid Collateral, (B) where such proceeds constitute securities and
in which proceeds a security interest is not perfected in the manner
contemplated by this opinion, as if such proceeds were original
collateral, or (C) where the proceeds constitute collateral which is
excluded from Article 8 or 9 of the Connecticut UCC.
(h) We express no opinion as to the priority of such security
interest over any other or competing interest in or claims against
such Liquid Collateral.
(i) We have assumed that (i) the Custodian, in the ordinary
course of business, accepts for deposit securities as a service for
its customers, maintains securities accounts in the names of such
customers reflecting ownership of or interests in such securities,
and, in regard to the transactions contemplated by the Indenture, is
acting in such capacity, (ii) all securities from time to time
credited to the Collateral Account and to be comprised in the Liquid
Collateral will have been "transferred" (within the meaning of
Section 8-313(1) of the Connecticut UCC) to the Custodian by the
issuers or prior holders of such Liquid Collateral, (iii) the records
of the Custodian indicate and will, at the time of reference thereto,
indicate that the aggregate amount of each security comprised in the
Liquid Collateral, together with all other such securities carried by
the Custodian for its customers and for its proprietary account, is
at least equal to the aggregate amount of such security carried by it
for its customers and for its proprietary account, (iv) the books and
records of the Custodian indicate and will, at the time of reference
thereto, indicate that the securities to be comprised in the Liquid
Collateral are registered on the books and records of the Custodian
as being for the beneficial account of the Owner Trustee, subject to,
as identified on such books and records, the security interest
therein in favor of the Indenture Trustee, and (v) the Custodian has
sent and, at the time of reference thereto, will have sent the
confirmations of such entries and identifications to the Indenture
Trustee and to Federal Express Corporation.
(j) In so far as our opinion relates to the enforceability
of any obligations of the Owner Trustee, the enforcement of such
obligations may be limited by bankruptcy, insolvency,
reorganization, moratorium, marshalling or other laws and rules of
law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights); and we express no opinion as to
(i) the status under Section 548 of the Bankruptcy Code and
applicable state fraudulent conveyance laws of the obligations of
the Owner Trustee under the Indenture or interests purported to be
granted pursuant to the Indenture, (ii) the enforceability of any
particular provision of the Indenture relating to remedies after
default or as to the availability of any specific or equitable
relief of any kind (and we point out that the enforcement of any
of your rights may in all cases be subject to an implied duty of
good faith and fair dealing and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity, and, as to any of your rights to
collateral security, will be subject to a duty to act in a
commercially reasonable manner) or (iii) the enforceability of any
particular provision of the Indenture relating to (A) waivers of
defenses, of rights to trial by jury, or rights to object to
jurisdiction or venue and other rights or benefits bestowed by
operation of law, (B) the effect of suretyship defenses, or
defenses in the nature thereof, with respect to obligations of any
applicable guarantor, joint obligator or surety, (C) waivers of
provisions which are not capable of waiver under Sections 1-102(3)
and 9-501(3) of the Connecticut UCC, (D) the grant of powers of
attorney to the Indenture Trustee, (E) exculpation clauses,
indemnity clauses and clauses relating to releases or waivers of
unmatured claims or rights, (F) interest or other charges that may
be usurious under applicable law, or (G) the collection of
interest on overdue interest or providing for a penalty rate of
interest or late charges on overdue or defaulted obligations.
However, notwithstanding the qualification set forth in the
foregoing clause (ii), and excluding the parenthetical in that
clause, subject to the other exceptions, qualifications and
limitations set forth in this opinion (including the parenthetical
in clause (ii) and subject to the fact that there may be economic
consequences arising out of any procedural or other delay on
account of the limitation or unenforceability of any particular
provision of the Indenture relating to remedies after default,
such limitation or unenforceability does not, in our judgment,
render the provisions of the Indenture and the Control Agreement
relating to remedies after default, taken as a whole, inadequate
for the practical realization of the benefits of enforcement of a
security interest in the Liquid Collateral following the receipt
by the Custodian of an enforcement notice properly given under the
Indenture and the Control Agreement by the Indenture Trustee to
the Custodian with respect to such Liquid Collateral.
(k) With respect to property as to which the security
interest purported to be granted pursuant to the Indenture
attaches after the date hereof, we call to your attention that
Section 552 of the Bankruptcy Code limits the extent to which
assets acquired by a debtor after the commencement of a case under
the United States Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by the
debtor before the commencement of such case. We further call to
your attention that under Section 547 of the Bankruptcy Code, a
security interest that attaches within the relevant period set
forth in Section 547(b)(4) of the Bankruptcy Code may be avoidable
under certain circumstances.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Indenture Trustee has, under the terms of the
Connecticut UCC and, in the case of book-entry Treasury
securities, under the CFR, a perfected security interest in the
Liquid Collateral that constitutes "securities" (as such term is
defined in Section 8-102 of the Connecticut UCC), or "instruments"
(as defined in Section 9-105(1)(i) of the Connecticut UCC), and in
the identifiable proceeds thereof to secure the payment of the
Obligations.
2. The Indenture creates, under the terms of the Connecticut
UCC, a valid security interest in such of the Liquid Collateral that
constitutes "general intangibles" (as such term is defined in Section
9-106 of the Connecticut UCC) and in the identifiable proceeds
thereof to secure the payment of the Obligations. Upon the filing of
a financing statement on form UCC-1 pursuant to the Connecticut UCC
with the Secretary of State of the State of Connecticut naming the
Owner Trustee as Debtor and the Indenture Trustee as Secured Party
and accurately describing the Liquid Collateral and the Collateral
Account, which filing has been duly effected, such security interest
will be perfected (to the extent that the perfection of a security
interest in the Liquid Collateral can be accomplished by the filing
in Connecticut of financing statements under the Connecticut UCC).
We point out that:
(a) The effectiveness of a financing statement will lapse (i)
on the expiration of a five-year period from their dates of filing,
or (if later) five years from the last date as to which such
financing statements were effective following the proper filing of
continuation statements with respect thereto, unless continuation
statements are filed within six months prior to the expiration of the
applicable five-year period, (ii) with respect to general intangibles
in which a security interest has been perfected by the filing of a
financing statement in the jurisdiction of the location of the
debtor, for a period of more than four months after the debtor has
changed its location from that jurisdiction to a new jurisdiction
unless such security is perfected in the new jurisdiction within the
earlier to occur of the end of such four month period or the date on
which such financing statement would have otherwise lapsed, and (iii)
with respect to "investment property," under and as defined in
Revised Article 8, in which a security interest has been perfected by
the filing of a financing statement in the jurisdiction of the
location of the debtor, from the time that the debtor changes its
location from that jurisdiction to a new jurisdiction unless such
security interest is perfected in the new jurisdiction on or before
the time of such change of location.
(b) If any debtor changes its name, identity or corporate
structure such that any financing statement becomes misleading, such
financing statement will be ineffective to perfect a security
interest in any collateral acquired by such debtor more than four
months after such change.
We assume no obligation to update this opinion as a result of
any change in any fact, circumstance or statute or other rule of law
occurring after the date hereof.
This opinion is delivered to you solely in connection with the
transactions referred to herein and for your sole use and no other
person or entity may rely on this opinion without our express written
consent.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(4)(a)(ii)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Delivery Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No.N671FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N671FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this Opinion to
you in accordance with Section 4.02 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the
enforceability of any particular provision of any of the Owner
Trustee Documents relating to remedies after default or as to the
availability of any specific or equitable relief of any kind.
However, we are of the opinion that, subject to the other
limitations and qualifications contained in this opinion, the
remedies provided in the Owner Trustee Documents, taken as a
whole, are adequate for the realization of the principal benefits
or security of said agreements (except for the economic
consequences of procedural or other delay); and
(iv) the enforcement of any rights and the
availability of any specific or equitable relief of any kind may
in all cases be subject to an implied duty of good faith and to
general principles of equity (regardless of whether such
enforceability or relief is considered in a proceeding at law or
in equity) and, as to any of your rights to collateral security,
will be subject to a duty to act in a commercially reasonable
manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has or had, on the date of execution thereof, full corporate power,
authority and legal right to execute, deliver and perform its
obligations under the Trust Agreement and, as Owner Trustee under the
Trust Agreement, to execute, deliver and perform its obligations
under the other Owner Trustee Agreements and to issue, execute,
deliver and perform its obligations under the Certificate.
2. State Street has or had, on the date of execution thereof,
duly authorized, executed, and delivered the Participation Agreement
and the Trust Agreement and the Participation Agreement and the Trust
Agreement constitute the legal, valid and binding obligation of State
Street, enforceable against it in its individual capacity in
accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. The Owner Trustee has received such title to the Aircraft
as has been conveyed to it subject to the rights of the Owner Trustee
and the Lessee under the Lease and the security interest created
pursuant to the Indenture and the Lease; and to our knowledge, there
exist no liens or encumbrances affecting the right, title and
interest of the Owner Trustee in and to the Trust Estate resulting
from claims against State Street not related to the ownership of the
Trust Estate or any other transaction contemplated by the Operative
Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(5)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Pass Through Trust Agreement dated as of May 1, 1997
(the "Pass Through Trust Agreement"), as supplemented by the Series
Supplements dated the date hereof between Federal Express Corporation and
the First Security, not in its individual capacity, except as otherwise
stated, but solely as Pass Through Trustee, designated as Series Supplement
1997-1-A, 1997-1-B and 1997-1-C, respectively (the "Series Supplements")
and the Participation Agreement (Federal Express Corporation Trust No.
N671FE), dated as of May 1, 1997 (the "Participation Agreement"), among
Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent. Pursuant to the Participation
Agreement, one Airbus A300F4-605R aircraft bearing U.S. Registration No.
N671FE (the "Aircraft") is being financed. This opinion is furnished
pursuant to Section 4.01(k)(iv) of the Participation Agreement.
Capitalized terms used herein and not otherwise defined are used as defined
in the Participation Agreement, except that references herein to any
instrument shall mean such instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Pass Through Trust Agreement;
(b) The Series Supplements;
(c) The Pass Through Certificates;
(d) The Participation Agreement;
(e) The Intercreditor Agreement; and
(f) Each Liquidity Facility.
(each of the documents identified in paragraphs (a) through (e) are being
collectively referred to as the "Pass Through Trustee Documents" and each of
the documents identified in paragraphs (d) through (f) are being collectively
referred to as the "Subordination Agent Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Pass Through
Trustee Documents or the Subordination Agent Documents, as the case may be.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
With respect to the opinions set forth in paragraph 8 above,
with your permission we have relied upon, and this opinion is limited by, the
assumptions set forth in the discussion entitled "Certain Utah Taxes" in the
Prospectus Supplement to the Prospectus forming part of Registration Number
No. 333-07691 (the "Registration Statement") for the registration of the Pass
Through Certificates with the Securities and Exchange Commission. We express
no opinion as to the correctness of the foregoing assumptions and we have
conducted no independent investigation in this regard.
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers.
2. Each of First Security, the Pass Through Trustee and the
Subordination Agent, as the case may be, has or had, on the date of
execution thereof, full corporate power, authority and legal right to
execute, deliver and perform each of the Pass Through Trustee
Documents and the Subordination Agent Documents, as the case may be,
and to authenticate the Pass Through Certificates delivered on the
Certificate Closing Date.
3. Each of First Security, the Pass Through Trustee and the
Subordination Agent has duly authorized, executed and delivered each
Pass Through Trustee Document or Subordination Agent Document, as the
case may be; each such document constitutes a legal, valid and
binding obligation of the Pass Through Trustee or the Subordination
Agent, as the case may be (and, to the extent set forth in the
respective Pass Through Trustee Document or Subordination Agent
Document, of First Security) enforceable against the Pass Through
Trustee or the Subordination Agent, as the case may be (and, to the
extent set forth in the respective Pass Through Trustee Document or
Subordination Agent Document, against First Security) in accordance
with its terms.
4. The Pass Through Certificates issued and dated the
Certificate Closing Date have been duly authorized and validly
executed, issued, delivered and authenticated by the Pass Through
Trustee pursuant to the Pass Through Trust Agreement and the Series
Supplements; and the Pass Through Certificates acquired by the
Underwriters under the Underwriting Agreement are enforceable against
the Pass Through Trustee and are entitled to the benefits of the
related Pass Through Trust Agreement and the related Series
Supplements.
5. No order, license, consent, permit, authorization or
approval of or exemption by, and no notice to or filing with, or the
taking of any other action in respect of, any Utah or Federal
governmental authority governing the banking or trust powers of First
Security, the Pass Through Trustee or the Subordination Agent, and no
filing, recording, publication or registration in any public office
is required under Utah or Federal law pertaining to its banking or
trust powers for the due execution, delivery or performance by First
Security, individually or as Pass Through Trustee or Subordination
Agent, as the case may be, of the Pass Through Trustee Documents
(other than the Pass Through Trust Agreement) or the Subordination
Agent Documents, as the case may be, and of the certificate of
authentication, as Pass Through Trustee, on the Pass Through
Certificates, or for the legality, validity, binding effect or
enforceability thereof against First Security, the Pass Through
Trustee or the Subordination Agent, as the case may be.
6. The execution, delivery and performance by the Pass
Through Trustee or First Security, as the case may be, of each of
the Pass Through Documents and the Subordination Agent or First
Security, as the case may be, of each of the Subordination Agent
Documents, and the issuance, execution, delivery and performance
of the Pass Through Certificates by the Pass Through Trustee are
not or were not, on the date of execution thereof, in violation of
the charter or by-laws of First Security or of any law,
governmental rule, or regulation of the State of Utah or the
United States of America governing the banking or trust powers of
First Security or, to our knowledge, of any indenture, mortgage,
bank credit agreement, note or bond purchase agreement, long-term
lease, license or other agreement or instrument to which it is a
party or by which it is bound or, to our knowledge, of any
judgment or order of the State of Utah or the United States of
America relating to the banking or trust powers of First Security.
7. There are no actions, suits, investigations or
proceedings pending or, to our knowledge, threatened against or
affecting First Security, the Pass Through Trustee or the
Subordination Agent or any of its properties in any court or
before any administrative agency or arbitrator, which, if
adversely determined, would materially adversely affect the
ability of First Security, the Pass Through Trustee or the
Subordination Agent, as the case may be, to perform its
obligations under any of the Pass Through Trustee Documents or the
Subordination Agent Documents, as the case may be, and there are
no pending or, to our knowledge, threatened actions or proceedings
before any court, administrative agency or tribunal involving
First Security, the Pass Through Trustee or the Subordination
Agent in connection with the transactions contemplated by any of
the Pass Through Trustee Documents or the Subordination Agent
Documents, as the case may be.
8. Neither the trusts created by the Pass Through Trust
Agreement and the Series Supplements nor the Pass Through Trustee,
in its individual or trust capacity, as the case may be, nor their
respective Affiliates, successors or assigns, will be subject to
any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or
doing business tax), fee or other governmental charge under the
laws of the State of Utah or any political subdivision thereof
(other than taxes imposed on the fees received by State Street
Bank and Trust Company for acting as Pass Through Trustee under
the Series Supplements). Certificate holders who are not
residents of or otherwise subject to tax in Utah will not be
subject to any tax (including, without limitation, net or gross
income, tangible or intangible property, net worth, capital,
franchise or doing business tax), fee or other governmental charge
under the laws of the State of Utah or any political subdivision
thereof as a result of purchasing, owning (including receiving
payments with respect to) or selling a Pass Through Certificate.
There are no applicable taxes under the laws of the State of Utah
or any political subdivision thereof upon or with respect to (a)
the construction, mortgaging, financing, refinancing, purchase,
acquisition, acceptance, rejection, delivery, nondelivery,
transport, location, ownership, insurance, control, assembly,
possession, repossession, operation, use, condition, maintenance,
repair, sale, return, abandonment, replacement, preparation,
installation, storage, redelivery, manufacture, leasing,
subleasing, modification, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application
or disposition of the Aircraft or any interest in any thereof, (b)
payments of Rent or other receipts, income or earnings arising
therefrom or received with respect to the Aircraft or any interest
in any thereof or payable pursuant to the Lease, (c) any amount
paid or payable pursuant to any Operative Agreements, (d) the
Aircraft or any interest therein or the applicability of the Lease
to the Aircraft or any interest in any thereof, (e) any or all of
the Operative Agreements, any or all of the Pass Through
Certificates or any interest in any or all thereof or the
offering, registration, reregistration, issuance, acquisition,
modification, assumption, reissuance, refinancing or refunding of
any or all thereof, and any other documents contemplated thereby
and amendments or supplements hereto and thereto, (f) the payment
of the principal of, or interest or premium on, or other amounts
payable with respect to, any or all of the Pass Through
Certificates, whether as originally issued or pursuant to any
refinancing, refunding, assumption, modification or reissuance, or
any other obligation evidencing any loan in replacement of the
loan evidenced by any or all of the Pass Through Certificates, or
(g) otherwise with respect to or in connection with the
transactions contemplated by the Pass Through Trust Agreement, the
Series Supplements, the Pass Through Certificates and the
Operative Agreements, which would not have been imposed if the
Pass Through Trustee had not had its principal place of business
in, had not performed (either in its individual capacity or as
Pass Through Trustee) any or all of its administrative duties
under the Pass Through Trust Agreement, the Series Supplements,
the Pass Through Certificates and the Operative Agreements in, and
had not engaged in any activities unrelated to the transactions
contemplated by the Pass Through Trust Agreement, the Series
Supplements, the Pass Through Certificates and the Operative
Agreements in, the State of Utah.
9. Each of the Certificates to be delivered to and registered
in the name of the Subordination Agent on the date hereof pursuant to
the Participation Agreement and the Intercreditor Agreement will be
held by the Subordination Agent in trust for the Pass Through Trustee
under the applicable Pass Through Trust Agreement.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(a)
[Letterhead of Kredietbank N.V.]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
I am the manager of the Legal Department of Kredietbank N.V.
("Kredietbank") and have advised Kredietbank and its New York Branch (the
"Branch") in connection with (i) the Irrevocable Revolving Credit Agreement
Class A Certificates, dated as of May 1, 1997 (the "Class A Liquidity
Agreement"), between the Branch and First Security Bank, National
Association, a national banking association, as Subordination Agent under
the Intercreditor Agreement, defined below, and as agent and trustee for
the Federal Express Corporation Pass Through Trust 1997-1-A, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement"), between the Branch and
First Security Bank, National Association, a national banking association,
as Subordination Agent under the Intercreditor Agreement, defined below,
and as agent and trustee for the Federal Express Corporation Pass Through
Trust 1997-1-B (the "Intercreditor Agreement" and, together with the
Liquidity Agreements, the "Liquidity Documents"), and (iii) the
Intercreditor Agreement, dated as of May 1, 1997 (the "Intercreditor
Agreement"), among the Branch, First Security Bank, National Association,
as Pass Through Trustee and as Subordination Agent (the Liquidity
Agreements and the Intercreditor Agreement are hereinafter collectively the
"Liquidity Documents").
Capitalized terms herein which are undefined have the meanings
assigned to them in the Liquidity Documents.
I am rendering this opinion in my capacity as manager of the
Legal Department and without being personally liable to any extent for the
opinions expressed herein.
In connection with the opinions hereinafter given, I have
examined a copy of each of the Liquidity Documents and such other
certificates, documents, agreements and instruments as I have deemed
necessary as a basis for the opinions expressed below.
In such examination, I have assumed the genuineness of all
signatures, the authenticity of all agreements, certificates, instruments and
documents submitted to me as originals, and the conformity to the originals of
all agreements, certificates, instruments and documents submitted to me as
copies. As to questions of fact material to the opinions expressed below, I
have, when relevant facts were not independently established by me, examined
and relied upon representations of officers of Kredietbank.
Based upon the foregoing examination and assumptions, and
subject to the qualifications set forth below, I am of the opinion that:
1. Kredietbank is duly organized and validly existing as a
Belgian public law banking institution under the law of Belgium and
has full power and authority (corporate and otherwise) to execute,
deliver and perform the Liquidity Documents.
2. [▇▇▇ ▇▇▇▇▇] or [▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇], acting together with
[▇▇▇▇ ▇▇▇▇▇▇▇], if acting for and on behalf of the Branch, are
duly authorized by Kredietbank to execute and deliver the
Liquidity Documents for and on behalf of the Branch. Assuming
each of the Liquidity Documents has been duly executed and
delivered for and on behalf of the Branch by such persons, no
further authorization by or any corporate action of Kredietbank is
required in connection with the execution, delivery and
performance thereof.
3. The governing-law clause, subjecting the Liquidity
Documents to New York law, is valid under Belgian law.
(i) Under Belgian law, New York law will be applied to an
agreement, such as the Liquidity Documents, which under Belgian
law has been validly subjected to New York laws.
(ii) (a) None of the terms of the Liquidity Documents
is irreconcilable with important principles of Belgian law,
and (b) there are no mandatory provisions of Belgian law
which must be applied to the transactions covered by the
Liquidity Documents.
(iii) Each of the Liquidity Documents constitutes the
legal, valid and binding obligation of Kredietbank,
enforceable against Kredietbank in accordance with its
terms, the rules of civil procedures of Belgium and the
applicable provisions of the chosen law of New York.
4. No authorization, consent, approval or other action by,
and no notice to or filing with, any governmental, administrative
or other authority or court of Belgium is required for the
execution or delivery of the Liquidity Documents by Kredietbank
through the Branch or for the performance by Kredietbank or by the
Branch of the Liquidity Documents.
5. The execution, delivery and performance of the Liquidity
Documents by Kredietbank or the Branch will not result in any
violation by Kredietbank or by the Branch of any law of Belgium.
6. The contractual obligations incurred by virtue of the
execution and delivery of the Liquidity Documents for and on behalf
of the Branch are the obligations of Kredietbank, and Kredietbank has
no defenses against the performance of such obligations which are
based on the fact that Kredietbank had acted through the Branch in
executing and delivering the Liquidity Documents.
7. If a final and conclusive judgment of the Supreme Court of
the State of New York, New York County, or of the Untied States
District Court for the Southern District of New York for a definite
sum for the recovery of amounts due and unpaid under the Liquidity
Documents were to be rendered against Kredietbank, a reexamination or
relitigation on the merits of the subject matter thereof in
accordance with Article 570 of the Belgian Judicial Code would be
necessary in order to obtain recognition and/or enforcement of such
judgment in Belgium.
8. The obligations of Kredietbank under the Liquidity
Documents rank at least equal in priority of payment and in all
other respects with its obligations to pay any other unsecured and
unsubordinated obligations of Kredietbank for borrowed money,
including deposit liabilities, that are not expressly preferred by
law.
The foregoing opinions are subject to the following
qualifications:
(i) The opinion in paragraph (3) with respect to
enforceability is subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws affecting creditors' rights generally, applicable to
Kredietbank and to any law or general principle of law from
time to time in effect in Belgium that could be considered by
the Belgian Courts as a provision of public policy.
(ii) In giving the opinions in paragraphs (3)(iii), (6) and
(8), I have assumed, with your consent, that each of the
Liquidity Documents is legal, valid and binding under New York
law, all as set forth more fully in the opinion dated of even
date herewith of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ issued in
connection with the Liquidity Documents.
(iii) No opinion is expressed with respect to the law of any
jurisdiction other than the law of Belgium.
This opinion is being furnished to you solely for your benefit
in connection with the transactions described above and may not be used,
circulated, quoted or otherwise referred to for any other purpose without my
express written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(b)
[Letterhead of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
We have acted as special New York counsel to Kredietbank
N.V., New York Branch (herein called the "Liquidity Provider") in
connection with the transactions contemplated by (i) the Irrevocable
Revolving Credit Agreement Class A Certificates, dated as of May 1, 1997
(the "Class A Liquidity Agreement"), between the Liquidity Provider and
First Security Bank, National Association, as Subordination Agent under the
Intercreditor Agreement, as defined below, as agent and trustee for the
Federal Express Corporation 1997-1-A Pass Through Trust, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement" and, together with the Class
A Liquidity Agreement, the "Liquidity Agreements"), between the Liquidity
Provider and First Security Bank, National Association, as Subordination
Agent under the Intercreditor Agreement, as defined below, as agent and
trustee for the Federal Express Corporation 1997-1-B Pass Through Trust,
and (iii) the Intercreditor Agreement, dated as of May 1, 1997 (the
"Intercreditor Agreement" and, together with the Liquidity Agreements, the
"Liquidity Documents"), among the Liquidity Provider and First Security
Bank, National Association, as Pass Through Trustee and as Subordination
Agent. Capitalized terms used herein but not otherwise defined herein
shall have the meanings provided in the Liquidity Documents.
In rendering the opinion expressed below, we have examined
the Liquidity Documents, the opinion dated the date hereof of ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Esq., manager of the Legal Department of Kredietbank N.V., and such
other documents as we have deemed necessary.
In our examination, we have assumed the authenticity of all
documents submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies. When relevant
facts were not independently established, we have relied upon representations
made in or pursuant to the Liquidity Documents.
In rendering the opinion expressed below, we have assumed, with
respect to each Liquidity Document, that:
(i) it has been duly authorized by, has been duly executed and
delivered by, and (except to the extent set forth in the
opinion below as to the Liquidity Provider) constitutes
legal, valid, binding and enforceable obligations of all of
the parties thereto;
(ii) all signatories thereto have been duly authorized; and
(iii) all of the parties thereto are duly organized and validly
existing and have the power and authority (corporate,
partnership, trust or other) to execute, deliver and perform
thereunder.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinion
expressed below, we are of the opinion that each Liquidity Document
constitutes the legal, valid and binding obligation of the Liquidity
Provider, enforceable against the Liquidity Provider in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or other similar laws
relating to or affecting the rights of creditors generally and except as
the enforceability of such Liquidity Document is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality, reasonableness,
good faith and fair dealing.
The foregoing opinion is subject to the following comments and
qualifications:
(A) The enforceability of provisions in the Liquidity
Documents to the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances.
(B) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which the Liquidity Provider is located (other
than New York) that limit the interest, fees or other charges the
Liquidity Provider may impose for the loan or use of money or other
credit, (ii) Section 7.11(a)(i) of each Liquidity Agreement and
Section 10.11(a)(i) of the Intercreditor Agreement, insofar as such
Sections relate to the subject matter jurisdiction of a Federal court
sitting in New York, New York to adjudicate any controversy related
to the Liquidity Documents, (iii) the waiver of inconvenient forum
set forth in Section 7.11(a)(ii) of each Liquidity Agreement and
Section 10.11(a)(ii) of the Intercreditor Agreement with respect to
proceedings in a Federal court sitting in New York, New York and a
State court of the State of New York and (iv) the waiver of immunity
set forth in Section 10.11(c) of the Intercreditor Agreement with
respect to proceedings in a Federal court sitting in New York, New
York and a State court of the State of New York.
The foregoing opinion is limited to matters involving the
Federal laws of the United States of America and the law of the State of
New York, and we do not express any opinion as to the laws of any other
jurisdiction. In particular, we do not express any opinion as to the laws
of Belgium and, to the extent such laws may be relevant to the opinion
expressed herein, we have, with your permission, relied upon the
aforementioned opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal
Department of Kredietbank N.V., without independently considering the
matters covered thereby, and our opinion is subject to all limitations,
exceptions and qualifications contained therein as if set forth herein in
full.
At the request of the Liquidity Provider, this opinion letter is
provided to you by us in our capacity as special New York counsel to the
Liquidity Provider, and this opinion letter may not be relied upon by any
Person for any purpose other than in connection with the transactions
contemplated by the Liquidity Documents without, in each instance, our prior
written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(7)
[Letter of General Electric Company]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N671FE
Reference is made to (i) that certain Participation Agreement
(Federal Express Corporation Trust No. N671FE), dated as of May 1, 1997
(the "Participation Agreement") by and among Federal Express Corporation,
as Lessee ("Fed Ex"), PMCC Leasing Corporation, as Owner Participant, State
Street Bank and Trust Company of Connecticut, National Association ("SSB")
(not in its individual capacity, except as otherwise expressly set forth
therein, but solely as Owner Trustee), First Security Bank, National
Association ("FSB") (not in its individual capacity, except as otherwise
expressly set forth therein, but solely as Indenture Trustee, Pass Through
Trustee and Subordination Agent); (ii) that certain Purchase Agreement
Assignment (Federal Express Corporation Trust No. N671FE), dated as of May
1, 1997 (the "Purchase Agreement Assignment") between Fed Ex, as Lessee and
SSB, as Lessor; (iii) that certain Lease Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997 (the "Lease")
between SSB (not in its individual capacity, but solely as Owner Trustee),
as Lessor and Fed Ex, as Lessee; (iv) that certain Trust Indenture and
Security Agreement (Federal Express Corporation Trust No. N671FE), dated
as of May 1, 1997 (the "Trust Indenture") between SSB (not in its
individual capacity), as Owner Trustee and FSB (not in its individual
capacity), as Indenture Trustee; and (v) that certain Trust Agreement
(Federal Express Corporation Trust No. N671FE), dated as of May 1, 1997
(the "Trust Agreement") between SSB (not in its individual capacity), as
Owner Trustee and PMCC Leasing Corporation, as Trustor.
I am an attorney employed by General Electric Company, a New York
corporation (the "Engine Manufacturer") and as such have acted as counsel
for the Engine Manufacturer in connection with the execution and delivery
by the Engine Manufacturer of the Consent (the "Consent"), and the Engine
Warranty Assignment (Federal Express Corporation Trust No. N671FE) (the
"Engine Warranty Assignment"), each attached to the Participation Agreement
as Exhibit F and dated as of May 1, 1997. The Consent and the Engine
Warranty Assignment covers two GE CF6-80C2-A5F series engines bearing
Engine Manufacturer's serial numbers ___-___ and ___-___, respectively. In
this connection, I have, or an attorney under my supervision has, reviewed
such documents as I have deemed necessary for the purpose of this opinion,
including, but without limiting the generality of the foregoing, the
General Terms Agreement No. 6-9034, dated as of July 3, 1991 between the
Engine Manufacturer and Fed Ex (the "General Terms Agreement"), the Engine
Product Support Plan forming a part thereof (the "Engine Product Support
Plan"), the Participation Agreement, the Purchase Agreement Assignment, the
Lease, the Trust Indenture and the Trust Agreement.
In making such examinations, I have relied upon the accuracy of
original, certified, conformed, photocopied or telecopied copies of such
records, agreements, certificates and other documents as I have deemed
necessary or appropriate to enable me to render the opinions expressed
herein. In all such examinations, I have assumed the genuineness of
signatures on original documents and the conformity to such original
documents of all copies submitted to me as certified, conformed,
photocopied or telecopied copies, and as to certificates and telegraphic
and telephonic confirmations given by public officials, I have assumed the
same to have been properly given and to be accurate. As to various
questions of fact material to such opinions, I have relied, when such
relevant facts were not independently established by me, solely upon the
accuracy of the statements, representations and warranties made in the
Participation Agreement, the Purchase Agreement Assignment, the Lease, the
Trust Indenture and the Trust Agreement.
With your consent, and for the purposes of this opinion, I have
assumed (other than with respect to the Engine Manufacturer), the accuracy of
the following matters, but I have not made any independent investigation or
inquiry with respect thereto and I render no opinion on such matters:
(a) each of the Participation Agreement, the Purchase
Agreement Assignment, the Lease, the Trust Indenture, and the Trust
Agreement have been duly and validly authorized, executed and
delivered by all parties thereto and constitutes the legal, valid and
binding obligations of each of such parties in accordance with the
respective terms thereof; and
(b) the respective parties to the Participation Agreement,
the Purchase Agreement Assignment, the Lease, the Trust Indenture,
and the Trust Agreement have obtained, and there are in full force
and effect, any and all federal, state, local or foreign
governmental agencies and authorities in connection with the
transactions contemplated thereby, to the extent necessary for the
legality, validity and binding effect or enforceability of the
Consent and the Engine Warranty Assignment.
Based upon the foregoing, and subject to the specific assumptions,
qualifications and reliances herein set forth, and on the basis of my
consideration of such facts and law as I have deemed necessary for purposes of
this letter, it is my opinion that:
(1) The Engine Manufacturer has the full corporate power,
authority and the legal right to enter into and perform its
obligations under the General Terms Agreement, the Consent and the
Engine Warranty Assignment. The execution, delivery and
performance by the Engine Manufacturer of each of the General
Terms Agreement, the Consent and the Engine Warranty Assignment
was duly authorized by all necessary corporate action on the part
of the Engine Manufacturer.
(2) Each of the General Terms Agreement, the Consent and
Engine Warranty Assignment has been duly authorized, executed and
delivered by and constitutes a legal, valid and binding obligation of
the Engine Manufacturer, enforceable against the Engine Manufacturer
in accordance with the respective terms thereof, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general equity principles.
(3) The Engine Product Support Plan insofar as it relates to
the Engine Warranties (as such term is defined in the Engine Warranty
Assignment), constitutes a legal, valid and binding obligation of the
Engine Manufacturer, enforceable against the Engine Manufacturer in
accordance with the terms thereof, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general equity principles.
The foregoing opinions are limited to the laws of the State
of New York and the federal laws of the United States of America, but no
opinion is expressed as to matters governed by the Transportation Code, or
by any other law, statute, rule or regulation of the United States relating
to the acquisition, ownership, registration, use, operation, maintenance,
repair, replacement or sale of aircraft. Further, no opinion is expressed
as to title to any engines or other property.
This opinion is furnished by me at your request for your
sole benefit and no other person or entity shall be entitled to rely on
this opinion without our express written consent. My opinion is limited to
the matters stated herein and no opinion is implied or may be inferred
beyond the matters expressly stated herein.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(8)
[Letterhead of ▇▇▇▇▇▇▇▇ Chance]
[Delivery Date]
To The Opinion Addressees referred to in Schedule A hereof
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
We are special French counsel for Airbus Industrie G.I.E.
("Airbus") and AVSA S.A.R.L. ("AVSA") and you have asked for our opinion
in connection with certain transactions contemplated in the Participation
Agreement (Federal Express Corporation Trust No. N671FE), dated as of May
1, 1997 (the "Participation Agreement") among Federal Express Corporation,
as Lessee ("Federal Express"), PMCC Leasing Corporation, as Owner
Participant ("Owner Participant"), State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee ("Owner Trustee"), First
Security Bank, National Association, not in its individual capacity, except
as otherwise stated, but solely as Indenture Trustee ("Indenture Trustee"),
Pass Through Trustee and Subordination Agent, and relating to the Aircraft
to be operated by Federal Express.
This opinion is being delivered pursuant to Section 4.02(m)(x)
of the Participation Agreement.
Capitalized terms used in this opinion and not otherwise
defined shall have the meaning assigned thereto in the Participation
Agreement.
We have examined:
(i) a copy of an Airbus A300-600R Freighter Purchase Agreement
dated as of July 3, 1991 and made between AVSA and Federal
Express with an executed Consent and Guaranty of Airbus of
same date attached thereto, sent to us by facsimile by
AINA Holdings Inc. ("AINA") on April 27, 1994;
(ii) a copy sent to us by facsimile by ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ on
_________________ of an executed Purchase Agreement
Assignment dated as of May 1, 1997 (the "Purchase
Agreement Assignment") made between Federal Express and
the Owner Trustee;
(iii) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie Consent and
Agreement to the Purchase Agreement Assignment;
(iv) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated AVSA Consent and Agreement to
the Purchase Agreement Assignment;
(v) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Warranty ▇▇▇▇ of Sale, relating
to the Aircraft and transferring title therein from AVSA
to the Owner Trustee ("AVSA Warranty ▇▇▇▇ of Sale");
(vi) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie G.I.E.
Warranty, in favour of the Participants (the "Airbus
Warranty") warranting AVSA's Warranty ▇▇▇▇ of Sale;
(vii) a copy sent to us by facsimile by AVSA on _________________
of an undated FAA ▇▇▇▇ of Sale executed by AVSA in favour
of the Owner Trustee;
(viii) a copy sent to us by facsimile by AVSA on May 3, 1995 of an
executed power of attorney dated September 1, 1994 appointing
Messrs. ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, acting singly, as
attorneys-in-fact of ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
("Administrateur Gerant") of Airbus;
(ix) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing ▇.▇ ▇▇▇▇▇▇▇ as attorney-in-fact of ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant") of
Airbus;
(x) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing Xavier de Rouville as attorney-in-fact of ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant")
of Airbus;
(xi) a copy sent to us by courier by AVSA on September 15, 1995 of
an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇▇▇ Lascaux and ▇▇. ▇▇▇▇▇▇▇ O. de
Coninck, acting singly, as attorneys-in-fact of ▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of
AVSA; and
(xii) a copy sent to us by courier by AVSA on September 15, 1995
of an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇▇▇
Lascaux, Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇,
acting singly, as attorneys-in-fact of ▇▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of AVSA.
(the documents referred to in paragraphs (i) to (xii) being referred to herein
as the "Documents").
Based on the foregoing, and such other documents, records
and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, and assuming the Documents to have been duly
executed by the parties thereto (other than Airbus and AVSA), the
genuineness of all signatures and the completeness and conformity to the
originals of all documents supplied to us as copies or as facsimiles, we
are of the opinion that, subject to the qualifications set out below:
1. Airbus is a groupement d'interet economique duly organized and
existing under the laws of the French Republic, and has the
power and authority to carry on its business as now conducted.
The present members of Airbus are (i) Aerospatiale, Societe
Nationale Industrielle, (ii) Daimler-Benz Aerospace Airbus
GmbH, (iii) British Aerospace (Operations) Ltd. and (iv)
Construcciones Aeronauticas S.A., and each of such corporations
is, without the need to proceed against any collateral security
for the indebtedness of Airbus or to take any other legal
action or process (except for service on Airbus by huissier of
notice to perform and subsequent failure by Airbus to do so),
jointly and severally liable with the other members for the
debts of Airbus arising out of obligations contracted by Airbus
while such corporation is a member of Airbus.
2. AVSA is a societe a responsabilite limitee duly established
and existing under the laws of the French Republic and has
the power and authority to carry on its business as now
conducted.
3. Each of Airbus and AVSA has full power and authority to enter
into and to execute, deliver and perform its obligations under
those of the Documents to which it is a party; such obligations
are legal, valid and binding upon them respectively, are
enforceable in accordance with their respective terms and rank
pari passu with the other unsecured obligations of Airbus or
AVSA, as the case may be.
4. All actions, authorizations, approvals, consents, conditions
and things required at law to be taken, fulfilled and done
to authorize the execution, delivery and performance by
Airbus and AVSA of those of the Documents to which they
respectively are party have been taken, obtained, fulfilled
and done; and no consents under any exchange control, laws,
rules or regulations of the French Republic are necessary in
connection therewith.
5. Neither the execution and delivery and performance of the
Documents to which Airbus and AVSA respectively are a party,
nor the consummation of the transactions contemplated
thereby, contravenes or violates any law, governmental rule
or regulation applicable to or binding on Airbus or AVSA.
6. The choice of the laws of the State of New York to govern the
Documents (which are expressed to be so governed) is valid
under the laws of the French Republic, and a French court
would uphold such choice of law in any suit on the Documents
brought in a French court.
7. Under the laws of the French Republic, Airbus and AVSA are
subject to private commercial law and to suit, and neither
Airbus nor AVSA, nor their respective properties have any
immunity from the jurisdiction of any court or any legal
process (whether through service of notice, attachment prior to
notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise), except that:
(a) to the extent that Airbus or AVSA occupies or possesses
any property by virtue of any license or grant from the
French State, such property and the title of Airbus or
AVSA thereto may be immune from suit or execution on the
grounds of sovereignty, and
(b) suit and execution against Airbus and AVSA or their
respective property may be affected by action taken by
the French public authorities in the interests of
national defence or on the occurrence of exceptional
circumstances of paramount importance to the national
interest of France, as such concept is understood
under the Constitution, laws and regulations of
France.
8. No French value added tax is due upon the transfer of title of
the Aircraft from AVSA to State Street Bank and Trust
Company of Connecticut, National Association as Owner
Trustee.
9. In connection with the obligations of Airbus and AVSA under the
Documents, this opinion must be read subject to the following
qualifications and observations as to French law:
(a) the remedy of specific performance may not be available
in a French court;
(b) the enforcement against Airbus of any of the Documents to
which it is a party may be limited by applicable
bankruptcy, insolvency, arrangement, moratorium or
similar laws relating to or affecting the enforcement of
creditors' rights generally, as such laws are applied to
Airbus. The enforcement against AVSA of any of the
Documents to which it is a party may be limited by such
laws, as such laws are applied to AVSA. The enforcement
against any member of Airbus of any obligation of Airbus
contained in the Documents may be limited by such laws,
as such laws are applied to such member;
(c) in respect of payment obligations, a French court has
power under Article 1244-1 of the French Civil Code to
grant time to a debtor (not in excess of two years),
taking into account the position of the debtor and the
needs of the creditor;
(d) in order to ensure the validity as against third parties
of the assignment made in the Purchase Agreement
Assignment, it is necessary that notice of such
assignment be served on Airbus and AVSA by "huissier" in
accordance with the provisions of Article 1690 of the
French Civil Code;
(e) in the event of any proceedings being brought in a
French court in respect of a monetary obligation
expressed to be payable in a currency other than
French Francs, a French court would probably give
judgment expressed as an order to pay, not such
currency, but its French Franc equivalent at the time
of payment or enforcement of judgment. With respect
to a bankruptcy, insolvency, liquidation, moratorium,
reorganization, reconstruction or similar proceedings,
French law may require that all claims or debts be
converted into French Francs at an exchange rate
determined by the court at a date related thereto,
such as the date of commencement of a winding-up;
(f) a determination or certificate as to any matter provided
for in the Documents might be held by a French court not
to be final, conclusive or binding, if such determination
or certificate could be shown to have an unreasonable,
incorrect or arbitrary basis or not to have been given or
made in good faith;
(g) claims may become barred by effluxion of time or may be
or become subject to defence of set-off or
counterclaim;
(h) provisions in any Document providing that it or any
other Documents may be amended or varied or any
provision thereof waived only by an instrument in
writing may not be effective;
(i) a French court may stay proceedings if concurrent
proceedings are being brought elsewhere;
(j) we express no opinion as to whether any provision in the
Documents conferring a right of set-off or similar
right would be effective against a liquidator or a
creditor; and
(k) our opinion as to the enforceability of the Documents
relates only to their enforceability in France in
circumstances where the competent French court has and
accepts jurisdiction. The term "enforceability" refers
to the legal character of the obligations assumed by the
parties under the documents, i.e., that they are of a
character which French law enforces or recognizes. It
does not mean that the Documents will be enforced in all
circumstances or in foreign jurisdictions or by or
against third parties or that any particular remedy will
be available.
(l) Article 899 of the French Tax Code provides that
agreements evidencing an undertaking to pay a sum of
money are subject to stamp tax ("droit de timbre") of a
nominal amount if made in the French Republic, if made in
a foreign country, such agreements are subject to a stamp
tax of a nominal amount before certain use thereof can be
made in the French Republic (Article 897 of the French
Tax Code). However non-payment of such stamp tax does
not affect the legality, validity or enforceability of
the agreements.
In rendering the foregoing opinions, we have assumed that the
Documents (expressed to be governed by New York law) constitute the legal,
valid and binding obligations of the parties under New York law.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the
laws of the French Republic as of the date hereof. This opinion is for
your use and that of no one else, and is limited to (i) the matters
specifically mentioned herein, and (ii) the purpose set out above.
Very truly yours,
▇▇▇▇▇▇▇▇ Chance
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
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▇.▇. ▇▇▇▇▇▇ & Co.
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Liquidity Provider
Kredietbank N.V., New York Branch
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EXHIBIT A(9)
[Letterhead of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To the Parties Named on Schedule A attached hereto
Re: Federal Express Corporation Trust No. N671FE
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.02(d)(iii) of the Participation Agreement (Federal Express Corporation
Trust No. N671FE), dated as of May 1, 1997 (the "Participation Agreement")
among Federal Express Corporation, as Lessee (the "Lessee"), PMCC Leasing
Corporation, as Owner Participant (the "Owner Participant"), State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as otherwise stated, but solely as Owner
Trustee ("Owner Trustee"), First Security Bank, National Association, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee ("Indenture Trustee"), Pass Through Trustee and
Subordination Agent, with respect to that portion of Subtitle VII of Title
49 of the United States Code relative to the recordation of instruments and
the registration of aircraft thereunder.
The capitalized terms herein shall, unless otherwise
defined, have the same meanings given them in the Participation Agreement
or in Annex I attached hereto.
We have examined and filed on this date with the Federal
Aviation Administration (the "FAA") the following described instruments at
the respective times listed below:
(a) AC Form 8050-2 Aircraft ▇▇▇▇ of Sale dated
_____________ (the "FAA ▇▇▇▇ of Sale") from AVSA, as
seller, conveying title to the Airframe to the Owner
Trustee, which FAA ▇▇▇▇ of Sale was filed at ____
_.m., C._.T.;
(b) AC Form 8050-1 Aircraft Registration Application dated
_____________ (the "Aircraft Registration
Application") by the Owner Trustee, as applicant,
covering the Airframe, which Aircraft Registration
Application was filed at ____ _.m., C._.T.;
(c) Affidavit of the Owner Trustee dated _____________ (the
"Owner Trustee Affidavit") pursuant to Section
47.7(c)(2)(ii) of Part 47 of the Federal Aviation
Regulations together with Affidavit of the Owner
Participant dated _____________ (the "Owner
Participant Affidavit") attached thereto, which Owner
Trustee Affidavit with the Owner Participant Affidavit
attached was filed at ____ _.m., C._.T.;
(d) executed counterpart of Trust Agreement (Federal Express
Corporation Trust No. N671FE) dated as of May 1, 1997
(the "Trust Agreement") between the Owner Participant
and the Owner Trustee, which Trust Agreement was filed
at ____ _.m., C._.T.;
(e) executed counterpart of Trust Indenture and Security
Agreement (Federal Express Corporation Trust No.
N671FE) dated as of May 1, 1997 (the "Trust
Indenture") between the Owner Trustee and the
Indenture Trustee, with executed counterpart of
Indenture and Security Agreement Supplement No. 1
(Federal Express Corporation Trust No. N671FE) dated
_____________ (the "Trust Indenture Supplement") by
the Owner Trustee, covering the Aircraft, attached
thereto, which Trust Indenture with the Trust
Indenture Supplement attached was filed at ____ _.m.,
C._.T.; and,
(f) executed counterpart of Lease Agreement (Federal Express
Corporation Trust No. N671FE) dated as of May 1, 1997
(the "Lease") between the Owner Trustee, as lessor,
and the Lessee, with executed counterparts of the
following attached thereto: (i) Lease Supplement No.
1 (Federal Express Corporation Trust No. N671FE)
dated _____________ (the "Lease Supplement") between
the Owner Trustee, as lessor, and the Lessee, covering
the Aircraft; (ii) the Trust Indenture; and (iii) the
Trust Indenture Supplement, which Lease with the
foregoing attachments (collectively, the "Lease
Attachments") attached was filed at ____ _.m., C._.T.
The Confidential Omissions were intentionally omitted from
the FAA filing counterparts of the Lease and the Trust Indenture as
containing confidential financial information.
Based upon our examination of the above described
instruments and of such records of the FAA as we deemed necessary to render
this opinion, it is our opinion that:
1. the FAA ▇▇▇▇ of Sale, the Trust Indenture with the Trust
Indenture Supplement attached and the Lease with the
Lease Attachments attached are in due form for
recordation by and have been duly filed for
recordation with the FAA pursuant to and in accordance
with the provisions of 49 U.S.C. Section 44107;
2. the Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement are in due form for
filing and have been duly filed with the FAA pursuant
to and in accordance with the provisions of 49 U.S.C.
Section 44103(a) and Section 47.7(c) of the Federal
Aviation Regulations;
3. the Airframe is eligible for registration under 49 U.S.C.
Section 44102 in the name of the Owner Trustee and the
filing with the FAA of the FAA ▇▇▇▇ of Sale, the
Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement will cause the FAA to
register the Airframe, in due course, in the name of
the Owner Trustee and to issue to the Owner Trustee an
AC Form 8050-3 Certificate of Aircraft Registration
for the Airframe, and the Airframe will be duly
registered pursuant to and in accordance with the
provisions of 49 U.S.C. Section 44103(a);
4. the Owner Trustee has valid legal title to the Airframe
and the Aircraft is free and clear of all Liens,
except (i) the security interest created by the Trust
Indenture, as supplemented by the Trust Indenture
Supplement, and (ii) the rights of the parties under
the Lease, as supplemented by the Lease Supplement;
5. the rights of the Owner Trustee and the Lessee under the
Lease, as supplemented by the Lease Supplement, with
respect to the Aircraft, are perfected;
6. the Trust Indenture, as supplemented by the Trust
Indenture Supplement, constitutes a duly perfected
first priority security interest in the Aircraft and a
duly perfected first assignment of all the right,
title and interest of the Owner Trustee in, to and
under the Lease and the Lease Supplement (insofar as
such assignment affects an interest covered by the
recording system established by the FAA pursuant to 49
U.S.C. Section 44107), and no other registration of
the Airframe or filings other than filings with the
FAA (which have been duly effected) are necessary in
order to perfect in any applicable jurisdiction in the
United States (A) the Owner Trustee's title to the
Airframe or (B) such security interest and assignment
(insofar as such assignment affects an interest
covered by the recording system established by the FAA
pursuant to 49 U.S.C. Section 44107), it being
understood that no opinion is herein expressed as to
the validity, priority or enforceability of such
security interest and assignment under local law or as
to the recognition of the perfection of such security
interest and assignment as against third parties in
any legal proceeding outside the United States;
7. no authorization, approval, consent, license or order of,
or registration with, or the giving of notice to, the
FAA is required for the valid authorization, delivery
and performance of the Lease, as supplemented by the
Lease Supplement, the Trust Indenture, as supplemented
by the Trust Indenture Supplement, or the Trust
Agreement except for such filings as are referred to
above; and,
8. neither the execution and delivery by the Owner
Participant of the Participation Agreement or the
Trust Agreement, nor other consummation of the
transactions contemplated thereby by the Owner
Participant, requires the consent or approval of, or
the giving of notice to, or the registration of, or
the taking of any other action in respect of the FAA,
except (x) the registration of the Airframe, including
the submission of the Aircraft Registration
Application, the Owner Trustee Affidavit, the Owner
Participant Affidavit and the Trust Agreement to the
FAA and (y) the filings for recordation specified
elsewhere in this opinion.
No opinion is expressed as to the Airframe during any period
or periods of time during which it has not been subject to United States
registration.
No opinion is expressed as to laws other than Federal laws
of the United States. In rendering this opinion, we were subject to the
accuracy of the FAA, its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the search for
encumbrance cross-reference index cards for the Engines. Further, in
rendering this opinion we are assuming the validity and enforceability of
the above described instruments under local law. Since our examination was
limited to records maintained by the FAA, our opinion does not cover liens
which are perfected without the filing of notice thereof with the FAA, such
as federal tax liens, liens arising under Section 1368(a) of Title 29 of
the United States Code, possessory artisan's liens, or matters of which the
parties had actual notice. In rendering this opinion we are assuming that
there are no documents with respect to the Aircraft which have been filed
for recording under the recording system of the FAA but have not yet been
listed in the available records of such system as having been so filed.
In rendering this opinion we have relied upon the opinion of
the Assistant Chief Counsel of the Aeronautical Center dated _____________,
a copy of which is attached hereto.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
For the Firm
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus Industrie A300F4-605R aircraft bearing
manufacturer's serial number 778 and U.S. Registration No. N671FE (the
"Airframe") and two (2) General Electric CF6-80C2-A5F aircraft engines
bearing manufacturer's serial numbers ___-___ and ___-___ (the "Engines")
(the Airframe and the Engines are referred to collectively as the
"Aircraft").
Confidential Omissions
The Lease was filed with the FAA, with (i) the Basic Rent
(Schedule II), (ii) the Stipulated Loss Values (Schedule III), (iii) the
Termination Values (Schedule IV) and (iv) the Purchase Option Schedule
(Schedule V) omitted from the FAA filing counterpart thereof as containing
confidential financial information; and (v) the purchase price under Section
4.02(a)(F) set forth in Ancillary Agreement II, which was not attached to the
FAA filing counterpart of the Lease or otherwise filed with the FAA for
recordation.
SCHEDULE A
Lessee
Federal Express Corporation
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Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
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Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
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Owner Participant
PMCC Leasing Corporation
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Underwriters
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First Chicago Capital Markets, Inc.
Corporate Securities
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
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▇.▇. ▇▇▇▇▇▇ & Co.
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Liquidity Provider
Kredietbank N.V., New York Branch
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EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.e]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.b.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.d]
EXHIBIT E
[FORM OF PURCHASE AGREEMENT ASSIGNMENT, AIRBUS CONSENT AND
AVSA CONSENT]
[See Exhibit B to Lease Agreement under Exhibit 4.e]
EXHIBIT F
[FORM OF ENGINE WARRANTY ASSIGNMENT AND ENGINE CONSENT]
[See Exhibit C to Lease Agreement under Exhibit 4.e]
EXHIBIT G-1
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
BENEFICIAL INTEREST TRANSFER AGREEMENT (this "Document"),
dated as of _______ __, ____, between ______________, a ______________
corporation ("Transferor") and ______________, a ______________ corporation
("Transferee").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to effect (a) the
transfer by Transferor to Transferee of all of the rights, title and interest
of Transferor in and to its interest (the "Beneficial Interest") under the
Trust Agreement (Federal Express Corporation Trust No. N671FE), dated as of
May 1, 1997 (as heretofore amended, the "Trust Agreement"), between Transferor
and State Street Bank and Trust Company of Connecticut, National Association,
and the Lessor's Estate created thereunder, and all of Transferor's rights and
obligations under the Participation Agreement (Federal Express Corporation
Trust No. N671FE), dated as of May 1, 1997 (the "Participation Agreement"),
among Federal Express Corporation, as Lessee, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity,
except as otherwise stated therein, but solely as Owner Trustee, PMCC Leasing
Corporation, as Owner Participant, First Security Bank, National Association,
not in its individual capacity, except as otherwise stated therein, but solely
as Indenture Trustee, First Security Bank, National Association, not in its
individual capacity, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent, and under the other Operative Agreements and (b) the
acceptance by Transferee of such transfer and the assumption by Transferee of
such obligations of Transferor thereunder; and
WHEREAS, Section 7.03(d) of the Participation Agreement
permits such transfer and assumption upon satisfaction of certain conditions
heretofore or concurrently herewith being observed;
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements herein contained, the parties hereto agree
as follows:
1. Definitions. Capitalized terms used herein without
definition shall have the respective meanings ascribed thereto in the
Participation Agreement.
2. Transfer. Transferor does hereby sell, convey,
assign, transfer and set over, unto Transferee, as of the Effective Time (as
defined below), all of Transferor's present and future right, title and
interest in and to (a) all of the Beneficial Interest and (b) all of the Owner
Participant's rights and obligations under the Participation Agreement, the
Tax Indemnity Agreement, the Trust Agreement and the other Operative
Agreements and any proceeds therefrom, together with all other documents and
instruments evidencing any of such right, title and interest, except such
rights of Transferor as have arisen or accrued to Transferor prior to the
Effective Time (including without limitation, the right to receive any amounts
due or accrued to Transferor under the Operative Agreements as of a time prior
to the Effective Time and the right to receive any indemnity payment pursuant
to the Participation Agreement or the Tax Indemnity Agreement, with respect to
events occurring prior to such time); all of the foregoing that is being
transferred under this paragraph 2, the "Transferred Interest".
3. Assumption. Transferee hereby accepts the transfer
of the Transferred Interest and, for the benefit of Transferor and the other
parties to the Participation Agreement, assumes and undertakes and agrees to
perform and discharge all of the duties and obligations of Transferor with
respect to the Transferred Interest whenever and wherever accrued (other than
duties and obligations of Transferor required to be performed by it on or
prior to the Effective Time). Transferee hereby confirms that, from and after
the Effective Time, Transferee (a) shall be deemed, to the extent set forth in
Section 2 hereof, the "Owner Participant" party to the Participation
Agreement, the Tax Indemnity Agreement, the Trust Agreement and the other
Operative Agreements and (b) shall be bound by all of the terms of the
Operative Agreements to the extent the same relate to the Transferred
Interest.
4. Release of Transferor. At the Effective Time,
Transferor shall be relieved of all of its duties and obligations with respect
to the Transferred Interest under the Operative Agreements, provided, however,
that Transferor shall in no event be released from any such duty or
obligations arising or relating to any event occurring prior to the Effective
Time, or on account of any breach by Transferor of any of its representations,
warranties, covenants or obligations set forth in the Operative Agreements, or
for any fraudulent or willful misconduct engaged in by it prior to the
Effective Time, or from any obligation that relates to any indemnity claimed
by Transferor or any Lessor's Lien attributable to Transferor.
5. Fees and Expenses. The fees, expenses and charges
of the parties to the Participation Agreement incurred in connection with the
transfer effected hereby shall be for the account of [specify
Transferor/Transferee].
6. Payments. Transferor hereby covenants and agrees
to pay over to Transferee, if and when received following the Effective
Time, any amounts (including any sums payable as interest in respect
thereof) paid on account of the Transferred Interest to or for the benefit
of Transferor, and Transferee hereby covenants and agrees to pay over to
Transferor, if and when received following the Effective Time, any amounts
(including any sums payable as interest in respect thereof) paid to or for
the benefit of Transferee that are not attributable to the Transferred
Interest and to which Transferor is otherwise entitled.
7. Investment Purpose. Transferee hereby represents
and warrants that, as of the date hereof, it is acquiring the Transferred
Interest for its account with no present intention of distributing such
Transferred Interest or any part thereof in any manner which would violate
the Securities Act of 1933, as amended, but without prejudice, however, to
the right of Transferee at all times to sell or otherwise dispose of all or
any part of such Transferred Interest in compliance with Section 7.03(d) of
the Participation Agreement.
8. Representations and Warranties of Transferor.
Transferor represents and warrants to Transferee that as of the Effective
Time:
(a) Organization and Power. Transferor is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions").
(b) Authorization, Execution and Validity. This Agreement
has been duly authorized, executed and delivered by Transferor and
constitutes the legal, valid and binding obligation of Transferor,
enforceable against it in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity.
(c) Conflict. The execution, delivery and performance by
Transferor of this Agreement and compliance by Transferor with all
of the provisions hereof do not contravene any regulation or any
order of any governmental authority applicable to or binding on
Transferor, or contravene the provisions, or constitute a default
by Transferor under, its certificate of incorporation or by-laws
or any indenture, mortgage, contract or other agreement or
instrument to which Transferor is a party or by which Transferor
or any of its Properties is bound or affected.
(d) Consents. No consent, approval or authorization of, or
filing, registration or qualification with, or the giving of
notice or the taking of any other action with respect to, any
governmental authority on the part of Transferor is required in
connection with the execution, delivery and performance by
Transferor of this Agreement.
(e) Litigation. There are no proceedings pending or, to
the knowledge of Transferor, threatened against Transferor before
any governmental authority that would materially and adversely
affect the ability of Transferor to consummate the Transactions.
(f) No Liens. The Trust Estate is free of Lessor's Liens
attributable to Transferor.
(g) Compliance with Operative Agreements. Transferor has
fully performed all of its obligations under the Participation
Agreement and under each other Operative Agreement which
obligations by their terms are required to be satisfied or
performed prior to the Effective Time or prior to the consummation
of the Transactions.
(h) Default. As a result of the transfer effected hereby,
no Indenture Default attributable to the Owner Participant or the
Owner Trustee has occurred and is continuing.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft.
9. Representations and Warranties of Transferee.
Transferee represents and warrants to Transferor and to the other parties
to the Participation Agreement that as of the Effective Time:
(a) Transferee is a corporation duly organized, validly
existing and in good standing under the laws of the State of [ ],
has the full corporate power, authority and legal right to carry
on its business as now conducted, and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions");
(b) Transferee has full corporate power, authority and
legal right to execute, deliver and enter into this Agreement and
the other Operative Agreements and full corporate power and
authority to perform its obligations thereunder, and such
execution, delivery and performance do not and will not contravene
any applicable law or any order of any governmental authority
applicable to or binding on the Transferee, or contravene the
provisions of, or constitute a default under, or result in the
creation of any Lien upon the property of the Transferee under,
its articles of incorporation or by-laws or any material
indenture, mortgage, contract or other agreement or instrument to
which the Transferee is a party or by which it or any of its
property may be bound or affected;
(c) the execution, delivery and performance of this
Agreement by the Transferee (i) has been duly authorized by all
necessary corporate action and (ii) does not require any approval
of the shareholders of the Transferee or any approval or consent
of, or notice to, any trustee or holders of any indebtedness or
obligation of the Transferee, except for such approvals and
consents as have already been obtained;
(d) this Agreement has been duly executed and delivered by
the Transferee, and constitutes the legal, valid and binding
obligation of the Transferee, enforceable against the Transferee
in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity;
(e) there are no proceedings or actions pending or, to the
knowledge of the Transferee, threatened against the Transferee
before any governmental authority in which there is a reasonable
probability of an adverse determination that individually or in
the aggregate would materially and adversely impair the ability of
the Transferee to perform its obligations under this Agreement or
the Operative Agreements, or which involve the Transactions or
question the validity of any Operative Agreement to which the
Owner Participant is a party or any action taken or to be taken
pursuant thereto; and the Transferee is not in default with
respect to any order of any governmental authority which involves
the Transactions or the default under which would materially and
adversely affect the ability of the Transferee to perform its
obligations under this Agreement or any of the Operative
Agreements;
(f) no consent, approval, order or authorization of, giving
of notice to, or registration with, or taking of any other action
in respect of, any governmental authority is required under any
law for the execution and delivery by the Transferee of this
Agreement, or the carrying out by the Transferee of any of the
Transactions, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly
obtained, given or taken;
(g) the Lessor's Estate is free of any Lessor's Liens
attributable to the Transferee;
(h) the Transferee, upon execution of this Agreement, will
not be in default under any of the Operative Agreements;
(i) no part of the funds to be used by it to acquire the
interests acquired by the Owner Participant under the
Participation Agreement constitutes assets (within the meaning of
ERISA and any applicable rules and regulations) of any employee
benefit plan subject to Title I of ERISA or of any plan or
individual retirement account subject to Section 4975 of the Code;
(j) Transferee is a "U.S. Person" as defined in Section
7701(a)(30) of the Code and is not a tax resident of another
country and if it shall at any time cease to be such a "U.S.
Person" or shall become a tax resident of another country, it
shall furnish to the Agent and each Certificate Holder an
indemnity, in form and substance reasonably satisfactory to such
Certificate Holder, for any Taxes that may be imposed on such
Holder as a result of its failure to be such a "U.S. Person" or
as a result of its being a tax resident of another country, and it
shall be personally liable for any debt service to the extent that
the receipt of rentals is reduced by reason of any withholding
Taxes that result from such failure to be such a "U.S. Person" or
from being a tax resident of another country;
(k) [After giving effect to a voting trust or similar
agreement(*), Transferee is a Citizen of the United States]
[applicable if Aircraft is registered in the United States or is
proposed to be so registered]
------------
(*) Such voting trust or similar agreement must be reasonably satisfactory
to the Lessor and the Indenture Trustee.
(l) On and as of the Effective Date, the representations
and warranties of the Owner Participant in Article 7 of the
Participation Agreement are true and correct as to the Transferee;
and
(m) Transferee satisfies the conditions applicable to a
transferee of the Beneficial Interest set forth in Section 7.03(d)
of the Participation Agreement, including without limitation, the
condition set forth in the last sentence thereof [and to the
extent the same has been requested by the Lessee or the Indenture
Trustee, Transferee has heretofore provided to the Lessee and the
Indenture Trustee its most recent audited financial statements,
which show a consolidated tangible net worth or combined capital
and surplus of at least $75,000,000] [remove bracketed language if
an Owner Participant Guaranty is provided].
(n) the Transferee has, independently and without reliance
upon any other party (including without limitation the Transferor)
and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement, and the Transferee has established adequate
means of obtaining from Lessee on a continuing basis information
pertaining to, and is now and on a continuing basis will be
completely familiar with, the financial condition, operations,
properties and prospects of Lessee.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft, other than such laws, rules or regulations
relating to the citizenship requirements of it under applicable aviation
law.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 11.
Effectiveness. This Agreement shall be effective upon the mutual execution
and delivery of this Agreement (the "Effective Time").
12. Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by
both parties so long as each party shall sign at least one counterpart.
13. Beneficiaries. Each of the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Lessee, together with
their respective successors and permitted assigns, is and shall be deemed a
third party beneficiary of this Agreement entitled to enforce this
Agreement directly and in its own name and enforce any rights or claims of
the parties hereto.
14. Further Assurances. Each party agrees that from
time to time after the Effective Time, it shall execute and deliver or
cause to be executed and delivered such instruments, documents and papers,
and take all such further action as may be reasonably required in order to
consummate fully the purposes of this Agreement and to implement the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
[TRANSFEROR]
By:___________________________
Name:
Title:
[TRANSFEREE]
By:___________________________
Name:
Title:
EXHIBIT G-2
FORM OF OWNER PARTICIPANT GUARANTY
TRANSFEREE'S PARENT GUARANTY, dated as of ___________
__, ____, (this "Guaranty") by ____________________, a ___________
corporation (the "Guarantor"), to State Street Bank and Trust Company of
Connecticut, National Association, in its individual capacity and as Owner
Trustee, First Security Bank, National Association, as Indenture Trustee
and Pass Through Trustee, and Federal Express Corporation, as Lessee
(collectively, together with their successors and assigns and the holders
from time to time of the Certificates, the "Beneficiaries").
W I T N E S S E T H :
WHEREAS, ___________, a ____________ corporation (the
"Transferor"), is party to the Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997 (as amended,
modified or supplemented from time to time, the "Participation Agreement"),
among Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual, except as otherwise stated
therein, but solely as Owner Trustee, First Security Bank, National
Association, not in its individual, except as otherwise stated therein, but
solely as Indenture Trustee, First Security Bank, National Association, not
in its individual, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent; and
WHEREAS, the Transferor wishes to transfer, among
other things, all of the rights, title and interest of the Transferor in
and to the Beneficial Interest under the Trust Agreement and the Lessor's
Estate created thereunder, and all of the Transferor's rights and
obligations under the Participation Agreement, the Trust Agreement and the
other Operative Agreements to __________________, a _______________
[corporation] (together with its successors and assigns, the "Transferee"),
a subsidiary of the Guarantor, pursuant to the Beneficial Interest Transfer
Agreement, dated as of the date hereof (the "Transfer Agreement"), between
the Transferor and the Transferee; and
WHEREAS, the terms of the Participation Agreement
provide that the aforementioned transfer is conditioned upon the execution
and delivery of this Guaranty by the Guarantor;
NOW, THEREFORE, in order that the Transferor may make
the aforementioned transfer to the Transferee, the Guarantor hereby agrees
with and for the benefit of the Beneficiaries as follows:
1. Definitions. Capitalized terms used herein
without definition shall have the respective meanings assigned thereto in
the Participation Agreement or the Transfer Agreement.
2. Guaranty. The Guarantor hereby unconditionally
and irrevocably guarantees, as primary obligor and not merely surety, to
the Beneficiaries the prompt and complete payment by the Transferee when
due of all payment obligations of the Transferee under the Operative
Agreements without offset or deduction and the timely performance of all
other obligations of the Transferee thereunder (such payment and other
obligations, the "Obligations"), and the Guarantor further agrees to pay
any and all expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be paid or incurred by the Beneficiaries in
enforcing any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting
against, the Guarantor under this Guaranty.
The Guarantor will not exercise any rights that it may
now or hereafter acquire against Transferee that arise from the existence,
payment, performance or enforcement of the Guarantor's Obligations under
this Guaranty, the Transferred Interest or the Operative Agreements,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate
in any claim or remedy of any Beneficiary against Transferee or any
collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the
right to take or receive from Transferee, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security
on account of such claim, remedy or right, unless and until all of the
Obligations have been performed in full and all other amounts payable under
this Guaranty shall have been paid in full in cash. If any amount shall be
paid to the Guarantor in violation of the preceding sentence at any time
prior to the final payment in full in cash of the Obligations and all other
amounts payable under this Guaranty, such amount shall be held in trust for
the benefit of any Beneficiary and shall forthwith be paid to such
Beneficiary to be credited and applied to the Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Operative Agreements, or to be held as
collateral for any Obligations or other amounts payable under this Guaranty
thereafter arising.
3. No Subrogation. Notwithstanding anything to the
contrary in this Guaranty, the Guarantor hereby agrees not to assert any
rights which may have arisen in connection with this Guaranty to be
subrogated to any of the rights (whether contractual, under the Bankruptcy
Code, under common law or otherwise) of any Beneficiary against the
Transferee for the payment of the Obligations until all of the Obligations
shall have been satisfied by payment and performance in full.
4. Amendments with Respect to the Obligations;
Waiver of Rights. The Guarantor shall remain fully obligated hereunder
notwithstanding that, without any reservation of rights against the
Guarantor and without notice to or further assent by the Guarantor, any
demand for payment or performance of any of the Obligations made by any
Beneficiary may be rescinded by such party and any of the obligations
continued, and the Obligations, may, from time to time, in whole or part,
be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Beneficiary and any Operative Agreement may
be amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions thereof from time to time. When making any
demand hereunder against the Guarantor, a Beneficiary may, but shall be
under no obligation to, make a similar demand on the Transferee, and any
failure by a Beneficiary to make any such demand or to collect any payments
from the Transferee or any release of the Transferee shall not relieve the
Guarantor of its obligations or liabilities hereunder, and shall not impair
or affect the rights and remedies, express or implied, or as a matter of
law, of any Beneficiary against the Guarantor. For the purposes hereof,
"demand" shall include the commencement and continuance of any legal
proceedings. The Guarantor represents and warrants that it is the parent
of the Transferee, and agrees that its obligations hereunder shall continue
unimpaired, even if the Guarantor is no longer an Affiliate of the
Transferee.
5. Guaranty Absolute and Unconditional. The
Guarantor guarantees that the Obligations will be paid and performed
strictly in accordance with the terms of the Transfer Agreement and the
Operative Agreements, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any such terms or the
rights of any Beneficiary with respect thereto. The obligations of the
Guarantor under this Guaranty are independent of the Obligations or any
other obligations of any other party, and a separate action or actions may
be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether the Transferee or any other party is joined in any
such action or actions. The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by any Beneficiary upon this Guaranty or
acceptance of this Guaranty; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guaranty; and
all dealings between the Transferee or the Guarantor and any Beneficiary
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantor waives, to the fullest extent
permitted by applicable law, diligence, presentment, promptness, protest,
mitigation of damages by the Beneficiaries demand for payment and notice of
default or nonpayment to or upon the Transferee or the Guarantor with
respect to the Obligations. The Guarantor further waives any right to
revoke this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Obligations, whether existing now or in the
future. The Guarantor understands and agrees that, to the fullest extent
permitted by applicable law, this Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment and performance
(and not merely of collectibility) without regard to:
(a) the validity, regularity or enforceability of the
Transfer Agreement, any Operative Agreement, or any of the
Obligations at any time or from time to time held by any
Beneficiary;
(b) any defense, set-off, rebate, adjustment, withholding,
deduction or counterclaim (other than a defense of payment or
performance) that may at any time be available to or be asserted
by the Transferee against any Beneficiary or any agreement or
instrument relating thereto or;
(c) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations or any
other obligations of any other party under the Transfer Agreement,
the Operative Agreements, or any other amendment or waiver of or
any consent to departure from the Transfer Agreement or other
Operative Agreements;
(d) any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Obligations;
(e) any change, restructuring or termination of the
corporate structure or existence of the Guarantor or the
Transferee or any of the Affiliates of either;
(f) any defect in the title, condition, design, operation or
fitness of, or any interference with the operation, use or
possession of, the Aircraft;
(g) any failure to establish, perfect or preserve title to
or any security interest in or to the Aircraft or any other
collateral security for the Obligations; or
(h) any other circumstance whatsoever or any existence of or
reliance on any representation by any Beneficiary that might
otherwise constitute a defense available to, or a discharge of,
the Guarantor or any other guarantor or surety.
When pursuing its rights and remedies hereunder against the
Guarantor, any Beneficiary may, but shall be under no obligation to, pursue
such rights and remedies as it may have against the Transferee for the
Obligations, and any failure by any Beneficiary to pursue such other rights
or remedies or to collect any payments from the Transferee, or any release
of the Transferee, shall not, to the fullest extent permitted by applicable
law, relieve the Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as
a matter of law, of any Beneficiary against the Guarantor. This Guaranty
is a continuing guaranty and shall remain in full force and effect until
the earlier of (x) the date that all of the Obligations are satisfied by
payment and performance in full and (y) the date that all right, title and
interest of the Transferee shall have been transferred to a Person meeting
the requirements of Section 7.03(d) of the Participation Agreement in
accordance with said section; provided that this Guaranty shall remain in
full force and effect with respect to obligations relating to the period
prior to such transfer.
6. Reinstatement. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by any Beneficiary upon the insolvency, bankruptcy
dissolution, liquidation or reorganization of the Transferee or the
Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the
Transferee or the Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made and the Guarantor
agrees that it will indemnify any such Beneficiary on demand for all
reasonable costs and expenses (including, without limitation, reasonable
fees and expenses of counsel) by such Beneficiary in connection with such
rescission or restoration.
7. Payments. The Guarantor hereby guarantees that
payments hereunder shall be paid without set-off, counterclaim, deduction,
rebate, adjustment or withholding, and shall be made in U.S. Dollars in
immediately available funds.
8. Representations and Warranties. The Guarantor
hereby represents and warrants that:
(a) the Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and the Transferee is currently a subsidiary
of the Guarantor;
(b) the Guarantor has the power and authority and the legal
right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action
to authorize its execution, delivery and performance of this
Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally;
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or
contractual obligation of the Guarantor or any of its constitutive
documents;
(e) no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or governmental authority
and no consent of any other person is required in connection with
the execution, delivery, performance, validity or enforceability
of this Guaranty;
(f) the Guarantor is a [a bank, savings institution, finance
company, leasing company or trust company, national banking
association acting for its own account or in a fiduciary capacity
as trustee or agent under any pension, retirement, profit sharing
or similar trust or fund, insurance company, fraternal benefit
society or corporation acting for its own account having a
combined capital and surplus (or, if applicable, consolidated
tangible net worth or its equivalent)] of not less than
$75,000,000 [and has, if the same have been requested by the
Lessee or the Indenture Trustee, heretofore furnished to the
Lessee and the Indenture Trustee copies of its most recent audited
financial statements];
(g) there are no conditions precedent to the effectiveness
of this Guaranty that have not been satisfied or waived; and
(h) the Guarantor has, independently and without reliance
upon any Beneficiary and based on such documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty, and the Guarantor has
established adequate means of obtaining from Transferee on a
continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the financial
condition, operations, properties and prospects of Transferee.
9. Severability. Any provision of this Guaranty that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
10. Jurisdiction; Waiver of Jury Trial, Etc.
(a) The Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United
States of America sitting in New York, New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Guaranty, the Transfer Agreement or any Operative Agreement to which
it is or is to be a party, or for recognition or enforcement of any
judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted
by law, in such federal court. The Guarantor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Guaranty shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Guaranty,
the Transfer Agreement or any Operative Agreement to which it is or is to
be a party in the courts of any jurisdiction.
(b) The Guarantor irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Guaranty, the
Transfer Agreement or any Operative Agreement to which it is or is to be a
party in any New York State or federal court. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in
any such court.
11. Section Headings. The Section headings used in
this Guaranty are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the
interpretation hereof.
12. No Waiver; Cumulative Remedies. No Beneficiary
shall by any act (except by a written instrument pursuant to Section 13
hereof), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Beneficiary, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right power or
privilege. A waiver by a Beneficiary of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy
that such Beneficiary would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by
law.
13. Amendments and Waivers. None of the terms or
provisions of this Guaranty may be waived, amended or supplemented or
otherwise modified except by a written instrument executed by the Guarantor
and each Beneficiary.
14. Successors and Assigns. This Guaranty shall be
binding upon the successors and assigns of the Guarantor and shall inure to
the benefit of the Beneficiaries and their respective successors and
permitted assigns but Guarantor may not assign this Guaranty without prior
written consent of the Beneficiaries except to an assignee making, as of
the date of such assignment, (i) representations and warranties
substantially similar to those contained in Section 8 hereof and (ii) a
representation that it is a U.S. citizen, unless, in the case of the
preceding clause (ii) any of (a) the aircraft is not then registered in the
United States nor contemplated to be so registered or (b) a voting trust or
similar arrangement reasonably satisfactory to the Beneficiaries is in
place with respect to such registration or (c) it is not necessary for the
Guarantor to be a U.S. citizen in order for the aircraft to remain
registered in the United States.
15. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED
BY AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK.
16. Notices. All notices, requests and demands to or
upon the Guarantor or any Beneficiary to be effective shall be in writing
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made, when delivered by hand or by mail, upon receipt,
or, when delivered by facsimile transmission, upon being sent and
confirmed, addressed (a) in the case of the Guarantor, to the Guarantor at
its office at [_________________________________], and (b) in the case of
any Beneficiary, to such Beneficiary at the address provided for such
Beneficiary in or pursuant to the Participation Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to
be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
[NAME OF GUARANTOR]
_________________________________
Name:
Title:
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N672FE)
Dated as of May 1, 1997
among
FEDERAL EXPRESS CORPORATION,
Lessee
PMCC LEASING CORPORATION,
Owner Participant
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as Owner Trustee,
Owner Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Indenture Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Pass Through Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Subordination Agent
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 779, REGISTRATION NO. N672FE
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
DEFINITIONS............................................................. 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds........................................ 4
Section 2.02. Certificates............................................. 5
Section 2.03. Owner Participant's Instructions to Owner Trustee........ 5
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent, Stipulated
Loss Values and Termination Values....................... 5
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date......................... 6
Section 3.02. Commitments to Participate in Purchase Price............. 6
Section 3.03. Owner Participant's Instructions to Owner Trustee........ 9
Section 3.04. Transaction Costs........................................ 9
Section 3.05. Postponement of Delivery Date............................ 9
Section 3.06. Closing.................................................. 11
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).......... 11
Section 4.02. Conditions Precedent (Delivery Date)..................... 20
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.... 28
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 28
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 29
Section 6.02. Offering by Lessee....................................... 35
Section 6.03. Certain Covenants of Lessee.............................. 35
Section 6.04. Survival of Representations and Warranties............... 43
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate................................................... 43
Section 7.02. Citizenship.............................................. 44
Section 7.03. Representations, Warranties and Covenants of Owner
Participant.............................................. 45
Section 7.04. Representations, Covenants and Warranties of SSB and the
Owner Trustee............................................ 50
Section 7.05. Representations, Warranties and Covenants of the Indenture
Trustee.................................................. 52
Section 7.06. Indenture Trustee's Notice of Default.................... 54
Section 7.07. Releases from Indenture.................................. 54
Section 7.08. Covenant of Quiet Enjoyment.............................. 54
Section 7.09. Pass Through Trustee's Representations and Warranties.... 54
Section 7.10. Survival of Representations, Warranties and Covenants.... 55
Section 7.11. Lessee's Assumption of the Certificates.................. 55
Section 7.12. Indebtedness of Owner Trustee............................ 57
Section 7.13. Compliance with Trust Agreement, Etc..................... 58
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants................................................ 58
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 60
Section 8.02. After-Tax Basis.......................................... 65
Section 8.03. Time of Payment.......................................... 66
Section 8.04. Contests................................................. 66
Section 8.05. Refunds.................................................. 69
Section 8.06. Lessee's Reports......................................... 69
Section 8.07. Survival of Obligations.................................. 70
Section 8.08. Payment of Taxes......................................... 70
Section 8.09. Reimbursements by Indemnitees Generally.................. 70
Section 8.10. Special Indemnity........................................ 70
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 71
Section 9.02. After-Tax Basis.......................................... 74
Section 9.03. Subrogation.............................................. 75
Section 9.04. Notice and Payment....................................... 75
Section 9.05. Refunds.................................................. 75
Section 9.06. Defense of Claims........................................ 76
Section 9.07. Survival of Obligations.................................. 77
Section 9.08. Effect of Other Indemnities.............................. 77
Section 9.09. Interest................................................. 77
Section 9.10. Special Indemnity........................................ 78
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 78
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 80
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 82
Section 12.02. Interest of Holders of Certificates..................... 82
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 82
Section 13.02. Further Assurances...................................... 83
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment.......................................... 83
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 83
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 84
Section 15.02. Reoptimization.......................................... 88
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 89
Section 17.02. Collateral Account...................................... 89
Section 17.03. Counterparts............................................ 90
Section 17.04. No Oral Modifications................................... 90
Section 17.05. Captions................................................ 91
Section 17.06. Successors and Assigns.................................. 91
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and the
Pass Through Trustee.................................... 91
Section 17.08. Severability............................................ 92
Section 17.09. Public Release of Information........................... 92
Section 17.10. Certain Limitations on Reorganization................... 92
Section 17.11. GOVERNING LAW........................................... 93
Section 17.12. Section 1110 Compliance................................. 93
Section 17.13. Reliance of Liquidity Providers......................... 93
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 93
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Debt Portion
EXHIBIT A(1)(a)(i) Opinion of Lessee's Counsel
(Certificate Closing Date)
EXHIBIT A(1)(a)(ii) Opinion of Lessee's Counsel
(Delivery Date)
EXHIBIT A(1)(b)(i) Opinion of Lessee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(1)(b)(ii) Opinion of Lessee's Special Counsel
(Delivery Date)
EXHIBIT A(2)(a) Opinion of Owner Participant's and Owner Participant
Guarantor's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's and Owner Participant
Guarantor's Counsel
EXHIBIT A(3) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(4)(a)(i) Opinion of Owner Trustee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(4)(a)(ii) Opinion of Owner Trustee's Special Counsel
(Delivery Date)
EXHIBIT A(5) Opinion of Pass Through Trustee's and Subordination
Agent's Special Counsel
EXHIBIT A(6)(a) Opinion of Liquidity Provider's Counsel
EXHIBIT A(6)(b) Opinion of Liquidity Provider's Special Counsel
EXHIBIT A(7) Opinion of Engine Manufacturer's Counsel
EXHIBIT A(8) Opinion of Manufacturer's and AVSA's Counsel
EXHIBIT A(9) Opinion of Special Aviation Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Purchase Agreement Assignment, Consent and
Agreement, AVSA Consent and Agreement
EXHIBIT F Form of Engine Warranty Assignment and Engine Consent
EXHIBIT G-1 Form of Assignment and Assumption Agreement
EXHIBIT G-2 Form of Owner Participant Guaranty
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N672FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N672FE) dated as of May 1, 1997 (this "Agreement") among FEDERAL EXPRESS
CORPORATION, a Delaware corporation (herein, together with its successors and
permitted assigns, the "Lessee"), PMCC LEASING CORPORATION, a Delaware
corporation (herein, together with its successors and permitted assigns, the
"Owner Participant"), STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as owner
trustee under the Trust Agreement referred to below (in such capacity as
trustee, together with its successors and permitted assigns, the "Owner
Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as otherwise expressly
stated herein, but solely as indenture trustee under the Indenture referred to
below (in such capacity as trustee, together with its successors and permitted
assigns, the "Indenture Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity, except as
otherwise expressly stated herein, but solely as pass through trustee of three
separate Pass Through Trusts (in such capacity as trustee, together with its
successors and permitted assigns, the "Pass Through Trustee"), and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but solely as
subordination agent (in such capacity as trustee, together with its successors
and permitted assigns, the "Subordination Agent").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article 1 hereof.
WHEREAS, the Owner Participant has entered into the Trust Agreement
with the Owner Trustee in its individual capacity, substantially in the form
of Exhibit D hereto, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Lessor's Estate for the benefit of the
Owner Participant on the terms specified in the Trust Agreement, subject to
the Lien of the Indenture.
WHEREAS, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of Pass Through Certificates issued by
each Pass Through Trust, an allocable amount of the proceeds of which
offering will be used by the Pass Through Trustee to purchase for each such
Pass Through Trust the Certificates of the Series and Maturity applicable
thereto.
WHEREAS, on the Certificate Closing Date, the Owner Trustee and the
Indenture Trustee will enter into the Indenture for the benefit of the Pass
Through Trustee, pursuant to which the Owner Trustee is issuing the
Certificates to the Subordination Agent on behalf of the Pass Through Trustee
as evidence of the loans made by the Pass Through Trustee to the Owner
Trustee, the proceeds of which loans will be deposited by the Indenture
Trustee on behalf of the Owner Trustee in the Collateral Account.
WHEREAS, concurrently with the execution and delivery hereof, (i)
Kredietbank N.V., acting through its New York Branch will enter into two
revolving credit agreements (each, a "Liquidity Facility"), one for the
benefit of the holders of Pass Through Certificates of each of the Pass
Through Trusts for the Series A Certificates and the Series B Certificates,
with the Subordination Agent, as agent for the Pass Through Trustee on behalf
of each such Pass Through Trust; and (ii) the Pass Through Trustee, each
Liquidity Provider and the Subordination Agent will enter into the
Intercreditor Agreement.
WHEREAS, the Certificates will be held by the Subordination Agent
pursuant to the Intercreditor Agreement on behalf of the Pass Through Trustee
for each of the Pass Through Trusts.
WHEREAS, prior to the Delivery Date, the Certificates will be secured
by the Liquid Collateral.
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee will be authorized and directed by the Owner Participant:
(a) on the Delivery Date, to purchase the Aircraft from AVSA;
(b) on the Certificate Closing Date, to execute and deliver the
Lease substantially in the form of Exhibit B hereto, pursuant to which,
subject to the terms and conditions set forth in said Lease, the Owner
Trustee agrees to lease to the Lessee, and the Lessee agrees to lease from
the Owner Trustee, the Aircraft on the Delivery Date, such lease to be
effected by the execution and delivery on the Delivery Date of a Lease
Supplement, in the form of Exhibit A to the Lease, covering the Aircraft
and incorporating by reference all of the terms of the Lease;
(c) on the Certificate Closing Date, to execute and deliver the
Indenture, substantially in the form of Exhibit C hereto, for the benefit
of the Holders from time to time of the Certificates, pursuant to which the
Owner Trustee agrees, among other things, (A) to deposit, mortgage and
pledge with the Indenture Trustee, as part of the Trust Indenture Estate,
all of the Lessor's Estate but not Excepted Payments, (B) on the
Certificate Closing Date, to issue Certificates substantially in the form
set forth in Exhibit B to the Indenture, the proceeds of the sale of which
will be held by the Indenture Trustee on behalf of the Owner Trustee in
the Collateral Account until released in accordance with the terms
hereof and of the Indenture, and (C) on the Delivery Date, to execute
and deliver the Indenture and Security Agreement Supplement,
substantially in the form of Exhibit A to the Indenture, covering the
Aircraft and supplementing the Indenture;
(d) on the Certificate Closing Date, to execute and deliver the
Purchase Agreement Assignment, whereby the Lessee assigns to the Owner
Trustee the right to purchase the Aircraft from AVSA and certain of the
Lessee's rights and interests under the Purchase Agreement and the Consent
and Guaranty to the extent that the same relate to the Aircraft (except to
the extent reserved in said Purchase Agreement Assignment), which Purchase
Agreement Assignment is to include as an annex a Consent and Agreement
executed by the Manufacturer and the AVSA Consent and Agreement executed by
AVSA, said Purchase Agreement Assignment, Consent and Agreement and AVSA
Consent and Agreement to be substantially in the form of Exhibit E hereto;
and
(e) on the Certificate Closing Date, to execute and deliver the
Engine Warranty Assignment, whereby the Lessee assigns to the Owner Trustee
certain of the Lessee's rights and interests under the GTA to the extent
that the same relate to the Engines (except to the extent reserved in the
Engine Warranty Assignment), which Engine Warranty Assignment is to include
as an annex an Engine Consent executed by the Engine Manufacturer, said
Engine Warranty Assignment and Engine Consent to be substantially in the
form of Exhibit F hereto.
WHEREAS, on the Delivery Date pursuant to and subject to the terms
and conditions of this Agreement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇
of Sale and the Airbus Guaranty, the Owner Trustee will purchase, and
receive title to, the Aircraft from AVSA and lease the Aircraft to the
Lessee pursuant to the Lease.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth in Schedule II hereto are incorporated herein for all purposes of this
Agreement and shall be equally applicable to both the singular and the plural
forms of the terms so defined.
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement, shall
enter into the Series Supplements, and, subject to the terms and conditions
set forth therein, on the Pass Through Closing Date (i) the Lessee shall
direct the Underwriters to execute a wire transfer or intra-bank transfer to
the Pass Through Trustee in the amount of the total proceeds payable pursuant
to the Underwriting Agreement with respect to the Pass Through Certificates
and (ii) the Pass Through Trustee shall deliver the Pass Through Certificates
to the Underwriters upon receipt by the Pass Through Trustee of such proceeds.
(b) Subject to the satisfaction or waiver of the conditions set
forth herein, on the Certificate Closing Date, on behalf of each Pass Through
Trust, from an allocable amount of the proceeds of the sale of the related
Pass Through Certificates, the Pass Through Trustee shall purchase the
Certificates specified for such Pass Through Trust on Schedule I hereto. For
each Pass Through Trust, the Pass Through Trustee shall pay an amount equal to
the principal amount of Certificates of the Series and Maturity that relates
to such Pass Through Trust, which amounts in the aggregate shall equal the
aggregate principal amount of the Certificates as specified in Section 2.04 of
the Indenture. The aggregate amount payable by the Pass Through Trustee
pursuant to this Section 2.01(b) shall be payable by wire transfer or
intra-bank transfer to the Indenture Trustee on behalf of the Owner Trustee.
(c) On the Certificate Closing Date, the Indenture Trustee shall,
on behalf of the Owner Trustee, deposit, by wire transfer or intra-bank
transfer, the amounts received by it pursuant to Section 2.01(b) hereof in the
Collateral Account pursuant to the Indenture.
(d) On the Certificate Closing Date concurrently with the events
specified in Section 2.01(b) hereof, the parties hereto shall execute and
deliver, to the extent they are parties thereto, and consent to the execution
and delivery of (if they are not parties thereto), the Lease (other than the
Lease Supplement), the Indenture (other than the Indenture and Security
Agreement Supplement), and the other documents listed in Section 4.01(d)
hereof, and the Owner Trustee shall execute and deliver to the Indenture
Trustee for authentication, and the Indenture Trustee shall authenticate and
deliver to the Subordination Agent on behalf of the Pass Through Trustee for
each of the Pass Through Trusts, upon the request of the Owner Trustee, the
Certificates as provided in Section 2.02 hereof.
(e) The Closings shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 2.02. Certificates. Subject to the satisfaction or waiver
of the conditions set forth herein, on the Certificate Closing Date, the Owner
Participant will instruct the Owner Trustee to execute and deliver to the
Indenture Trustee, and the Indenture Trustee shall authenticate and deliver,
upon the request of the Owner Trustee, to the Subordination Agent on behalf of
the Pass Through Trustee for each of the Pass Through Trusts, the Certificates
specified for such Pass Through Trust on Schedule I attached hereto, which (i)
shall be issued in the principal amount and in the Series and Maturity set
forth for such Certificate in Schedule I hereto, (ii) shall bear interest at
the interest rate set forth for such Certificate in Schedule I hereto, (iii)
shall be issued in such form and on such terms as are specified in the
Indenture, (iv) shall be dated and authenticated on the Certificate Closing
Date and shall bear interest from the Certificate Closing Date and (v) shall
be registered in the name of the Subordination Agent on behalf of the Pass
Through Trustee for such Pass Through Trust.
Section 2.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the issuance of Certificates in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the action specified in Section 1.01 (other than clauses (a) and
(c)) of the Trust Agreement and confirmation that all conditions to closing
in respect of the Certificate Closing Date set forth in Section 4.01 (but
not Section 4.02) hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values and Termination Values. On or prior to the Delivery
Date, the percentages for Basic Rent referred to in Schedule II of the Lease
and the percentages for Stipulated Loss Value and Termination Value in
Schedule III and Schedule IV, respectively, of the Lease shall be adjusted
(upward or downward), subject to the procedures set forth in Section 3.04 of
the Lease and the minimum values established by Section 3.05 of the Lease and
the definitions of Stipulated Loss Value and Termination Value, to reflect
changes in the pricing assumptions with respect to (i) the Delivery Date being
other than August 19, 1997, (ii) a different rate of interest or amortization
schedule assumed by the Owner Participant in calculating such percentages from
that assumed by the Owner Participant in originally calculating such
percentages, (iii) Transaction Costs being other than as assumed in Section
10.01 hereof, (iv) any change in the length of the Basic Term (but in no event
shall the Term exceed 23.25 years) and (v) a Change in Tax Law which occurs
after the date of the execution of this Agreement but on or prior to the
Delivery Date. Notwithstanding anything herein to the contrary, the Lessee
shall have no obligation to enter into the transaction contemplated by this
Agreement other than with respect to Transaction Costs as described in Section
2.03 below and its obligation to purchase the Aircraft as provided in Section
3.05(a) hereof if, as a result of a Change in Tax Law after the date of
execution of this Agreement but on or prior to the Delivery Date, the Net
Present Value of Rents is increased by 100 basis points or more.
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date. The Lessee agrees
to give the Owner Participant, the Indenture Trustee, the Owner Trustee and
the Pass Through Trustee at least three (3) Business Days' written or
facsimile notice prior to the Delivery Date (which notice shall be effective
only if received not later than 10:00 a.m. (New York City time) on the date
that is at least three (3) Business Days prior to the Delivery Date), which
Delivery Notice shall specify the amount of the Purchase Price, the amount of
the Owner Participant's Commitment, the Debt Portion, the Delivery Date for
the Aircraft, the serial number of the Airframe and each Engine, and the
Aeronautics Authority registration number for the Aircraft.
Section 3.02. Commitments to Participate in Purchase Price. (a)
Participation in Purchase Price. Subject to the terms and conditions of this
Agreement, on the Delivery Date, (i) subject to the proviso to this Section
3.02(a), the Indenture Trustee agrees to release the Debt Portion or such
lesser amount as may then be held in the Collateral Account together with the
Lessee Shortfall (as defined in clause (iii) below), if any, to the Owner
Trustee for application to the Purchase Price as provided below, (ii) the
Owner Participant agrees to participate in the Lessor's payment of the
Purchase Price by making an investment in the beneficial ownership of the
Lessor's Estate in an amount equal to the amount set forth in Ancillary
Agreement II, (iii) subject to the proviso to this Section 3.02(a), the Lessee
agrees to pay to the Indenture Trustee the excess, if any, of (I) the Debt
Portion over (II) such amount as may then be held in the Collateral Account
(the "Lessee Shortfall") as provided in Section 17.02(a) hereof, and (iv)
pursuant to the Purchase Agreement as assigned pursuant to the Purchase
Agreement Assignment, AVSA shall sell the Aircraft to the Owner Trustee and
the Owner Trustee shall immediately thereafter lease the Aircraft to the
Lessee pursuant to the Lease. In consideration for the assignment to the
Owner Trustee by the Lessee under the Purchase Agreement Assignment of the
Lessee's right to purchase the Aircraft for the remaining balance due under
the Purchase Agreement and for the transfer of title to the Aircraft from
AVSA to the Owner Trustee, the following cash payments will be made by wire
transfer of immediately available funds on the Delivery Date: (A) by the
Owner Trustee to AVSA, an amount equal to the remaining balance due to AVSA
under the Purchase Agreement for the Aircraft, as evidenced by the Invoice,
or if the proviso to this Section 3.02(a) is applicable, such amount as it
shall have received from the Owner Participant not to exceed such remaining
balance due to AVSA, (B) by the Owner Trustee to the Lessee, an amount
equal to the Purchase Price (or if the proviso to this Section 3.02(a) is
applicable, the amount received from the Owner Participant) minus the cash
payment to AVSA pursuant to clause (A) above and (C) by the Indenture
Trustee, on behalf of the Owner Trustee, to the Lessee the excess of any
amounts as may then be held in the Collateral Account over the Debt
Portion; provided, however, that if (1) the Delivery Date has been
postponed, (2) the investments contemplated by Section 2.14(b) of the
Indenture have been made, (3) such investments do not mature on the
rescheduled Delivery Date and (4) the Lessee elects not to break such
investments, then the Indenture Trustee shall not release amounts in the
Collateral Account to the Owner Trustee and the Lessee shall instead pay to
AVSA any balance of the Purchase Price remaining after payment to AVSA by
the Owner Trustee as contemplated by clause (A) above and the Indenture
Trustee shall pay to the Lessee at the end of the applicable investment
period referred to in Section 2.14(b) of the Indenture all amounts then
held in the Collateral Account.
(b) Payment of Commitment. The Owner Participant agrees with the
Lessee and only with the Lessee on behalf of the Owner Trustee, subject to the
terms and conditions of this Agreement, to make the amount of its Commitment
available for and on account of the Owner Trustee on the Delivery Date
specified in the Delivery Notice pursuant to Section 3.03 hereof by wire
transfer, initiated by 10:00 a.m. (New York City time on such day) of such
amount in immediately available funds, to the Owner Trustee for deposit in its
account at State Street Bank and Trust Company, Boston, Massachusetts, ABA
No. ▇▇▇-▇▇▇-▇▇▇, A/C No. ▇▇▇▇-▇▇▇-▇, Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, Re: FedEx
Equity Payments Account. The amount of the Owner Participant's Commitment
shall be held for the account of the Owner Participant by the Owner Trustee
until released by the Owner Participant or its special counsel at closing or
until returned to the Owner Participant in accordance with Section 3.02(c)
hereof.
(c) No Obligation to Increase Commitments; Delayed Delivery. (i) If
the Indenture Trustee shall default in its obligation to make the amount of
its Debt Portion available pursuant hereto, the Owner Participant shall have
no obligation to make any portion of such Debt Portion available or to
increase the amount of its Commitment, and the obligations of the Owner
Participant shall remain subject to the terms and conditions of this
Agreement, until no later than September 30, 1997.
(ii) Subject to the provisions of Section 3.05 hereof, if the closing
of the transactions contemplated by the Operative Agreements shall not have
been consummated by 2:00 p.m. (New York City time), or such earlier time as
directed by the Lessee, on the Scheduled Delivery Date, the Owner Trustee
shall, if instructed in writing by the Lessee, at the risk and expense of the
Lessee, use its reasonable best efforts to cause the Owner Participant's
Commitment to be invested and reinvested to the extent practicable at the
direction received by it from the Lessee (with a copy to the Owner
Participant), at the risk of the Lessee, in Permitted Investments consisting
of either commercial paper or time deposits; provided, however, that in the
absence of instructions by 2:00 p.m. (New York City time) the Owner Trustee
shall use its reasonable best efforts to cause such amount or the proceeds
thereof to be invested and reinvested to the extent practicable in overnight
Eurodollar time deposits. Earnings on any such investments shall be applied
to the Lessee's payment obligations, if any, to such Owner Participant
pursuant to the next succeeding paragraph, and the balance, if any, of such
earnings remaining after such application shall be paid in accordance with the
Lessee's written instructions.
If for any reason (i) the Operative Agreements shall not be executed
and delivered by the respective parties thereto and/or the delayed Delivery
Date shall not occur (whether by reason of a failure to meet a condition
precedent thereto set forth in Article 4 hereof or otherwise) on or before the
third Business Day after the Scheduled Delivery Date (or earlier if requested
by the Owner Participant) or, if earlier, the Cut-Off Date, or (ii) the Lessee
has notified the Owner Trustee (with a copy to the Owner Participant) prior to
2:00 p.m. (New York City time) on any date after the Scheduled Delivery Date
that it does not intend to go forward to close the transactions contemplated
hereby for such Delivery Date, the Owner Participant may cancel any funding
arrangements made to fund its Commitment on the Scheduled Delivery Date but
the Owner Participant's Commitment hereunder with respect to the Aircraft
shall not be terminated thereby until September 30, 1997, whereupon the
Owner Participant's Commitment hereunder shall terminate. On such third
Business Day (or such earlier date) or September 30, 1997, as the case may
be, or the earliest practicable Business Day thereafter, the Owner Trustee
shall return the amounts held by it hereunder to the Owner Participant,
provided that the Owner Trustee shall have had a reasonable time to
liquidate any Permitted Investments it has been authorized to invest in
pursuant to the preceding paragraph and to obtain the proceeds therefrom in
funds of the type originally received, and the Lessee shall pay interest on
such funds to the Owner Participant at the Debt Rate, such interest to be
payable for the period from and including such Scheduled Delivery Date to
but excluding the date such funds are returned to the Owner Participant in
accordance with the terms hereof; provided that if any such funds are
returned to the Owner Participant after 2:00 p.m. (New York City time) on
any such date, such funds shall be deemed for purposes of this paragraph to
have been returned on the next succeeding Business Day.
The Lessee shall reimburse the Owner Trustee on demand for any loss
incurred by the Owner Trustee as a result of the investment of funds by the
Owner Trustee in accordance with the terms of this Section 3.02(c). Further,
the Lessee shall indemnify the Owner Trustee and hold it harmless from and
against any cost or expense the Owner Trustee may incur as a result of any
investment of funds or transfer of funds referred to herein in accordance with
the terms hereof. The Owner Trustee shall not be liable for failure to invest
such funds except as otherwise provided herein or for any losses incurred on
such investments except for any losses arising out of its own gross negligence
or willful misconduct.
Section 3.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the release of its Commitment in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the actions specified in Sections 1.01(a) and (c) of the Trust
Agreement and confirmation that all conditions to closing set forth in
Section 4.02 hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 3.04. Transaction Costs. If the transactions contemplated
by this Article 3 are consummated, as and when any portion of Transaction
Costs becomes due and payable, the Owner Participant shall, as soon as
practicable upon receipt of bills or invoices for the amounts payable make
such payments or, if the Lessee shall have already made such payment, shall
reimburse the Lessee therefor or shall, as soon as practicable, furnish the
Owner Trustee funds sufficient to, and the Owner Trustee shall, as soon as
practicable, make payment of such portion to the Person or Persons entitled to
payment upon presentation to the Owner Trustee of bills or invoices for the
amount of such payment. If such transactions are not consummated, the Lessee
shall pay or cause to be paid all the Transaction Costs; provided, however
that if the failure of such transactions to be consummated is due to (i) a
failure of the Owner Participant to obtain investment approval to proceed with
the transaction contemplated hereby, (ii) a failure to negotiate the Operative
Agreements in good faith by the Owner Participant or (iii) a wrongful act by
the Owner Participant, the Lessee shall have no obligation to pay those costs
and expenses incurred directly by the Owner Participant in connection with the
transactions contemplated by this Agreement described in Sections 10.01(a)(i)
and (xi) hereof, but the Lessee shall be obligated to pay all other
Transaction Costs.
Section 3.05. Postponement of Delivery Date. (a) If the Owner
Participant shall for any reason fail or refuse to make the full amount of its
Commitment available on the Scheduled Delivery Date in accordance with the
terms of Section 3.02 hereof, the Owner Trustee will promptly give each party
confirmed facsimile notice thereof and the Lessee shall postpone the Delivery
Date for a period of not more than five (5) Business Days, but in no event
later than September 30, 1997. If the Owner Participant shall for any reason
fail or refuse to make the full amount of its Commitment available in
accordance with the terms of Section 3.02 hereof on such postponed Delivery
Date, (i) if the Owner Participant fails to make available its Commitment in
breach of its obligations under this Agreement, the Lessee shall cause the
Owner Participant to assign to another equity investor identified by the
Lessee its interest in the Lessor's Estate pursuant to Section 7.03(d) hereof
and (ii) if no such equity investor is identified, or if such equity investor
fails to close such transactions, or if the Owner Participant fails to make
available its Commitment for any other reason than as specified in clause (i)
above, the Owner Participant's interest in the Lessor's Estate shall be
automatically conveyed to the Lessee without any further action, and the
parties hereto shall take such actions as may be advisable or necessary to
give effect to such conveyance. From and after any such conveyance, the
Owner Participant's obligations hereunder and under the other Operative
Agreements shall cease. The exception to the Lessee's indemnity set forth
in clause (viii) of Section 9.01(b) hereof shall not be applicable to any
such conveyance other than a conveyance pursuant to clause (i) above. For
the avoidance of doubt, it is understood and agreed that if for any reason
other than the failure of the Manufacturer or AVSA to deliver the Aircraft,
the Lessee does not enter into the Lease Supplement with the Owner Trustee
on or prior to the Cut-Off Date, the Indenture Trustee and the Pass Through
Trustee agree that the Lessee shall purchase the Aircraft and assume all of
the obligations of the Owner Trustee under the Certificates upon
satisfaction of the requirements set forth in Section 4.02 hereof, as the
same may be modified by the provisions of Section 7.11 hereof and as
otherwise necessary to reflect a full recourse secured aircraft financing
of the Lessee. If the Lessee has identified an equity investor under the
circumstances set forth in clause (i) above, the Owner Participant agrees
to assign its interest in the Lessor's Estate as provided in said clause
(i). In case of any such conveyance pursuant to said clause (i) (but
subject to the satisfaction of the conditions precedent specified herein),
the Indenture Trustee shall release the Debt Portion or such lesser amount
as may then be held in the Collateral Account for application to the
payments contemplated in the last sentence of Section 3.02(a) hereof,
subject to the proviso to Section 3.02(a) hereof.
(b) Release of Obligations. If the Delivery Date has not occurred
on or prior to the Cut-Off Date (i) in the case of the Indenture Trustee and
the Pass Through Trustee, as a result of a failure of the Manufacturer or AVSA
to deliver the Aircraft, or (ii) in the case of the Owner Participant, for any
reason, then, in such event, the Owner Trustee shall not purchase the Aircraft
from AVSA, and the parties to the Operative Agreements shall have no further
obligations or liabilities under any of said Operative Agreements with respect
to the Aircraft, including the obligation of the Owner Participant to
participate in the payment of the Purchase Price, and such documents shall
terminate and have no further force or effect with respect to the Aircraft;
provided, however, that the Lessee shall provide, no later than the Cut-Off
Date, notice of prepayment to the Indenture Trustee and the Certificates shall
be prepaid on the 15th day following the Cut-Off Date as provided in Section
6.02(a)(vi) of the Indenture and Section 17.02(c) hereof and provided further,
that (i) the Lessee's obligation to pay any Transaction Costs as provided in
Section 3.04 hereof (to the extent such section is applicable) and to
indemnify such parties to the extent provided in such documents, shall not be
diminished or modified in any respect and (ii) the obligations of the Owner
Trustee, the Indenture Trustee and the Lessee to return funds and pay
interest, costs, expenses and other amounts thereon or in respect thereof as
provided in Section 3.02 hereof shall continue.
(c) Optional Postponement. Without limiting the provisions of
Section 3.02(c) hereof, the Scheduled Delivery Date may be postponed from time
to time (but in no event shall the Delivery Date be later than the Cut-Off
Date) for any reason, other than pursuant to Section 3.05(a) hereof, if the
Lessee gives the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Pass Through Trustee confirmed facsimile notice (or telephone notice
followed by written confirmation) of such postponement and notice of the date
to which the Delivery Date has been postponed, such notice of postponement to
be received by each party no later than 11:00 a.m. (New York City time) on the
Business Day preceding the Scheduled Delivery Date.
Section 3.06. Closing. The closing with respect to the purchase and
lease of the Aircraft on the Delivery Date shall take place at the offices of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date). The
obligations of the Owner Trustee, the Owner Participant, the Indenture
Trustee, the Subordination Agent and the Pass Through Trustee on behalf of
each Pass Through Trust to participate in the transactions contemplated hereby
on the Certificate Closing Date are subject to the fulfillment to the
satisfaction of such party (or waiver by such party), prior to or on the
Certificate Closing Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligations of any party):
(a) Certificates. (i) On the Certificate Closing Date, there shall
have been duly issued and delivered by the Owner Trustee to the
Subordination Agent on behalf of the Pass Through Trustee for each Pass
Through Trust, against payment therefor, a Certificate, substantially in
the form set forth in Exhibit B to the Indenture, duly authenticated, dated
the Certificate Closing Date and registered in the name of the
Subordination Agent, in the principal amounts, Series and Maturity, bearing
the interest rate and the other economic terms specified in the Series
Supplements and otherwise as provided in Section 2.04 of the Indenture.
The Pass Through Certificates shall be registered under the Securities Act,
any applicable state securities laws shall have been complied with, and the
Pass Through Agreement shall have been qualified under the Trust Indenture
Act, and (ii) on the Certificate Closing Date, the "Certificates" (as
defined in each of the Related Indentures) have been duly issued and
delivered by the "Owner Trustee" (as defined in each of the Related
Indentures) to the Subordination Agent on behalf of the Pass Through
Trustee for each Pass Through Trust.
(b) Legal Investment. On the Certificate Closing Date, no fact or
condition shall exist under applicable laws or regulations, or
interpretations of any such laws or regulations by applicable regulatory
authorities, which, in the opinion of the Owner Participant or its special
counsel, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee or their special counsel, would make it illegal for the Owner
Participant, the Lessee, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee, and no change in
circumstances shall have occurred which would otherwise make it illegal or
otherwise in contravention of guidance issued by regulatory authorities for
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through
Trustee, the Subordination Agent or the Indenture Trustee, to participate
in the transactions to be consummated on the Certificate Closing Date; and
no action or proceeding shall have been instituted nor shall governmental
action before any court, governmental authority or agency be threatened
which in the opinion of counsel for the Owner Participant, the Indenture
Trustee, the Subordination Agent or the Pass Through Trustee is not
frivolous, nor shall any order have been issued or proposed to be issued by
any court, or governmental authority or agency, as of the Certificate
Closing Date, to set aside, restrain, enjoin or prevent the consummation of
any of the transactions contemplated by this Agreement or by any of the
other Operative Agreements.
(c) Underwriters. The Underwriters shall have transferred the funds
specified in Section 2.01(a) hereof and all conditions thereunder shall
have been satisfied or waived.
(d) Documents. This Agreement and the following documents shall
have been duly authorized, executed and delivered by the respective
party or parties thereto, shall each be satisfactory in form and
substance to the Lessee, the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would
be a default thereunder, and copies executed or certified as requested
by the Lessee, the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee, the Subordination Agent or the Owner Participant, as
the case may be, of such documents shall have been delivered to the
Owner Participant, the Lessee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent and the Owner Trustee (provided that
the sole chattel-paper original of each of the Lease and each Ancillary
Agreement amendatory of the Lease, shall be delivered to the Indenture
Trustee):
(i) the Lease;
(ii) the Indenture;
(iii) in the case of the Owner Participant only, the Tax Indemnity
Agreement;
(iv) the Purchase Agreement and the Consent and Guaranty;
(v) the Purchase Agreement Assignment and the French Pledge
Agreement with respect thereto;
(vi) the GTA;
(vii) the Trust Agreement;
(viii) the Ancillary Agreement I;
(ix) the Ancillary Agreement II;
(x) the Owner Participant Guaranty;
(xi) the Intercreditor Agreement; and
(xii) the Liquidity Facility for each of the Pass Through Trusts for
the Series A Certificates and the Series B Certificates.
(e) Approvals. All approvals and consents of any trustees or
holders of any indebtedness or obligations of the Lessee, which in the
opinion of the Owner Participant, the Pass Through Trustee or the Indenture
Trustee are required in connection with any transaction contemplated by
this Agreement, shall have been duly obtained.
(f) Financing Statements. Uniform Commercial Code ("UCC") financing
statements covering all the security interests (and other interests)
intended to be created by or pursuant to the Granting Clause of the
Indenture shall have been executed and delivered by the Owner Trustee, as
debtor, and by the Indenture Trustee, as secured party, for and on behalf
of the Holders, and such financing statements shall have been duly filed or
duly submitted for filing in the State of Connecticut, and all other
actions shall have been taken which, in the opinion of the Owner
Participant, the Pass Through Trustee and the Underwriters, are necessary
to perfect and protect such security interests and other interests.
(g) Corporate Documents. Except when such Person is the delivering
party, the Owner Participant, the Owner Trustee, the Pass Through Trustee,
the Lessee and the Indenture Trustee (acting directly or by authorization
to its counsel) shall have received the following, in each case in form and
substance satisfactory to it:
(i) a copy of the certificate of incorporation and by-laws of the
Lessee, certified by the Secretary or an Assistant Secretary of the
Lessee as of the Certificate Closing Date, and a copy of the minutes
of the regular meeting of the board of directors of the Lessee,
certified as such as of the Certificate Closing Date by such
Secretary or Assistant Secretary, duly authorizing the lease by the
Lessee of the Aircraft under the Lease and the execution, delivery
and performance by the Lessee of this Agreement, the Lease, the Tax
Indemnity Agreement, the Pass Through Agreement, the Series
Supplements, the other Operative Agreements to which the Lessee is
or is to be a party and each other document to be executed and
delivered by the Lessee in connection with the transactions
contemplated hereby;
(ii) a copy of the articles of incorporation and bylaws of the
Owner Participant and the Owner Participant Guarantor, certified by
the Secretary or an Assistant Secretary of the Owner Participant or
the Owner Participant Guarantor as of the Certificate Closing Date,
and a copy of the resolutions of the board of directors of the Owner
Participant, certified as such as of the Certificate Closing Date by
such Secretary or an Assistant Secretary, authorizing the execution
and delivery by the Owner Participant of this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative
Agreements to which the Owner Participant is or is to be a party and
each other document to be executed and delivered by the Owner
Participant in connection with the transactions contemplated hereby,
and a copy of the resolutions of the board of directors of the Owner
Participant Guarantor, certified as such as of the Certificate
Closing Date by the Secretary or an Assistant Secretary, authorizing
the execution and delivery by the Owner Participant Guarantor of the
Owner Participant Guaranty and the other Operative Agreements to
which such Owner Participant Guarantor is or is to be a party and
each other document to be executed and delivered by the Owner
Participant Guarantor in connection with the transactions
contemplated hereby;
(iii) a copy of the articles of association and by-laws and other
instruments of the Owner Trustee, certified by the Secretary or an
Assistant Secretary of the Owner Trustee as of the Certificate
Closing Date (or other like instruments satisfactory to the Lessee
and the Owner Participant) and evidence authorizing the execution,
delivery and performance by the Owner Trustee in its individual
capacity or as Owner Trustee, as the case may be, of this Agreement,
the Trust Agreement and each of the other Operative Agreements to
which it is or is to be a party, whether in its individual capacity
or as Owner Trustee, and each other document to be executed and
delivered by the Owner Trustee in connection with the transactions
contemplated hereby;
(iv) a copy of the articles of association and by-laws and
other instruments of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture Trustee as of
the Certificate Closing Date (or other like instruments
satisfactory to the Lessee and the Owner Participant) and evidence
authorizing the execution, delivery and performance by the
Indenture Trustee of each of this Agreement, the Indenture and
each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by
the Indenture Trustee in connection with the transactions
contemplated hereby;
(v) a copy of the articles of association and by-laws and other
instruments of the Pass Through Trustee, certified by the Secretary
or an Assistant Secretary of the Pass Through Trustee as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Pass Through Trustee of
this Agreement, the Pass Through Agreement, the Series Supplements
and each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by the
Pass Through Trustee in connection with the transactions contemplated
hereby;
(vi) a copy of the articles of association and by-laws and other
instruments of the Subordination Agent, certified by the Secretary or
an Assistant Secretary of the Subordination Agent as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Subordination Agent of
this Agreement, the Intercreditor Agreement and each of the other
Operative Agreements to which it is or is to be a party, and each
other document to be executed and delivered by the Subordination
Agent in connection with the transactions contemplated hereby; and
(vii) such other documents, evidences, materials, and information
with respect to the Lessee, the Owner Trustee, the Indenture Trustee,
the Pass Through Trustee and the Owner Participant as the Indenture
Trustee, the Pass Through Trustee or the Owner Participant may
reasonably request in order to establish the consummation of the
transactions contemplated by this Agreement.
(h) Officer's Certificate of Lessee. On the Certificate Closing
Date, the following statements shall be true, and the Owner Participant,
the Owner Trustee, the Pass Through Trustee and the Indenture Trustee shall
have received a certificate signed by the Vice President and Treasurer or
any other duly authorized officer of the Lessee, dated the Certificate
Closing Date, stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(i) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Certificate Closing Date, the following statements shall
be true, and the Lessee, the Pass Through Trustee, the Owner Trustee and
the Indenture Trustee shall have received a certificate from (i) the Owner
Participant, signed by a duly authorized officer of the Owner Participant
dated the Certificate Closing Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto, are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(j) Other Officer's Certificates. On the Certificate Closing Date,
the following statements shall be true, and the Lessee, the Pass Through
Trustee, the Owner Trustee, the Subordination Agent and the Indenture
Trustee shall have received a certificate from each of SSB and the Owner
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Indenture Trustee), FSB and the Indenture
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Owner Trustee), FSB and the Pass Through
Trustee (in the case of the Lessee, the Indenture Trustee, the
Subordination Agent and the Owner Trustee) and FSB and the Subordination
Agent (in the case of the Lessee, the Pass Through Trustee, the Indenture
Trustee and the Owner Trustee), signed by a duly authorized officer of SSB
and FSB, respectively, dated the Certificate Closing Date, stating with
respect to SSB and the Owner Trustee, with respect to FSB and the Indenture
Trustee, with respect to FSB and the Pass Through Trustee or with respect
to FSB and the Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Certificate
Closing Date as though made on and as of such date (except to the
extent that such representations and warranties relate solely to
an earlier date, in which case such certificate shall state that
such representations and warranties were true and correct on and
as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens.
(k) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Certificate Closing Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(a) hereto and the General Counsel's Office of the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(b) hereto, each addressed to the Underwriters, the Owner
Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee, each Liquidity Provider and the Lessee;
(iii) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Indenture
Trustee, in the form of Exhibit A(3) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(iv) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(i) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(v) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(vi) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Pass Through
Trustee and the Subordination Agent, in the form of Exhibit A(5)
hereto and addressed to the Underwriters, the Owner Participant, the
Indenture Trustee, the Owner Trustee, the Pass Through Trustee, each
Liquidity Provider and the Lessee; and
(vii) ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal Department of
Kredietbank N.V., in the form of Exhibit A(6)(a) hereto, and Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel for the Liquidity Providers,
in the form of Exhibit A(6)(b) hereto, each addressed to the Pass
Through Trustee, the Subordination Agent, each Liquidity Provider and
the Lessee.
(l) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(m) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(n) Other Agreements. The Lessee and the Pass Through Trustee
shall have entered into the Pass Through Agreement and the Series
Supplements, all conditions to the effectiveness of each thereof shall
have been satisfied or waived, and the Pass Through Certificates shall
have been issued pursuant to the Series Supplements. The Lessee and the
Underwriters shall have entered into the Underwriting Agreement, all
conditions to the effectiveness thereof shall have been satisfied or
waived, and the Pass Through Certificates shall have been delivered
pursuant to the Underwriting Agreement. All conditions to the
effectiveness of each Liquidity Facility shall have been satisfied or
waived.
(o) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements
referred to in subparagraph (f) of this Section 4.01, or in connection with
the issuance of the Certificates shall have been duly paid or caused to be
paid in full; and (B) all sales or use taxes and duties related to the
consummation of the transactions contemplated by the Operative Agreements
on the Certificate Closing Date which are then due and payable shall have
been duly paid in full.
(p) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Certificate Closing Date in connection with the transactions contemplated
by this Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Certificate Closing Date in
connection with the transactions contemplated by this Agreement shall have
been issued, and all such permits shall be in full force and effect on the
Certificate Closing Date.
(q) Section 131.3 of the New York State Banking Law Filing. SSB
shall have delivered evidence of its filing made with the New York
Superintendent of Banking pursuant to Section 131.3 of the New York State
Banking Law.
Section 4.02. Conditions Precedent (Delivery Date). Subject to the
last paragraph of this Section 4.02, the obligations of the Owner Trustee, the
Owner Participant, the Indenture Trustee, the Subordination Agent and the Pass
Through Trustee on behalf of each Pass Through Trust to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of each party (or waiver by such party), prior
to or on the Delivery Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligation of any party):
(a) Notice, Etc. Each party hereto shall have received a Delivery
Notice pursuant to Section 3.01 hereof at least three (3) Business Days
prior to the Delivery Date.
(b) Legal Investment. No change shall have occurred after the
Certificate Closing Date and on or prior to the Delivery Date in applicable
laws or regulations, or interpretations of any such laws or regulations by
applicable regulatory authorities, which, in the opinion of the Owner
Participant or its special counsel, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee or their special counsel,
would make it illegal for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, and no change in circumstances shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance issued
by regulatory authorities for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, to participate in the transactions to be consummated on the
Delivery Date; and no action or proceeding shall have been instituted nor
shall governmental action before any court, governmental authority or
agency be threatened which in the opinion of counsel for the Owner
Participant, the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee is not frivolous, nor shall any order have been issued or
proposed to be issued by any court, or governmental authority or agency, as
of the Delivery Date, to set aside, restrain, enjoin or prevent the
consummation of any of the transactions contemplated by this Agreement or
by any of the other Operative Agreements.
(c) Documents. The documents referred to in Section 4.01(d) hereof
shall each be in full force and effect and the following documents shall
have been duly authorized, executed and delivered by the respective party
or parties thereto, shall each be satisfactory in form and substance to the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee,
the Subordination Agent and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would be
a default thereunder, and copies executed or certified as requested by the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee
or the Owner Participant, as the case may be, of such documents shall have
been delivered to the Owner Participant, the Lessee, the Indenture Trustee,
the Pass Through Trustee and the Owner Trustee (provided that the sole
chattel-paper original of the Lease Supplement shall be delivered to the
Indenture Trustee):
(i) the Lease Supplement covering the Aircraft, dated the Delivery
Date;
(ii) an Indenture and Security Agreement Supplement covering the
Aircraft, dated the Delivery Date;
(iii) the Invoice;
(iv) AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale and the
Airbus Guaranty;
(v) the Consent and Agreement and the AVSA Consent and Agreement;
and
(vi) the Engine Warranty Assignment and the Engine Consent.
(d) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Delivery Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(iii) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(ii) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(iv) counsel for the Engine Manufacturer, in the form of Exhibit
A(7) hereto and addressed to the Underwriters, the Owner Participant,
the Indenture Trustee, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Lessee;
(v) ▇▇▇▇▇▇▇▇ Chance, special counsel for AVSA and the
Manufacturer, in the form of Exhibit A(8) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(vi) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special aviation counsel, in
the form of Exhibit A(9) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee; and
(vii) in the case of the Owner Participant only, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, tax counsel to the Owner Participant,
addressed to the Owner Participant, with respect to certain tax
matters.
(e) Title, Airworthiness and Registration. On the Delivery Date,
the following statements shall be true, and the Owner Participant, the
Indenture Trustee, the Pass Through Trustee and the Owner Trustee shall
have received evidence from the Lessee reasonably satisfactory to the
Owner Participant, the Indenture Trustee, the Pass Through Trustee and
the Owner Trustee to the effect that:
(i) the Owner Trustee has good and marketable title (subject to
filing and recording of AVSA's FAA ▇▇▇▇ of Sale with the Aeronautics
Authority) to the Aircraft, free and clear of Liens, except the
rights of the Owner Trustee and the Lessee under the Lease and the
Lease Supplement covering the Aircraft, the rights of the Indenture
Trustee under the Indenture and the beneficial interest of the Owner
Participant created by the Trust Agreement and the interest of the
Certificate Holders created by the Indenture and the Indenture and
Security Agreement Supplement covering the Aircraft, which evidence
shall include AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale
and the Airbus Guaranty;
(ii) the Aircraft has been duly certificated by the Aeronautics
Authority as to type and airworthiness in accordance with the terms
of the Operative Agreements;
(iii) AVSA's FAA ▇▇▇▇ of Sale, the Lease and Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft and the Trust Agreement
shall have been duly filed for recordation (or shall be in the
process of being so duly filed for recordation) with the Aeronautics
Authority pursuant to the Transportation Code; and
(iv) application to the Aeronautics Authority for registration of
the Aircraft in the name of the Owner Trustee shall have been duly
made and the Lessee shall have temporary or permanent authority to
operate the Aircraft.
(f) Financing Statements. A UCC notice filing describing the Lease
as a lease shall have been executed and delivered by the Owner Trustee, as
lessor, and the Lessee, as lessee (which filing shall name the Indenture
Trustee as assignee of the Owner Trustee) and shall have been duly filed in
the State of Tennessee.
(g) Payments. The Owner Participant shall have made available its
Commitment to the Owner Trustee and the other payments contemplated by
Section 3.02 hereof shall have been made.
(h) Report of Aircraft Expert. The Owner Participant shall have
received a report prepared by BK Associates, Inc. addressed to the Owner
Participant (with an abbreviated report to the Lessee) which report shall
be in form and substance satisfactory to the Owner Participant to the
effect, among other things, that on the Delivery Date:
(i) (A) the estimated fair market value of the Aircraft net of
any cost to the Owner Participant or the Owner Trustee of return at
the end of the Basic Term and any Fixed Renewal Term (determined
without including in such value any increase or decrease for
inflation or deflation during the Term) is equal to or greater than
20% of the Purchase Price for the Aircraft and (B) at least 20% of
the useful economic life of the Aircraft will be remaining at the end
of the Basic Term and any Fixed Renewal Term;
(ii) the estimated useful life of the Aircraft is at least 133% of
the Basic Term and any Fixed Renewal Term;
(iii) the Purchase Price of the Aircraft is no greater than the
fair market value of the Aircraft on the Delivery Date;
(iv) on the Delivery Date, the Aircraft will not require any
modifications, improvements or additions in order to be rendered
complete for its intended purpose by the Lessee;
(v) the amount payable by the Lessee upon the exercise of its
purchase option pursuant to Section 4.02(a)(F) of the Lease equals or
exceeds the currently estimated Fair Market Value of the Aircraft on
such date (taking into account inflation or deflation to such date);
and
(vi) the Aircraft is not limited use property.
(i) Insurance. Each of the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee and the Owner Participant shall have received
such evidence as it deems appropriate, including, without limitation, an
independent insurance broker's report, together with certificates of
insurance from such broker, in form and substance satisfactory to the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee and the
Owner Participant to establish that the insurance required by Article 13 of
the Lease is in effect.
(j) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements and
the documents and instruments referred to in subparagraphs (e) and (f) of
this Section 4.02, or in connection with the purchase of the Aircraft by
the Owner Trustee and the making by the Owner Participant of its equity
investment shall have been duly paid or caused to be paid in full; and (B)
all sales or use taxes and duties related to the consummation of the
transactions contemplated by the Operative Agreements on the Delivery Date
which are then due and payable shall have been duly paid in full.
(k) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(l) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease (assuming, for this purpose, that the provisions
of Article 16 of the Lease had become operative on the Certificate Closing
Date and not the Delivery Date) or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(m) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Delivery Date in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Delivery Date in connection with
the transactions contemplated by this Agreement shall have been issued, and
all such permits shall be in full force and effect on the Delivery Date.
(n) Officer's Certificate of Lessee. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received a certificate signed by the Vice President and Treasurer or any
other duly authorized officer of the Lessee, dated the Delivery Date,
stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(o) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Delivery Date, the following statements shall be true,
and the Lessee, the Pass Through Trustee, the Owner Trustee and the
Indenture Trustee shall have received a certificate from the Owner
Participant, signed by a duly authorized officer of (i) the Owner
Participant dated the Delivery Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement (excluding the Tax Indemnity Agreement) to which
it is a party and in any certificate delivered pursuant hereto or
thereto, are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(p) Other Officer's Certificates. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Lessee,
the Pass Through Trustee, the Owner Trustee, the Subordination Agent and
the Indenture Trustee shall have received a certificate from each of SSB
and the Owner Trustee (in the case of the Lessee, the Pass Through Trustee,
the Owner Participant, the Subordination Agent and the Indenture Trustee),
FSB and the Indenture Trustee (in the case of the Lessee, the Pass Through
Trustee, the Owner Participant, the Subordination Agent and the Owner
Trustee), FSB and the Pass Through Trustee (in the case of the Lessee, the
Indenture Trustee, the Owner Participant, the Subordination Agent and the
Owner Trustee) and FSB and the Subordination Agent (in the case of the
Lessee, the Indenture Trustee, the Owner Participant, the Pass Through
Trustee and the Owner Trustee) signed by a duly authorized officer of SSB
and FSB, respectively, dated the Delivery Date, stating with respect to SSB
and the Owner Trustee, with respect to FSB and the Indenture Trustee, with
respect to FSB and the Pass Through Trustee or with respect to FSB and the
Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Delivery Date
as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens affecting the Trust
Indenture Estate or the Lessor's Estate or any part thereof.
(q) Release of Debt Portion. The Indenture Trustee shall have
released the Debt Portion from (or such lesser amount as may then be held
in) the Collateral Account or if the proviso to Section 3.02(a) is
applicable, then the Lessee shall have made the payment required to be made
to AVSA pursuant to such proviso.
Notwithstanding anything else to the contrary in this Section 4.02, it shall
not be a condition precedent to the obligations of the Indenture Trustee, the
Pass Through Trustee or the Subordination Agent that the conditions in Section
4.02(n) and (o) be satisfied if the Lessee certifies that the failure to
fulfill such condition precedent is not reasonably likely to materially
adversely affect the holders of Pass Through Certificates and, in the event of
such failure, there has been delivered to the Indenture Trustee written
confirmation from both ▇▇▇▇▇'▇ and S&P of the rating on any class of Pass
Through Certificates.
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.
Promptly upon the registration of the Aircraft and the filing and, where
appropriate, recordation pursuant to the Transportation Code, of AVSA's FAA
▇▇▇▇ of Sale, the Trust Agreement, the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security Agreement
Supplement covering the Aircraft attached as exhibits) and the Indenture (with
the Indenture and Security Agreement Supplement covering the Aircraft attached
as an exhibit), the Lessee shall cause Special Aviation Counsel to deliver to
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through Trustee
and the Indenture Trustee an opinion as to (i) the due registration of the
Aircraft in the name of the Owner Trustee, (ii) the due recording pursuant to
the Transportation Code of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Lease (with such Lease Supplement, the Indenture and such Indenture and
Security Agreement Supplement attached as exhibits), and the Indenture (with
such Indenture and Security Agreement Supplement attached as an exhibit), and
(iii), subject to customary qualifications, the lack of any intervening
documents with respect to the Aircraft.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby on
the Certificate Closing Date is subject to the conditions that, prior to or on
the Certificate Closing Date, the Lessee shall have received the certificates
and other documents which are referred to in, or the opinions to be addressed
to it under, as the case may be, paragraphs (d), (g)(ii)-(v), (i), (j),
(k)(ii)-(vi) of Section 4.01 hereof and the Underwriters shall have made
available the amounts required to be paid by them pursuant to Section 2.01
hereof, and the Lessee's obligation to participate in the transactions
contemplated hereby on the Delivery Date, is subject to the conditions that,
on or prior to the Delivery Date, the Lessee shall have received the documents
which are referred to in, or the opinions to be addressed to it under, as the
case may be, paragraphs (c) and (d)(ii)-(v) of Section 4.02 hereof and the
Indenture Trustee shall have released the Debt Portion from (or such lesser
amount as may then be held in) the Collateral Account.
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties. The Lessee
represents and warrants to the Owner Participant, the Owner Trustee (in its
individual capacity and as Owner Trustee), the Pass Through Trustee (in its
individual capacity and as Pass Through Trustee), each Liquidity Provider and
the Indenture Trustee (in its individual capacity and as Indenture Trustee)
that, on the date hereof and as of the Certificate Closing Date and the
Delivery Date (unless any such representation is specifically made as of one
date):
(a) the Lessee is a corporation duly organized and validly existing
and is in good standing under the laws of the State of Delaware with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) in Memphis, Tennessee,
and is duly qualified to do business as a foreign corporation and is in
good standing in all jurisdictions in which it has intrastate routes, or
offices or major overhaul facilities or in which other activities of the
Lessee require such qualification;
(b) the Lessee has full power, authority and legal right to conduct
its business and operations as currently conducted and to own or hold under
lease its Properties and to enter into and perform its obligations under
this Agreement, the other Operative Agreements to which it is a party, the
Pass Through Agreement and the Series Supplements (the "Lessee Documents");
(c) the Lessee is an "air carrier" within the meaning of the
Transportation Code and a holder of a certificate under Sections 41102(a)
and 41103 of the Transportation Code and a "citizen of the United States"
within the meaning of Section 40102(a)(15) of the Transportation Code
holding an "air carrier operating certificate" issued under Chapter 447 of
the Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and each such certificate is
in full force and effect;
(d) the Lessee possesses all necessary certificates, franchises,
licenses, permits, rights and concessions and consents (collectively
"permits") which are material to the operation of the routes flown by it
and the conduct of its business and operations as currently conducted and
each such permit is in full force and effect;
(e) the execution, delivery and performance of the Lessee Documents
by the Lessee have been duly authorized by all necessary corporate action
on the part of the Lessee and do not require any stockholder approval, or
approval or consent of any trustee or holder of any indebtedness or
obligations of the Lessee, and each such document has been duly executed
and delivered or, in the case of the Operative Agreements identified in
Section 4.02(c) hereof, will on the Delivery Date be executed and delivered
by the Lessee and constitutes (or will constitute, as the case may be) the
legal, valid and binding obligations of the Lessee enforceable against it
in accordance with the terms thereof except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws or equitable principles of general application to or affecting
the enforcement of creditors' rights generally (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(f) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body (other than the SEC) is required
for the execution, delivery or performance by the Lessee of the Lessee
Documents or for the use and maintenance of the Aircraft except for such
registrations, applications and recordings referred to in the opinions of
Special Aviation Counsel delivered or to be delivered pursuant to Sections
4.02(d)(iii) and 4.03 hereof and except for the filings referred to in
Sections 4.01(f) and 4.02(f) hereof, all of which shall have been duly
obtained or made and shall be in full force and effect on and as of the
Certificate Closing Date or the Delivery Date, or as contemplated by said
Sections;
(g) neither the execution, delivery or performance by the Lessee of
the Lessee Documents nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent (other than the Consent and Agreement, the AVSA
Consent and Agreement, the Engine Consent and the Consent and Guaranty) or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of the Lessee or any order,
writ, injunction or decree of any court or governmental authority against
the Lessee or by which it or any of its Properties is bound or any
indenture, mortgage or contract or other agreement or instrument to which
the Lessee is a party or by which it or any of its Properties is bound, or
constitutes or will constitute a default thereunder or results or will
result in the imposition of any Lien upon any of its Properties;
(h) there are no pending or, to the knowledge of the Lessee,
threatened actions, suits, investigations or proceedings (whether or not
purportedly on behalf of the Lessee) against or affecting the Lessee or any
of its Property before or by any court or administrative agency which (A)
involve the Aircraft, (B) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the fiscal year
ended May 31, 1996 (as updated by Note 7 to the financial statements
included in the Lessee's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (ii) in the Lessee's Current Reports on Form 8-K dated June 7, 1996,
August 16, 1996 and March 4, 1997, as to which no representation is made
concerning the Lessee's liability (if any) or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, if adversely determined, would materially and
adversely affect the consolidated financial condition, business or
operations of the Lessee, or (C) if adversely determined would adversely
affect the ability of the Lessee to perform its obligations under the
Lessee Documents;
(i) the Lessee has filed or caused to be filed all tax returns which
are required to be filed and has paid or caused to be paid all taxes shown
to be due and payable pursuant to such returns or pursuant to any
assessment received by the Lessee (other than assessments the payment of
which is being contested in good faith by the Lessee by appropriate
proceedings that do not involve any material danger of sale, forfeiture or
loss of the Aircraft or any part thereof), and the Lessee has no knowledge
of any related actual or proposed deficiency or additional assessment which
either in any case or in the aggregate would materially adversely affect
the Lessee's consolidated financial condition (other than, in any such case,
assessments, the payment of which is being contested in good faith by the
Lessee, as to which no representation is made concerning the Lessee's
liability (if any) or the effect of any adverse determination upon the
Lessee's consolidated financial condition);
(j) except for (A) the registration in the Owner Trustee's name of
the Aircraft pursuant to the Transportation Code to be accomplished by
filing with the FAA, of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Affidavits and the Application, (B) the filing with and, where appropriate,
recordation by the FAA pursuant to the Transportation Code of the
Indenture, the Indenture and Security Agreement Supplement covering the
Aircraft, the Lease and the Lease Supplement covering the Aircraft, (C) the
filing of the financing statements referred to in Sections 4.01(f) and
4.02(f) hereof and (D)(x) on the Certificate Closing Date, the taking of
possession by the Indenture Trustee of the Liquid Collateral and
maintaining possession by the Indenture Trustee thereof as contemplated in
Section 2.14(a) of the Indenture and (y) on the Delivery Date, the taking
of possession by the Indenture Trustee of the original counterpart of the
Lease and the Lease Supplement covering the Aircraft, no further action,
including any filing or recording of any document, is necessary or
advisable in order (i) to establish the Owner Trustee's title to and
interest in the Aircraft and the Lessor's Estate as against the Lessee and
any third parties, or (ii) to perfect the first security interest in and
mortgage Lien on the Trust Indenture Estate in favor of the Indenture
Trustee;
(k) on the Delivery Date, the Owner Trustee has received good and
marketable title to the Aircraft, free and clear of all Liens, except the
rights of the Lessee under the Lease and the Lease Supplement, the rights
of the Indenture Trustee under the Indenture and the beneficial interest of
the Owner Participant created by the Trust Agreement;
(l) the Lessee has heretofore delivered to the Owner Participant
true and correct copies of the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 and its Quarterly Reports on Form 10-Q for
the fiscal quarters ended August 31, 1996, November 30, 1996 and February
28, 1997, and of the audited consolidated balance sheet of the Lessee for
the fiscal year ended May 31, 1996 and the unaudited consolidated balance
sheets of the Lessee as of August 31, 1996, November 30, 1996 and February
28, 1997, and the related consolidated statements of income, changes in
common stockholders' investment and cash flows for the fiscal year and
interim reporting periods ended on such dates, accompanied (except in the
case of such interim reporting periods) by a report thereon containing
opinions without qualification, except as therein noted, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent public accountants; said financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly the financial position of the
Lessee as of such dates and the results of its operations and cash flows
for such periods and such Annual Report, Quarterly Reports and financial
statements did not, as of their respective dates of filing with the SEC,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein not misleading;
(m) with respect to ERISA:
(i) none of the Pension Plans (as defined at the end of this
Section 6.01(m)) nor their related trusts have been terminated in a
distress termination pursuant to Section 4041(c) of ERISA or by the
Pension Benefit Guaranty Corporation (together with any successor
agency or instrumentality thereto, the "PBGC") pursuant to Section
4042 of ERISA, nor have any actions been taken to so terminate any
Pension Plan or related trust and neither the Lessee nor any ERISA
Affiliate (as defined at the end of this Section 6.01(m)) has
incurred or could reasonably be expected to incur any material
liability with respect to a Pension Plan under Section 4062, 4063,
4064 or 4069 of ERISA;
(ii) there have been no "reportable events" (as such term is
defined in Section 4043(b) of ERISA) with respect to any Pension Plan
which have resulted or could reasonably be expected to result in any
material liability of the Lessee or any ERISA Affiliate;
(iii) no "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code) exists with
respect to any Pension Plan, whether or not waived, nor has any
request for a waiver under Section 412(d) of the Code been, or is
reasonably likely to be, filed with respect to any of the Pension
Plans;
(iv) neither the Lessee nor any ERISA Affiliate has failed to make
any contribution or payment to any Pension Plan which has resulted or
could reasonably be expected to result in the imposition of a Lien
under Section 302(f) of ERISA or Section 412(n) of the Code;
(v) all Pension Plans are in compliance in all material respects
with all applicable provisions of ERISA and the Code;
(vi) neither the Lessee nor any ERISA Affiliate has incurred or is
reasonably likely to incur any material withdrawal liability pursuant
to Section 4201 or 4204 of ERISA or any material liability under
Section 515 of ERISA;
(vii) to the best of the Lessee's knowledge, neither the Lessee
nor any ERISA Affiliate has engaged in a "prohibited transaction"
(within the meaning of Section 4975 of the Code or Section 406 of
ERISA) which could reasonably be expected to subject the Lessee to
the tax or penalties on prohibited transactions imposed by Section
4975 of the Code or Section 502 of ERISA; and
(viii) assuming the truth of the representations contained in
Section 7.09 hereof and compliance with Section 10.06 of the
Indenture, the execution and delivery of this Agreement and the other
Operative Agreements and the consummation of the transactions
contemplated hereby and thereby will not involve any transaction
which is prohibited by Section 406 of ERISA or in connection with
which a tax could be imposed pursuant to Section 4975 of the Code.
No part of the funds to be used by the Lessee in satisfaction of its
obligations under this Agreement or any other of the Operative
Agreements to which the Lessee is a party or to which the Lessee is
bound are the assets of any employee benefit plan subject to Title I
of ERISA, or any individual retirement account or an employee benefit
plan subject to Section 4975 of the Code;
as used in this Section 6.01(m), the term "Pension Plan" means an employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA) which is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and which is maintained, or contributed to,
by the Lessee or any ERISA Affiliate, and the term "ERISA Affiliate" means
any entity which together with the Lessee would be treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code;
(n) the Lessee is a Citizen of the United States;
(o) except for the filings referred to in Sections 4.01(f), 4.02(e)
and 4.02(f) hereof, no governmental approval of any kind is required of the
Owner Participant or for the Owner Participant's execution of or
performance under this Agreement or any agreement contemplated hereby by
reason of any fact or circumstance of the Lessee, the nature of the
Aircraft or the Lessee's proposed operations or use of the Aircraft;
(p) on the Delivery Date, all premiums with respect to the insurance
required to be provided by the Lessee on or prior to the Delivery Date
under Article 13 of the Lease have been paid by the Lessee;
(q) on the Delivery Date, all sales or use taxes relating to the
sale of the Aircraft by AVSA to the Owner Trustee which are then or were
theretofore due shall have been paid;
(r) the Lessee is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Lessee is a
party or by which it or any of its Properties or assets may be bound, or in
violation of any applicable law, which default or violation would have a
material adverse effect on the financial condition, business or operations
of the Lessee or its ability to perform any of its obligations under the
Lessee Documents;
(s) no Default or Event of Default or Event of Loss or event, which
with the passage of time or if continued unremedied or unaltered would
constitute an Event of Loss, has occurred or exists;
(t) on the Delivery Date, the Aircraft will be in such condition so
as to enable the airworthiness certificate of such Aircraft to be in good
standing under the Transportation Code; the Aircraft will have been duly
certificated by the FAA as to type and airworthiness; there will be in
effect with respect to the Aircraft a current and valid airworthiness
certificate issued by the FAA pursuant to the Transportation Code; and
there is no fact known to the Lessee which materially adversely affects the
value, utility or condition of the Aircraft;
(u) on the Certificate Closing Date and the Delivery Date, the
Lessee shall not be in default in the performance of any term or condition
of the Purchase Agreement, the Purchase Agreement Assignment, the Engine
Warranty Assignment and the GTA and the aggregate amount of loans shall not
exceed the Debt Portion;
(v) neither the Lessee nor any subsidiary of the Lessee is an
"investment company" or a company "controlled by an investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(w) on the Delivery Date, the Aircraft will, upon delivery, be fully
equipped to operate in commercial service and will comply with all
governmental requirements governing such service; and
(x) there are no broker's or underwriter's fees payable on behalf
of the Lessee in connection with the transactions contemplated in the
Operative Agreements other than those of the Underwriters and First
Chicago Leasing Corporation referred to in Article 10 hereof.
Section 6.02. Offering by Lessee. The Lessee represents and
warrants that it has authorized no one to act on its behalf in connection with
the offer or sale of any interest in the Lessor's Estate or the Trust
Agreement other than First Chicago Leasing Corporation. Neither the Lessee
nor, based on representations of First Chicago Leasing Corporation, anyone
acting on its behalf has directly or indirectly offered any interest in the
Lessor's Estate or the Trust Agreement, or similar interests, for sale to, or
solicited any offer to acquire any of the same from, anyone other than the
Owner Participant and no more than 15 other accredited investors (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended).
Section 6.03. Certain Covenants of Lessee. The Lessee covenants and
agrees with the Owner Participant, the Owner Trustee (in its individual
capacity and as Owner Trustee), the Pass Through Trustee (in its individual
capacity and as Pass Through Trustee) and the Indenture Trustee (in its
individual capacity and as Indenture Trustee) as follows:
(a) The Lessee will cause to be done, executed, acknowledged and
delivered at the Lessee's cost and expense all such further acts,
conveyances and assurances as the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee or the Owner Participant shall reasonably require for
accomplishing the purposes of this Agreement, the Trust Agreement, the
Purchase Agreement, the Purchase Agreement Assignment, the GTA, the Engine
Warranty Assignment, the Indenture, the Indenture and Security Agreement
Supplement, the Tax Indemnity Agreement, the Lease and the Lease Supplement
and the other Operative Agreements to which it is a party. Without
limiting the generality of this Section 6.03(a), the Lessee will promptly
take, or cause to be taken, at the Lessee's cost and expense, such action
with respect to the recording, filing, re-recording and re-filing of the
Indenture, each Indenture and Security Agreement Supplement, the Lease,
each Lease Supplement and any financing statements or other instruments as
may be necessary, or as requested by the Indenture Trustee and appropriate,
to maintain the perfection of the first security interest and the Lien
created by the Indenture, and the Owner Trustee's title to and interest in
the Aircraft and the Lessor's Estate as against the Lessee and any third
parties or if the Lessee cannot take, or cause to be taken, such action,
will furnish to the Indenture Trustee and the Owner Trustee timely notice
of the necessity of such action, together with such instruments, in
execution form, and such other information as may be required to enable
either of them to take such action at the Lessee's cost and expense in a
timely manner.
(b) From and after the Delivery Date, the Lessee shall maintain the
certificates referred to in Section 7.01 of the Lease and shall cause the
Aircraft to be duly registered, and at all times to remain duly registered,
in the name of the Owner Trustee, under the Transportation Code, and shall
furnish to the Owner Trustee such information as may be required to enable
the Owner Trustee to make application for such registration; provided,
however, that the Owner Participant, the Owner Trustee and the Indenture
Trustee agree that if at any time after December 31, 2004, so long as no
Event of Default shall have occurred and be continuing, the Lessee has
requested their consent to the registration of the Aircraft in the name of
the Owner Trustee (or, if appropriate under the laws of such
jurisdiction of reregistration, in the name of the Lessee or a sublessee
as a "lessee" or a "sublessee"), at the Lessee's expense, in a country
listed in Schedule III hereto with which the United States then
maintains normal diplomatic relations (and which is not then
experiencing war or substantial civil unrest), the Owner Participant,
the Owner Trustee and the Indenture Trustee upon receipt by the Owner
Participant, the Owner Trustee and the Indenture Trustee of the
assurances and opinion described below, shall not unreasonably withhold
their consent to such change in registration (it being agreed, without
limitation, that the inability of the Lessee to deliver such assurances
or such opinion shall constitute reasonable grounds to withhold such
consent).
As a condition to any change in the registration of the Aircraft, the
Owner Participant, the Owner Trustee in its individual and trust capacities,
and the Indenture Trustee shall have received:
(i) assurances satisfactory to them:
(A) to the effect that the insurance provisions of the Lease have
been and will be complied with and are and shall be in full force and
effect upon such change of registry;
(B) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft;
(C) that the Owner Trustee's right, title and interest in and to
the Aircraft is recognized and fully enforceable in the new
jurisdiction of registry, that the rights of the Owner Trustee in and
to the Aircraft will not be impaired in such new jurisdiction of
registry and that the new jurisdiction of registry will give effect
to the title and registry of the Aircraft therein substantially to
the same extent as does the Government;
(D) that such new country of registry (x) would provide
substantially equivalent protection for the rights of owner
participants, lessors or lenders in similar transactions as provided
under United States law (except that, in the absence of restrictions
under the laws of such country on rights and remedies of lessors and
secured parties similar to those imposed by Sections 362 and 363 of
the Bankruptcy Code, rights and remedies similar to those available
under Section 1110 of the Bankruptcy Code shall not be required) and
(y)(i) if such change in registration is made other than in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards at least comparable to those of
the FAA, and (ii) if such change in registration is made in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards in conformity with those set
forth in Section 7.02(a)(i) of the Lease;
(E) that import and export certificates and any exchange permits
necessary to allow all Rent and other payments provided for under the
Lease, if required, shall have been procured at the Lessee's own cost
and expense by the Lessee;
(F) that the Lessee shall have effected or caused to be effected
at the Lessee's own cost and expense all recordings and filings that
are required to perfect the Lien of the Indenture;
(G) to the effect that the original indemnities (and any
additional indemnities for which the Lessee is then willing to
enter into a binding agreement to indemnify) in favor of the Owner
Participant, the Owner Trustee (in its individual capacity and as
trustee under the Trust Agreement), the Indenture Trustee (in its
individual capacity, and as trustee under the Indenture), the Pass
Through Trustee (in its individual capacity, and as trustee under
the Pass Through Agreement) and the other Indemnitees under this
Agreement, the Indenture, the Pass Through Agreement and (in the
case of the Owner Participant only) the Tax Indemnity Agreement,
afford each such party substantially the same protection as
provided prior to such change of registry;
(H) that such change will not result in the imposition of, or
increase in the amount of, any Tax (which, for this purpose, includes
the loss of any tax benefits assumed by the Owner Participant to be
available to it based upon the assumptions set forth in Section 2 of
the Tax Indemnity Agreement) for which the Lessee has not agreed to
indemnify the Owner Participant to its reasonable satisfaction, the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee (or
any successor, assign or Affiliate thereof) and the Trust Estate;
(I) that any value added tax, customs duty, tariff or similar
governmental charge relating to the change in jurisdiction of
registration of the Aircraft shall have been paid in full or
adequately provided for by the Lessee to the satisfaction of the
Owner Trustee, the Indenture Trustee and the Owner Participant;
(J) of the payment by the Lessee of any reasonable fees and
expenses of the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee in connection with such change
of registry, including any reasonable attorneys' fees and expenses;
(K) that duties and tariffs, if applicable, shall have been paid
for by the Lessee;
(L) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft and the Trust
Indenture Estate, that all recordings and filings required to so
perfect the Lien of the Indenture have been duly effected, and that
no Liens (except Liens permitted under Section 6.01 of the Lease)
shall arise by reason of such registration; and
(M) that appropriate deregistration powers of attorney in favor of
the Owner Trustee and the Indenture Trustee have been executed and
delivered by the Lessee and any sublessee and, if necessary or
desirable for the effectiveness thereof, filed with the relevant
aeronautics authority; and
(ii) a favorable opinion of counsel (reasonably satisfactory to the
Owner Trustee, the Indenture Trustee and the Owner Participant) in the new
jurisdiction of registry, addressed and reasonably satisfactory to such
parties in scope, form and substance, to the effect:
(A) that the terms (including, without limitation, the governing
law, service-of-process and jurisdictional-submission provisions
thereof) of the Lease and the Indenture are legal, valid, binding and
enforceable in such jurisdiction against the Lessee, any sublessee,
the Owner Trustee and the Indenture Trustee, respectively;
(B) that it is not necessary for the Owner Participant, the Owner
Trustee, the Indenture Trustee or the Pass Through Trustee to
register or qualify to do business or meet other requirements not
already met in such jurisdiction in connection with the registration
in the new jurisdiction (and the filing and/or recordation therein of
the Indenture or the Lease) and the exercise of any rights or
remedies with respect to the Aircraft pursuant to the Lease or the
Indenture or in order to maintain such registration and the Lien of
the Indenture;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b)(i)(D)(x) of this Section 6.03) in respect of the
transactions contemplated hereby, including, without limitation, the
remedies provided in the Indenture and the Lease;
(D) that there is no tort liability of the beneficial owner,
record owner, lessor or mortgagee of an aircraft not in possession
thereof under the laws of such jurisdiction, other than tort
liability which might reasonably have been imposed on such owner,
lessor or mortgagee under the laws of the United States or any state
thereof (it being understood that, in the event such latter opinion
cannot be given in a form satisfactory to the Owner Trustee, the
Owner Participant and the Indenture Trustee, such opinion shall be
waived, if insurance reasonably satisfactory to the Owner
Participant, the Indenture Trustee and the Owner Trustee, in its
individual capacity, is provided, at the Lessee's expense, to cover
such risk and the Lessee undertakes to keep such insurance in full
force and effect);
(E) that the laws of such jurisdiction will not impair the rights
of the Lessor in and to the Aircraft or under the Lease and (unless
the Lessee shall have agreed to provide insurance reasonably
satisfactory to the Indenture Trustee and the Owner Participant
covering the risk of requisition of use of the Aircraft by the
government of registry of the Aircraft) require fair compensation by
the government of such jurisdiction payable in currency freely
convertible into United States dollars for the loss of use of the
Aircraft in the event of such requisition;
(F) that the Owner Trustee's title to the Aircraft is recognized
and fully enforceable in such jurisdiction, that such jurisdiction
will give effect to the title of the Aircraft therein substantially
to the same extent as does the Government, and that the Lien of the
Indenture shall continue as a first priority, duly perfected lien on
the Aircraft;
(G) to such further effect with respect to such other matters as
the Owner Participant, the Owner Trustee, or the Indenture Trustee may
reasonably request; and
(H) the Lien of the Indenture continues to constitute a first
priority, duly perfected Lien on the Aircraft.
(c) The Lessee shall promptly file any reports, or furnish to the
Owner Trustee and the Owner Participant such information as may be required
to enable the Owner Trustee and the Owner Participant timely to file any
reports required to be filed by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any governmental authority.
(d) The Lessee will cause the Special Aviation Counsel to file, and
where appropriate record, on the Delivery Date, AVSA's FAA ▇▇▇▇ of Sale,
the Lease, the Lease Supplement, the Trust Agreement, the Indenture and the
Indenture and Security Agreement Supplement. The following documents shall
be filed and, where appropriate, recorded on the Delivery Date with the
Aeronautics Authority in the following order of priority: first, AVSA's
FAA ▇▇▇▇ of Sale, second, the Application, with the Trust Agreement and the
Affidavits, third, the Indenture with the Indenture and Security Agreement
Supplement attached thereto, and fourth, the Lease with the Lease
Supplement, the Indenture and the Indenture and Security Agreement
Supplement attached thereto.
(e) The Lessee will furnish to the Owner Participant, the Owner
Trustee and the Indenture Trustee annually after the execution of this
Agreement, by March 15 of each year, commencing with the year 1998, an
opinion, reasonably satisfactory to the Owner Participant and the Indenture
Trustee, of Special Aviation Counsel, or other counsel specified from time
to time by the Lessee acceptable to the Lessor and the Indenture Trustee:
(i) stating either (1) that in the opinion of such counsel such action has
been taken with respect to the recording, filing, re-recording and
re-filing of the Lease, the Indenture, the Trust Agreement, and any
supplements to any of them and any financing statements, continuation
statements or other instruments, and all other action has been taken, as is
necessary to maintain the Owner Trustee's title to and interest in the
Aircraft and the Lessor's Estate as against the Lessee and any third
parties and to maintain the perfection of the security interests created by
said documents and reciting the details of such action, or (2) that in the
opinion of such counsel no such action is necessary to maintain such title
or the perfection of such security interests; (ii) specifying all other
action which needs to be taken during the succeeding 14 months in order to
maintain such title and the perfection of such security interests (which
the Lessee agrees timely to take); and (iii) stating that the Owner Trustee
is the owner of legal title to the Aircraft, and the Aircraft is free and
clear of all Liens, except the security interest created by the Indenture
and such as are permitted by the Lease and the Indenture.
(f) The Lessee shall at all times maintain its corporate existence
except as permitted by Section 6.03(g) hereof and all of its rights,
privileges and franchises necessary in the normal conduct of its business,
except for any corporate right, privilege or franchise (i) that it
determines, in its reasonable, good faith business judgment, is no longer
necessary or desirable in the conduct of its business and (ii) the loss of
which will not materially adversely affect or diminish the rights of the
Holders or the Owner Participant.
(g) The Lessee shall not enter into any merger or consolidation, or
convey, transfer or lease all or substantially all of its assets as an
entirety to any Person, unless the surviving corporation or Person which
acquires by conveyance, transfer or lease all or substantially all of the
assets of the Lessee as an entirety (i) is a domestic corporation organized
and existing under the laws of the United States or a political subdivision
thereof, (ii) is a Citizen of the United States, (iii) is a U.S. Air
Carrier, (iv) expressly assumes by an instrument in writing in form and
substance satisfactory to the Owner Participant, the Indenture Trustee and
the Owner Trustee all of the Lessee's obligations hereunder and under the
other Operative Agreements, and each other document contemplated hereby or
thereby and the Lessee delivers such instrument to the Indenture Trustee,
the Owner Participant and the Owner Trustee, (v) provides an opinion from
outside counsel to the Lessee which counsel shall be reasonably
satisfactory to the Owner Participant and the Indenture Trustee and which
opinion shall be reasonably satisfactory to the Owner Participant and the
Indenture Trustee, and an officer's certificate, each stating that such
merger, consolidation, conveyance, transfer or lease and the instrument
noted in clause (iv) above comply with this Section 6.03(g), that such
instrument is a legal, valid and binding obligation of, and is enforceable
against, such survivor or Person, and that all conditions precedent herein
provided for relating to such transaction have been complied with, and (vi)
immediately after such merger, consolidation or conveyance, transfer or
lease, as the case may be, the surviving company (or Person which acquires
by conveyance, transfer or lease the assets of the Lessee) is in compliance
with all of the terms and conditions of this Agreement and the Lease and
each other Operative Agreement and each other document contemplated hereby
or thereby; provided that no such merger, consolidation or conveyance,
transfer or lease shall be permitted if the same gives rise to an Event of
Default.
Upon any consolidation or merger, or any conveyance, transfer or
lease of all or substantially all of the assets of the Lessee and the
satisfaction of the conditions specified in this Section 6.03(g), the
successor corporation formed by such consolidation or into which the Lessee
is merged or the Person to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Lessee under this Agreement and the Lease and each other
Operative Agreement and any other document contemplated hereby and thereby
to which the Lessee is a party with the same effect as if such successor
corporation had been named as the Lessee herein and therein. No such
conveyance, transfer or lease of all or substantially all of the assets of
the Lessee as an entirety shall have the effect of releasing the Lessee or
any successor corporation which shall theretofore have become the Lessee
hereunder in the manner prescribed in this Section 6.03(g) from its
liability hereunder or under the other Operative Agreements. Nothing
contained herein shall permit any lease, sublease, or other arrangement for
the use, operation or possession of the Aircraft except in compliance with
the applicable provisions of the Lease.
(h) The Lessee agrees to give prompt written notice to the Owner
Participant, the Owner Trustee and the Indenture Trustee of any change in
the address of its chief executive office (as such term is used in Section
9-103(3) of the Tennessee Uniform Commercial Code) or of any change in its
corporate name.
(i) The Lessee agrees to furnish to the Owner Participant, the
Lessor and the Indenture Trustee:
(A) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Lessee, a
consolidated balance sheet as of the end of such fiscal year, and the
related consolidated statements of income, common stockholders'
equity, retained earnings and cash flows of the Lessee for the fiscal
year then ended as prepared and certified by the Lessee's independent
certified public accountants, including their opinion;
(B) within sixty (60) days after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Lessee,
a consolidated balance sheet of the Lessee prepared by it as of the
close of the accounting period then ended, together with the related
consolidated statements of income, retained earnings and cash flows
for such accounting period certified by the chief accounting officer
or a financial vice president of the Lessee;
(C) promptly upon their general transmission, copies of all
reports and statements furnished by the Lessee to its stockholders;
(D) promptly after filing with the SEC, copies of the Lessee's
Annual Reports on Form 10-K (including all corresponding annual
reports to shareholders), Quarterly Reports on Form 10-Q and, if
requested, any registration statement or prospectus filed by the
Lessee with any securities exchange or with the SEC;
(E) promptly upon (and in any event within five (5) Business Days
after) any officer of the Lessee obtaining knowledge of any condition
or event which constitutes a Default or an Event of Default, an
officer's certificate specifying the nature and period of existence
thereof and what action the Lessee has taken or is taking or proposes
to take with respect thereto;
(F) from time to time, such other financial information as the
Lessor, the Owner Participant or the Indenture Trustee may
reasonably request.
Concurrently with the delivery of the financial statements referred
to in clause (A) above, the Lessee shall deliver to the Lessor, the Owner
Participant, the Indenture Trustee and the Pass Through Trustee a certificate
of the Lessee, signed by any one of the President, the Chief Financial
Officer, the General Counsel, the Treasurer or the principal accounting
officer of the Lessee, stating that the signer, or an employee reporting to
same, is familiar with the relevant terms of this Agreement and the Lease and
the signer has reviewed, or has caused to be made under such Person's
supervision a review, of the activities of the Lessee and that, to the best of
his or her knowledge, there does not exist any Default or any Event of Default
or if a Default or an Event of Default exists or did exist, specifying the
nature thereof, the period of existence thereof and what action the Lessee has
taken or proposes to take with respect thereto.
Section 6.04. Survival of Representations and Warranties. The
representations and warranties of the Lessee provided in Sections 6.01 and
6.02 hereof and in any other Operative Agreement shall survive the Closings
hereunder and the delivery of the Aircraft and the expiration or other
termination of this Agreement and the other Operative Agreements.
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate. (a) [Reserved]
(b) Owner Participant. The Owner Participant represents and
warrants that its interest in the Lessor's Estate and the Trust Agreement is
being acquired by it for its own account and not with a view to resale or
distribution thereof; provided, however, that the disposition by the Owner
Participant of its interest in the Lessor's Estate and the Trust Agreement
shall, subject to the terms and provisions of Section 7.03(d) hereof (except
as provided in clause (ii) of Section 3.05(a) hereof), at all times be within
its control and the foregoing representation shall not limit the Owner
Participant's right to transfer or sell such interests pursuant to the terms
of this Agreement. Neither the Owner Participant nor anyone authorized to act
on its behalf has directly or indirectly offered any interest in the Lessor's
Estate or the Trust Agreement, or in any similar security, for sale to, or
solicited any offer to acquire any of the same from, anyone. The Owner
Participant further represents and warrants that neither it nor anyone
authorized to act on its behalf has made or will make any offer, solicitation
or sale of any interest in the Lessor's Estate or the Trust Agreement in
violation of the provisions of Section 5 of the Securities Act of 1933, as
amended. No representation in this Section 7.01(b) shall include any action
or inaction of the Lessee, First Chicago Leasing Corporation, the
Subordination Agent, the Underwriters or any Affiliates of any thereof whether
or not such action or inaction is purportedly on behalf of the Owner Trustee,
the Owner Participant or any of their Affiliates.
Section 7.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity and as Trustee, and the Owner Participant
severally represents and warrants that it is or will be a Citizen of the
United States on the Delivery Date. If the Owner Participant or the Owner
Trustee in its individual capacity does not comply with the requirements of
this Section 7.02, the Owner Trustee, the Indenture Trustee and the Owner
Participant hereby agree that a Default or an Event of Default shall not be
deemed to have occurred and be continuing under the Lease due to
non-compliance by the Lessee with the registration requirements in the Lease
occasioned by the noncompliance of the Owner Participant or the Owner Trustee.
(b) Owner Trustee. The Owner Trustee, in its individual capacity,
covenants that if at any time on or after the Delivery Date it shall have
actual knowledge that it has ceased to be a Citizen of the United States, it
will resign immediately as the Owner Trustee if such citizenship is necessary
under the Transportation Code as in effect at such time or, if it is not
necessary under the Transportation Code as in effect at such time, if it is
informed in writing by the Lessee, the Indenture Trustee or the Owner
Participant that such lack of United States citizenship would have any adverse
effect on the Lessee, the Indenture Trustee, the Holders or the Owner
Participant. The Owner Trustee, in its individual capacity, further covenants
that if at any time it appears reasonably probable that it will cease to be a
Citizen of the United States based on information that is (i) known to a
Responsible Officer or (ii) generally known to the public, it will promptly so
notify, to the extent permitted by law, all parties to this Agreement.
(c) Owner Participant. The Owner Participant agrees, solely for the
benefit of the Lessee, the Pass Through Trustee, the Indenture Trustee and the
Owner Trustee, that if at any time on or after the Delivery Date when the
Aircraft is registered or the Lessee proposes to register the Aircraft in the
United States (i) either it shall cease to be, or an event which has been
publicly disclosed has occurred of which the Owner Participant has knowledge
and which will cause the Owner Participant to cease to be, a Citizen of the
United States and (ii) the Aircraft shall or would therefore become ineligible
for registration in the name of the Owner Trustee under the Transportation
Code and regulations then applicable thereunder, then the Owner Participant
shall give notice thereof to the Lessee, the Owner Trustee and the Indenture
Trustee and shall (at its own expense and without any reimbursement or
indemnification from the Lessee) immediately (and in any event within a period
of 20 days) (x) effect a voting trust or other similar arrangement, (y)
transfer in accordance with the terms of this Agreement and the Trust
Agreement all its rights, title and interest in and to such Trust Agreement,
the Lessor's Estate and this Agreement, or (z) take any other alternative
action that would prevent any deregistration, or maintain or permit the United
States registration, of the Aircraft. It is agreed that the Owner Participant
shall be liable to pay promptly on request (A) to each of the other parties
hereto any actual damages (but not consequential damages) suffered by any such
other party to the extent the same shall result from the representation and
warranty of the Owner Participant in the first sentence of Section 7.02(a)
hereof proving to be untrue as of the Delivery Date; and (B) to the Lessee,
the Indenture Trustee or the Pass Through Trustee for any damages actually
(but not consequentially) incurred by the Lessee, the Indenture Trustee and
the Pass Through Trustee as a result of the Owner Participant's failure to
comply with its obligations pursuant to the first sentence of this Section
7.02(c); provided, that, the foregoing shall not restrict the Pass Through
Trustee or the Indenture Trustee from asserting against the Owner Participant
any damages actually incurred by the holders of any Pass Through Certificates.
Each party hereto agrees, upon the request and at the sole expense of the
Owner Participant, to cooperate with the Owner Participant in complying with
its obligations under the provisions of the first sentence of this Section
7.02(c), but without any obligation on the part of such other party to take
any action believed by it in good faith to be unreasonably burdensome to such
party or materially adverse to its business interests.
Section 7.03. Representations, Warranties and Covenants of Owner
Participant. (a) Representations, Warranties and Covenants. In addition to
and without limiting its other representations and warranties provided for in
this Article 7, the Owner Participant represents and warrants on the date
hereof and as of the Certificate Closing Date and the Delivery Date that:
(i) it is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware and it has full
corporate power, authority and legal right to carry on its present business
and operations, to own or lease its Properties and to enter into and to
carry out the transactions contemplated by this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative Agreements
to which it is party;
(ii) the execution, delivery and performance by it of this
Agreement, the Tax Indemnity Agreement, and the Trust Agreement and the
other Operative Agreements to which it is party have been duly authorized
by all necessary corporate action on its part and, assuming the accuracy of
the Lessee's representations in Section 6.01(o) hereof, do not require any
governmental approvals that would be required to be obtained by the Owner
Participant;
(iii) based on the representations, warranties and covenants
contained in Sections 6.01(m)(viii), 6.02 and 7.09 hereof and compliance
with Section 10.06 of the Indenture, neither the execution, delivery or
performance by the Owner Participant of this Agreement, the Tax Indemnity
Agreement, and the Trust Agreement and the other Operative Agreements to
which it is party nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent or approval under any law, governmental rule or
regulation applicable to the Owner Participant or the charter documents,
as amended, or bylaws, as amended, of the Owner Participant or any
order, writ, injunction or decree of any court or governmental authority
against the Owner Participant or by which it or any of its Properties is
bound or any indenture, mortgage or contract or other agreement or
instrument to which the Owner Participant is a party or by which it or
any of its Properties is bound, or constitutes or will constitute a
default thereunder or results or will result in the imposition of any
Lien upon any of its Properties;
(iv) this Agreement, the Tax Indemnity Agreement and the Trust
Agreement and the other Operative Agreements to which it is party have been
or on the Certificate Closing Date will be duly executed and delivered by
the Owner Participant and constitute or on the Certificate Closing Date
will constitute the legal, valid and binding obligation of the Owner
Participant enforceable against it in accordance with their terms except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws or equitable principles of general
application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(v) it is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Owner
Participant is a party or by which it or any of its Properties may be
bound, or in violation of any applicable law, which default or violation
would have a material adverse effect on the financial condition, business
or operations of the Owner Participant or an adverse effect on the ability
of the Owner Participant to perform its obligations under this Agreement
and the other Operative Agreements to which it is or is to be a party;
(vi) there are no pending or, to the knowledge of the Owner
Participant, threatened actions, suits, investigations or proceedings
against the Owner Participant before any court, administrative agency or
tribunal which are expected to materially adversely affect the ability of
the Owner Participant to perform its obligations under this Agreement and
the other Operative Agreements to which it is or is to be a party and the
Owner Participant knows of no pending or threatened actions or proceedings
before any court, administrative agency or tribunal involving it in
connection with the transactions contemplated by the Operative Agreements;
(vii) neither the execution and delivery by it of this Agreement or
the other Operative Agreements to which it is a party nor the performance
of its obligations hereunder or thereunder requires the consent or approval
of or the giving of notice to, the registration with, or the taking of any
other action in respect of, any governmental authority or agency that would
be required to be obtained or taken by the Owner Participant except for
filings contemplated by this Agreement;
(viii) no part of the funds to be used by it to acquire the interests
to be acquired by the Owner Participant under this Agreement constitutes
assets (within the meaning of ERISA and any applicable rules and
regulations) of any employee benefit plan subject to Title I of ERISA or of
any plan or individual retirement account subject to Section 4975 of the
Code; and
(ix) it is a "U.S. Person" as defined in Section 7701(a)(30) of the
Code and is not a tax resident of another country.
Notwithstanding the foregoing or anything else contained in this
Agreement, the Owner Participant makes no representation or warranty in this
Agreement with respect to laws, rules or regulations relating to aviation or
to the nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship, design,
patent or trademark infringement, operation, merchantability or fitness for
use of the Aircraft, other than such laws, rules or regulations relating to
the citizenship requirements of the Owner Participant under applicable
aviation law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens attributable to it (or
an Affiliate thereof) and that there will not be any Lessor's Lien
attributable to it (or an Affiliate thereof) on the Certificate Closing Date.
The Owner Participant agrees with and for the benefit of the Lessee, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee that the Owner
Participant will, at its own cost and expense, take such action as may be
necessary (by bonding or otherwise, so long as neither the Lessee's operation
and use of the Aircraft nor the validity and priority of the Lien of the
Indenture is impaired) to duly discharge and satisfy in full, promptly after
the same first becomes known to the Owner Participant, any Lessor's Lien
attributable to the Owner Participant (or an Affiliate thereof), provided,
however, that the Owner Participant shall not be required to discharge or
satisfy such Lessor's Lien which is being contested by the Owner Participant
in good faith and by appropriate proceedings so long as such proceedings do
not involve any material danger of the sale, forfeiture or loss of the
Aircraft or the Lessor's Estate or the Trust Indenture Estate or any interest
in any thereof or otherwise materially adversely affect the validity or
priority of the Lien of the Indenture.
(c) Reimbursement. Without limiting any other rights the parties
hereto may have as a result of any breach by the Owner Participant of its
obligations in Section 7.03(b) hereof, the Owner Participant agrees to
reimburse each other party hereto for all reasonable legal fees and expenses
of counsel that may be incurred by any such party as a result of the failure
of the Owner Participant to discharge and satisfy any such Lessor's Lien in
accordance with the terms of Section 7.03(b) hereof.
(d) Assignment of Interests of Owner Participant. At any time after
the Delivery Date (or upon the direction of the Lessee if Section 3.05(a)(i)
hereof shall be applicable), and subject to the conditions set forth in this
Section 7.03(d), the Owner Participant may assign, convey or otherwise
transfer to a single institutional investor or an Affiliate of an
institutional investor all (but not less than all) of the Beneficial Interest,
provided that it gives the Lessee and the Indenture Trustee at least 10
Business Days' notice of such assignment, conveyance or other transfer and
provided further that the Owner Participant and any Owner Participant
Guarantor shall remain liable for all obligations of the Owner Participant
under the Trust Agreement and the Operative Agreements to which the Owner
Participant is a party to the extent (but only to the extent) relating to the
period on or before the date of such transfer and provided that the transferee
agrees by a written instrument substantially in the form attached hereto as
Exhibit G-1 to assume primary liability for all obligations as an Owner
Participant under the Trust Agreement and the other Operative Agreements to
which such Owner Participant is a party relating to the period after the date
of transfer. Any such transferee shall (a) be (i) a bank, savings
institution, finance company, leasing company or trust company, national
banking association acting for its own account or in a fiduciary capacity as
trustee or agent under any pension, retirement, profit sharing or similar
trust or fund, insurance company, fraternal benefit society or corporation
acting for its own account having a combined capital and surplus (or, if
applicable, consolidated tangible net worth or its equivalent) of not less
than $75,000,000, (ii) a subsidiary of any Person described in clause (i)
where such Person provides (A) support for the obligations assumed by such
transferee subsidiary reasonably satisfactory to the Lessee, the Owner Trustee
and the Indenture Trustee or (B) an unconditional guaranty substantially in
the form of Exhibit G-2 attached hereto of such transferee subsidiary's
obligations, or (iii) an Affiliate of the transferring Owner Participant, so
long as such Affiliate has a combined capital and surplus (or, if applicable,
consolidated tangible net worth or its equivalent) of not less than
$75,000,000, (b) be legally capable of binding itself to the obligations of
the Owner Participant and shall expressly agree to assume all obligations of
the Owner Participant under the Trust Agreement and this Agreement and (c)
provide representations substantially similar to those contained in Sections
7.02(a) and 7.03(a) hereof. In the event of any such assignment, conveyance
or transfer, the transferee shall become a party to the Trust Agreement and
shall agree to be bound by all the terms of and will undertake all of the
obligations of the Owner Participant contained in the Trust Agreement and the
other Operative Agreements in the manner set forth in the form attached as
Exhibit G-1. A transferee hereunder shall be (i) a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (or any successor provision thereto) and
such transferee shall be personally liable for any debt service to the extent
that its receipt of rentals is reduced by reason of any withholding Taxes that
result from such transferee's failure to be such a "U.S. Person" and (ii) a
Citizen of the United States or has established a voting trust, voting powers
or other arrangement reasonably satisfactory to the Indenture Trustee and the
Lessee to permit the Owner Trustee to be the registered owner of the Aircraft
under the Transportation Code. A transferee hereunder shall not be, and in
acquiring the Beneficial Interest shall not use the assets of, an employee
benefit plan subject to Title I of ERISA or an individual retirement account
or a plan subject to Section 4975 of the Code. Assuming the truth of the
representations made in Sections 6.01(m) and 7.06 hereof and compliance with
Section 10.06 of the Indenture, no such assignment, conveyance or transfer
shall violate any provision of law or regulation or create a relationship
which would be in violation thereof. The Owner Trustee shall not be on notice
of or otherwise bound by any such assignment, conveyance or transfer unless
and until it shall have received an executed counterpart of the instrument of
such assignment, conveyance or transfer. Upon any such disposition by the
Owner Participant to a transferee as above provided, the transferee shall be
deemed the "Owner Participant" or "Trustor" for all purposes of the Operative
Agreements, and shall be deemed to have made all the payments previously made
by its transferor and to have acquired the same interest in the Lessor's
Estate as theretofore held by its transferor; and each reference therein to
the "Owner Participant" or "Trustor" shall thereafter be deemed a reference
to such transferee. Notwithstanding anything to the contrary contained in
this Section 7.03(d), in no event shall the Owner Participant transfer its
interest in the Beneficial Interest to any entity whose business is that of
a nationwide or worldwide overnight or expedited delivery small package air
courier, cargo or freight deliverer or which competes with the Lessee in
such lines of business. The Lessee agrees that it will reasonably
cooperate with the Owner Participant in effecting an assignment of the
Owner Participant's interests including, without limitation, providing
letters to any successor Owner Participant permitting such successor Owner
Participant to rely on any opinions provided by the Lessee on the Delivery
Date.
(e) Actions with Respect to Lessor's Estate, Etc. The Owner
Participant agrees that it will not take any action to subject the Lessor's
Estate or the trust established by the Trust Agreement, as debtor, to the
reorganization or liquidation provisions of the Bankruptcy Code or any other
applicable bankruptcy or insolvency statute.
Section 7.04. Representations, Covenants and Warranties of SSB and
the Owner Trustee. (a) In addition to and without limiting its other
representations and warranties provided for in this Article 7, SSB represents
and warrants, in its individual capacity with respect to items (i), (ii),
(iii)(A), (iv), (v), (vi) and (vii) below, and as the Owner Trustee with
respect to items (iii)(B) and (iv) on the date hereof and as of the
Certificate Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
with its principal place of business and chief executive office (as such
terms are used in Article 9 of the Uniform Commercial Code) at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department
and has full corporate power and authority, in its individual capacity or
(assuming the Trust Agreement has been duly authorized, executed and
delivered by the Owner Participant) as the Owner Trustee, as the case may
be, to carry on its business as now conducted, and to execute, deliver and
perform this Agreement and the Operative Agreements to which it is or is to
be a party;
(ii) the execution, delivery and performance by SSB, either in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement and the Operative Agreements to which it is or is to be party
have been duly authorized by all necessary corporate action on its part,
and do not contravene its articles of association or by-laws; each of this
Agreement and the other Operative Agreements to which it is or is to be a
party has been duly authorized, and has been duly executed and delivered
or, in the case of the Operative Agreements identified in Section 4.02(c)
hereof, will on the Delivery Date be duly executed and delivered by SSB,
either in its individual capacity or as the Owner Trustee, as the case may
be, and neither the execution and delivery thereof nor SSB's performance
of or compliance with any of the terms and provisions thereof will violate
any Federal or Connecticut law or regulation governing SSB's banking or
trust powers;
(iii) (A) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or is
to be party when duly executed and delivered will, to the extent each such
document is entered into by SSB in its individual capacity, constitute the
legal, valid and binding obligation of SSB in its individual capacity
enforceable against it in such capacity in accordance with its respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and the performance by SSB in its individual capacity of
any of its obligations thereunder does not contravene any lease, regulation
or contractual restriction binding on SSB in its individual capacity;
(B) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or
is to be party when duly executed and delivered will, to the extent each
such document is entered into by the Owner Trustee in its trust
capacity, constitute the legal, valid and binding obligation of the
Owner Trustee enforceable against it in such capacity in accordance with
its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights (regardless of whether enforceability
is considered in a proceeding in equity or at law), and the performance
by the Owner Trustee of any of its obligations thereunder does not
contravene any lease, regulation or contractual restriction binding on
the Owner Trustee;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against SSB before any court or administrative agency
which would materially and adversely affect the ability of SSB, either
in its individual capacity or as the Owner Trustee, as the case may be,
to perform its obligations under the Operative Agreements to which it is
or is to be party;
(v) it shall give the Lessee, the Indenture Trustee and the Owner
Participant at least thirty (30) days' prior written notice in the event of
any change in its chief executive office or name;
(vi) neither the execution and delivery by it, either in its
individual capacity or as the Owner Trustee, as the case may be, of any of
the Operative Agreements to which it is or is to be a party, requires on
the part of SSB in its individual capacity or any of its Affiliates the
consent or approval of or the giving of notice to, the registration with,
or the taking of any other action in respect of, any Federal or Connecticut
governmental authority or agency governing its banking or trust powers; and
(vii) on the Certificate Closing Date, the proceeds arising from the
issuance and sale of the Certificates shall be free of Lessor's Liens
attributable to SSB in its individual capacity and on the Delivery Date the
Owner Trustee shall be holding whatever title to the Aircraft as was
conveyed to it by AVSA, the Aircraft shall be free of Lessor's Liens
attributable to SSB in its individual capacity and SSB in its individual
capacity is a Citizen of the United States.
(b) Lessor's Liens. SSB, in its individual capacity, further
represents, warrants and covenants that there are no Lessor's Liens
attributable to it in its individual capacity and that there will not be any
such Lessor's Liens on the Certificate Closing Date or the Delivery Date. The
Owner Trustee, in its trust capacity, and at the cost and expense of the
Lessee, covenants that it will in its trust capacity promptly, and in any
event within 30 days after the same shall first become known to it, take such
action as may be necessary to discharge duly any Lessor's Liens attributable
to it in its trust capacity. SSB, in its individual capacity, covenants and
agrees that it will at its own expense take such action as may be necessary to
duly discharge and satisfy in full, promptly, and in any event within 30 days
after the same shall first become known to it, any Lessor's Liens attributable
to it in its individual capacity which may arise at any time after the date of
this Agreement.
(c) Indemnity for Lessor's Liens. SSB, in its individual capacity,
agrees to indemnify and hold harmless the Lessee, the Indenture Trustee, the
Owner Participant and the Pass Through Trustee and the Owner Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Pass Through Trustee or the
Owner Trustee as a result of the failure of SSB to discharge and satisfy any
Lessor's Liens attributable to it in its individual capacity, as described in
Section 7.04(b) hereof.
(d) Securities Act. None of SSB, the Owner Trustee or any Person
authorized by either of them to act on its behalf has directly or indirectly
offered or sold or will directly or indirectly offer or sell any interest in
the Lessor's Estate, or in any similar security relating to the Lessor's
Estate, or in any security the offering of which for purposes of the
Securities Act of 1933, as amended, would be deemed to be part of the same
offering as the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person.
(e) Actions With Respect to Lessor's Estate, Etc. Neither SSB, in
its individual capacity, nor the Owner Trustee will take any action to subject
the Lessor's Estate or the trust established by the Trust Agreement, as
debtor, to the reorganization or liquidation provisions of the Bankruptcy Code
or any other applicable bankruptcy or insolvency statute.
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee. (a) The Indenture Trustee in its individual capacity (other
than as the Pass Through Trustee) represents on the date hereof and as of the
Certificate Closing Date and the Delivery Date as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Indenture, this Agreement and the other Operative Agreements to
which it is a party and to authenticate the Certificates to be delivered on
the Certificate Closing Date;
(ii) the Indenture and this Agreement and the other Operative
Agreements to which it is or is to be a party, and the authentication of
the Certificates to be delivered on the Certificate Closing Date, have been
duly authorized by all necessary corporate action on its part, and neither
the execution and delivery thereof nor its performance of any of the terms
and provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under, its articles of association or
by-laws;
(iii) each of the Indenture and this Agreement, and the other
Operative Agreements to which it is or is to be a party, has been duly
executed and delivered or, in the case of the Operative Agreements
identified in Section 4.02(c) hereof, will on the Delivery Date be executed
and delivered by it and, assuming that each such agreement is the legal,
valid and binding obligation of each other party thereto, is (or will be,
as the case may be), the legal, valid and binding obligation of the
Indenture Trustee, enforceable against the Indenture Trustee in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(iv) neither the execution and delivery by it of the Indenture and
this Agreement and the other Operative Agreements to which it is or is to
be a party, nor the performance by it of any of the transactions
contemplated hereby or thereby, requires the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any Federal or state governmental authority or agency
governing its banking and trust powers; and
(v) on the Certificate Closing Date, the Indenture Trustee holds
the Liquid Collateral on behalf of the Owner Trustee and on the Delivery
Date, the Indenture Trustee will hold the original counterparts of the
Lease and the Lease Supplement.
(b) Indenture Trustee's Liens. The Indenture Trustee, in its
individual capacity, further represents, warrants and covenants that there are
no Indenture Trustee's Liens attributable to it in its individual capacity and
that there will not be any Indenture Trustee's Liens on the Certificate
Closing Date or, as at and following the Delivery Date, the Aircraft. The
Indenture Trustee, in its individual capacity, covenants and agrees that it
will at its own expense take such action as may be necessary to duly discharge
and satisfy in full, promptly, and in any event within 30 days, after the same
shall first become known to it, any Indenture Trustee's Liens.
(c) Indemnity for Indenture Trustee's Liens. The Indenture Trustee,
in its individual capacity, agrees to indemnify and hold harmless the Lessee,
the Owner Participant, the Owner Trustee and the Pass Through Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Owner Trustee or the Pass
Through Trustee as a result of the failure of the Indenture Trustee to
discharge and satisfy any Indenture Trustee's Liens attributable to it in its
individual capacity, as described in Section 7.05(b) hereof.
Section 7.06. Indenture Trustee's Notice of Default. The Indenture
Trustee agrees to give the Owner Participant notice of any Default or Event of
Default promptly upon a Responsible Officer of the Indenture Trustee having
actual knowledge thereof.
Section 7.07. Releases from Indenture. The Indenture Trustee
covenants and agrees, for the benefit of the Lessee and the Owner Participant,
to execute and deliver the instruments of release from the Lien of the
Indenture which it is required to execute and deliver in accordance with the
provisions of Article XIV of the Indenture, and the Owner Participant agrees,
for the benefit of the Lessee, to cause the Owner Trustee to request the
Indenture Trustee to execute and deliver such instruments of release upon
written notice from the Lessee to make such request.
Section 7.08. Covenant of Quiet Enjoyment. Each of the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the Owner
Trustee covenants and agrees as to itself only that, so long as no Event of
Default under the Lease has occurred and is continuing, neither the Owner
Participant (or the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be) nor any Person lawfully claiming through the
Owner Participant (or the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, as the case may be) shall interfere with the Lessee's right
quietly to enjoy the Aircraft during the Term without hindrance or disturbance
by the Owner Participant (or the Owner Trustee, the Pass Through Trustee or
the Indenture Trustee, as the case may be).
Section 7.09. Pass Through Trustee's Representations and Warranties.
The Pass Through Trustee, in its individual capacity (except with respect to
clause (iii) below), represents and warrants as of the date hereof (except as
otherwise provided), as of the Pass Through Closing Date, the Certificate
Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Pass Through Agreement, the Series Supplements, the Intercreditor
Agreement and this Agreement and to execute and authenticate the Pass
Through Certificates to be delivered on the Pass Through Closing Date;
(ii) the execution, delivery and performance of this Agreement,
the Pass Through Agreement and the Series Supplements and the
performance of its obligations hereunder and thereunder (including the
execution and authentication of the Pass Through Certificates to be
delivered on the Pass Through Closing Date) have been fully authorized
by all necessary corporate action on its part, and, subject to (A) the
registration of the issuance and sale of the Pass Through Certificates
under the Securities Act, (B) compliance with any applicable state
securities laws and (C) the qualification of the Pass Through Agreement
under the Trust Indenture Act, neither the execution and delivery
thereof nor its performance of any of the terms and provisions thereof
will violate any Federal or Utah law or regulation relating to its
banking or trust powers or contravene or result in any breach of, or
constitute any default under its articles of association, or bylaws or
the provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it or its properties may be bound or
affected; and
(iii) each of this Agreement and the Pass Through Agreement has
been, and as of the Pass Through Closing Date the Series Supplements
will be, duly executed and delivered by it (in its individual and trust
capacities) and, assuming that each such agreement is the legal, valid
and binding obligation of each other party thereto, is or will be, as
the case may be, the legal, valid and binding obligation of the Pass
Through Trustee (in its individual and trust capacities), enforceable in
accordance with its respective terms except as limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 7.10. Survival of Representations, Warranties and Covenants.
The representations, warranties and covenants of the Owner Participant, the
Owner Trustee (in its individual or trust capacity), the Pass Through Trustee
(in its individual or trust capacity), the Indenture Trustee (in its
individual or trust capacity) and the Subordination Agent (in its individual
or trust capacity) provided for in this Article 7, and their respective
obligations under any and all of them, shall survive the Closings, the
delivery of the Aircraft and the expiration or other termination of this
Agreement, and the other Operative Agreements.
Section 7.11. Lessee's Assumption of the Certificates. (a) Subject
to compliance by the Lessee with all of its obligations under the Operative
Agreements, each of the Owner Participant, the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Lessee covenants and agrees that if
the Lessee elects to terminate the Lease and to purchase the Aircraft pursuant
to Section 4.02(a)(A), (D) or (E) of the Lease, and so long as no Event of
Default shall have occurred and be continuing then, upon compliance with the
applicable provisions of said Section 4.02(a) of the Lease, the Owner Trustee
will transfer to the Lessee, without recourse or warranty (except as to the
absence of Lessor's Liens attributable to the Owner Trustee) but subject to
the Lien of the Indenture, all of the Owner Trustee's right, title and
interest in and to the Aircraft, and if the Lessee, in connection with such
purchase, elects pursuant to Section 4.02(a)(A), (D) or (E) of the Lease to
assume the obligations of the Owner Trustee to the Indenture Trustee and the
Holders under the Indenture, the Certificates and hereunder, then the Lessee
shall so notify the Indenture Trustee (such notice to be given at least 30 and
not more than 60 days prior to the effective date of such assumption), and
each of the parties shall execute and deliver appropriate documentation
permitting the Lessee to assume such obligations on the basis of full recourse
to the Lessee, maintaining for the benefit of the Holders the security
interest in the Aircraft created by the Indenture, and upon compliance with
the provisions of this Section 7.11 releasing the Owner Participant and the
Owner Trustee from all obligations in respect of the Certificates, the
Indenture, this Agreement and the other Operative Agreements, except any
obligations relating to the period prior to such assumption and take all
such other actions, at the Lessee's expense, as are reasonably necessary to
permit such assumption by the Lessee.
(b) In connection with such assumption:
(i) the Lessee shall execute and deliver an instrument satisfactory
in form and substance to the Indenture Trustee (A) pursuant to which the
Lessee irrevocably and unconditionally assumes and undertakes, with full
recourse to the Lessee, to pay, satisfy and discharge when and as due (at
the stated maturity thereof, by acceleration or otherwise) the principal
of, Make-Whole Premium, if any, interest and all other sums owing on all
Outstanding Certificates (or on the Lessee's substituted obligations) in
accordance with their terms and to punctually perform and observe all of
the covenants and obligations hereunder and under the Indenture and the
Certificates (as the same may be amended in connection with such
assumption) to be performed or observed by the Owner Trustee and (B) which
contains amendments to the Indenture, in form and substance satisfactory to
the Holders and the Indenture Trustee, that incorporate therein such
provisions from the Lease and this Agreement as may be appropriate,
including, without limitation, events of default substantially identical in
scope and effect to those set forth in the Lease and covenants
substantially identical to the covenants of the Lessee hereunder and under
the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
7.11(b), any Uniform Commercial Code financing statements relating thereto,
and any other documents which shall be necessary (or reasonably requested
by the Indenture Trustee) to establish the Lessee's title to and interest
in the Aircraft or to reflect the substitution of the Lessee for the Owner
Trustee under the Operative Agreements or to continue the perfection of the
security interests in the Aircraft and the other rights, Property and
interests included in the Trust Indenture Estate for the benefit of the
Holders (or the Lessee's substituted obligations) shall be filed in such
form, manner and places as are necessary or, in the reasonable opinion of
the Indenture Trustee, advisable for such purpose;
(iii) the Indenture Trustee shall have received an insurance report
dated the effective date of such assumption of an independent insurance
broker and certificates of insurance, each in form and substance
satisfactory to the Indenture Trustee, as to the due compliance as of the
effective date of such assumption with the terms of Article 13 of the Lease
(as it relates to the Indenture Trustee) relating to the insurance with
respect to the Aircraft;
(iv) the Indenture Trustee shall have received evidence that as of
the effectiveness of the assignment on the date of such assumption the
Aircraft is free and clear of all Liens other than the Lien of the
Indenture and other Permitted Liens;
(v) the Indenture Trustee shall have received a certificate from
the Lessee that no Event of Default shall have occurred and be continuing
as of the effective date of such assumption; and
(vi) the Indenture Trustee shall have received (A) from counsel for
the Lessee (who may be the Lessee's General Counsel) a legal opinion, in
form and substance satisfactory to the Indenture Trustee (w) with respect
to the compliance of the assumption contemplated hereby with the terms,
provisions and conditions hereof, (x) with respect to the due
authorization, execution, delivery, validity and enforceability of the
instrument referred to in paragraph (i) of this Section 7.11(b), (y)
with respect to the continued perfection of the first and prior Lien and
security interest in the Aircraft for the benefit of the Holders of the
Certificates (or the Lessee's substituted obligations) referred to in
paragraph (ii) of this Section 7.11(b) and (z) with respect to the
continued availability of the benefits of Section 1110 of the Bankruptcy
Code to the Indenture Trustee for the benefit of the Holders with
respect to the Aircraft after giving effect to such assumption, (B) from
counsel to the Indenture Trustee and Special Aviation Counsel, a legal
opinion comparable to the respective opinions delivered on the
Certificate Closing Date or the Delivery Date, as the case may be, with
such changes therein as may be appropriate in light of such assumption,
and (C) in the case of each opinion described in clause (A) or (B)
above, covering such additional matters as the Indenture Trustee shall
reasonably request.
(c) The Lessee shall pay all reasonable expenses (including
reasonable fees and expenses of counsel) of the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee and the Owner Participant in connection with
such assumption.
Section 7.12. Indebtedness of Owner Trustee. So long as the
Indenture is in effect, the Owner Trustee, not in its individual capacity, but
solely as trustee under the Trust Agreement, shall not incur any indebtedness
for borrowed money except as expressly contemplated herein or in any other
Operative Agreement (excluding the Tax Indemnity Agreement) and shall not
engage in any business or other activity other than the transactions
contemplated herein or in any other Operative Agreement (excluding the Tax
Indemnity Agreement) and all necessary or appropriate activity related
thereto.
Section 7.13. Compliance with Trust Agreement, Etc. Each of the
Owner Participant, SSB and the Owner Trustee agrees with the Lessee, the
Indenture Trustee and the Pass Through Trustee that so long as the Lien of the
Indenture shall be in effect it will (i) comply with all of the terms of the
Trust Agreement applicable to it in its respective capacity, the noncompliance
with which would materially adversely affect any such party and (ii) not take
any action, or cause any action to be taken, to amend, modify or supplement
any other provision of the Trust Agreement in a manner that would materially
adversely affect any such party without the prior written consent of such
party. The Owner Trustee confirms for the benefit of the Lessee, the
Indenture Trustee and the Pass Through Trustee that it will comply with the
provisions of Article 2 of the Trust Agreement. Notwithstanding anything else
to the contrary in the Trust Agreement, so long as the Lease remains in
effect, the Owner Participant agrees not to terminate or revoke the trust
created by the Trust Agreement without the consent of the Lessee. If and so
long as the Indenture shall not have been discharged the consent of the
Indenture Trustee shall also be required prior to any termination or
revocation of such trust and in addition, the Owner Participant will, at the
Lessee's expense, promptly and duly execute and deliver to the Indenture
Trustee such documents and assurances including, without limitation,
conveyances, financing statements and continuation statements with respect to
financing statements and take such further action as the Indenture Trustee may
from time to time reasonably request and furnish in order to protect the
rights and remedies created or intended to be created in favor of the
Indenture Trustee under the Indenture and to create for the benefit of the
Certificate Holders a valid first priority Lien with respect to, and a first
and prior perfected security interest in, the Trust Indenture Estate.
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants. (a) Representations and Warranties. The Subordination Agent
represents and warrants as of the date hereof (except as otherwise provided),
as of the Pass Through Closing Date, the Certificate Closing Date and the
Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the corporate power and authority to enter into and perform its
obligations under this Agreement, the Liquidity Facilities and the
Intercreditor Agreement;
(ii) the execution, delivery and performance of this Agreement, each
of the Liquidity Facilities and the Intercreditor Agreement and the
performance of its obligations hereunder and thereunder have been fully
authorized by all necessary corporate action on its part, and, neither the
execution and delivery thereof nor its performance of any of the terms and
provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under its articles of association, or
bylaws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it or its properties may be
bound or affected;
(iii) each of this Agreement, the Liquidity Facilities and the
Intercreditor Agreement has been duly executed and delivered by it and,
assuming that each such agreement is the legal, valid and binding
obligation of each other party thereto, is or will be, as the case may be,
the legal, valid and binding obligation of the Subordination Agent,
enforceable in accordance with its respective terms except as limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the enforcement
of creditors' rights generally (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(iv) there are no Taxes payable by the Subordination Agent imposed
by the State of Utah or any political subdivision or taxing authority
thereof in connection with the execution, delivery and performance by
the Subordination Agent of this Agreement, any of the Liquidity
Facilities or the Intercreditor Agreement (other than franchise or other
taxes based on or measured by any fees or compensation received by the
Subordination Agent for services rendered in connection with the
transactions contemplated by the Intercreditor Agreement or any of the
Liquidity Facilities), and there are no Taxes payable by the
Subordination Agent imposed by the State of Utah or any political
subdivision thereof in connection with the acquisition, possession or
ownership by the Subordination Agent of any of the Certificates other
than franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered
in connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities);
(v) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent to
perform its obligations under this Agreement, the Intercreditor Agreement
or any Liquidity Facility;
(vi) the Subordination Agent has not directly or indirectly offered
any Certificate for sale to any Person or solicited any offer to acquire
any Certificates from any Person, nor has the Subordination Agent
authorized anyone to act on its behalf to offer directly or indirectly any
Certificate for sale to any Person, or to solicit any offer to acquire any
Certificate from any Person; and the Subordination Agent is not in default
under any Liquidity Facility; and
(vii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter or the Lessee.
(b) Covenants. (i) The Subordination Agent agrees not to amend any
Liquidity Facility without the consent of the Lessee (so long as no Event of
Default shall have occurred and be continuing) and of the Owner Participant
(such consents not to be unreasonably withheld).
(ii) In connection with the deposit in the applicable Cash
Account of amounts drawn pursuant to any Downgrade Drawing under a
Liquidity Facility, the Subordination Agent agrees, so long as no Event of
Default shall have occurred and be continuing, to pay to the Lessee
promptly following each Regular Distribution Date any Investment Earnings
on the amount so deposited which remain after application of such
Investment Earnings pursuant to Section 2.06 of such Liquidity Facility to
the interest payable on such Downgrade Drawing under Section 3.07 of such
Liquidity Facility. Capitalized terms used in this Section shall have the
meanings specified in the Intercreditor Agreement.
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes. (a) Generally. The
Lessee agrees promptly to pay when due, and to indemnify and hold each
Indemnitee harmless from all license, recording, documentary, registration and
other fees and all taxes (including, without limitation, income, gross
receipts, sales, rental, use, value added, property (tangible and intangible),
ad valorem, excise and stamp taxes), fees, levies, imposts, recording duties,
duties, charges, assessments or withholdings of any nature whatsoever,
together with any assessments, penalties, fines, additions to tax or interest
thereon (individually, a "Tax," and collectively called "Taxes"), however
imposed or asserted (whether imposed upon any Indemnitee, the Lessee, all or
any part of the Aircraft, Airframe, any Engine or any Part or the Lessor's
Estate, the Trust Indenture Estate, Rent, the Certificates or otherwise upon
or with respect to any Operative Agreement, any payments thereunder or
otherwise in connection therewith), by any Federal, state or local government
or taxing authority in the United States, or by any government or taxing
authority of a foreign country or of any political subdivision or taxing
authority thereof or by a territory or possession of the United States or an
international taxing authority relating to or measured by:
(i) the construction, mortgaging, financing, refinancing, purchase,
acceptance, rejection, delivery, nondelivery, transport, location, ownership,
registration, reregistration, deregistration, insuring, assembly, possession,
repossession, operation, use, non-use, condition, maintenance, repair,
improvement, conversion, sale, return, abandonment, preparation, installation,
storage, redelivery, replacement, manufacture, leasing, subleasing,
sub-subleasing, modification, alteration, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application or
disposition of, or the imposition of any Lien (or the incurrence of any
liability to refund or pay over any amount as a result of any Lien) on, the
Aircraft, the Airframe, any Engine or any Part or any interest therein;
(ii) amounts payable under the Operative Agreements;
(iii) the Property, or the income or other proceeds received with
respect to the Property attributable to the transactions contemplated by
the Operative Agreements, held by the Owner Trustee under the Trust
Agreement or after an Event of Default under the Lease, or by the Indenture
Trustee under the Indenture;
(iv) otherwise with respect to any Operative Agreement, any
interest therein or by reason of the transactions described in or
contemplated by the Operative Agreements;
(v) the principal or interest or other amounts payable with respect
to the Certificates;
(vi) the Pass Through Certificates or the Certificates or the
issuance, sale, acquisition, reoptimization, or refinancing thereof or the
beneficial interests in the Trust Estate or the Trust Indenture Estate or
the creation thereof under the Trust Agreement or the Indenture, or the
security interest created or perfected thereby or by any filing thereof;
(vii) any assumption by the Lessee pursuant to Section 7.11 of this
Agreement and Section 2.12 of the Indenture;
(viii) the Aircraft, the Airframe, any Engine or any Part; or
(ix) the rentals (including Basic Rent, Renewal Rent and
Supplemental Rent), receipts or earnings arising from the Operative
Agreements.
(b) Exceptions. The indemnity provided for in Section 8.01(a) shall
not extend to any of the following:
(i) With respect to an Indemnitee, Taxes based upon, measured by or
with respect to the net or gross income, items of tax preference or minimum
tax or excess profits, receipts, value-added taxes, capital, franchise, net
worth (whether denominated income, excise, capital stock, or doing
business taxes) or other similarly-based taxes (other than sales, use,
transfer, rental, ad valorem, stamp, property, or similar taxes) ("Income
Taxes"), provided, however, that this clause (i) shall not exclude from the
indemnity described in Section 8.01(a) above any such Income Taxes to the
extent such taxes are imposed by any jurisdiction in which the Indemnitee
would not be subject to such taxes but for, or would be subject to such
taxes solely as a result of, (x) the operation, registration, location,
presence, or use of the Aircraft, Airframe, any Engine or any Part thereof,
in such jurisdiction or (y) the place of incorporation or principal office
or the activities of the Lessee or any sublessee in such jurisdiction (it
being understood that (A) any such indemnity would be payable only to the
extent of the net harm incurred by the Indemnitee from such Income Taxes,
taking into account any incremental current Tax benefit in another tax
jurisdiction resulting from payment of such Income Taxes and (B) this
sentence would require indemnification in a jurisdiction in which the
Indemnitee is already subject to an Income Tax (an "Existing Income Tax")
only if an event set forth in Clause (x) or (y) of this sentence causes the
Indemnitee to be subject to an Income Tax in that jurisdiction (a "New
Income Tax") other than an Existing Income Tax, and such New Income Tax
would have been imposed even if the activities contemplated by the
Operative Agreements were the Indemnitee's sole nexus to the jurisdiction);
provided, further, that the provisions of this paragraph (b)(i) relating to
Income Taxes shall not exclude from the indemnity described in Section
8.01(a) hereof any Income Taxes for which the Lessee would be required to
indemnify an Indemnitee (x) so that any payment under the Operative
Agreements, otherwise required to be made on an After-Tax Basis, is made on
an After-Tax Basis or (y) pursuant to the last sentence of Section 8.02,
8.05, 9.02 or 9.05 of this Agreement;
(ii) [Reserved];
(iii) Taxes imposed with respect to the Aircraft and arising out
of or measured by acts, omissions, events or periods (or any combination
of the foregoing) which occur after the later of (A) the payment in full
of all amounts payable by the Lessee pursuant to and in accordance with
the Operative Agreements, or the earlier discharge in full of the
Lessee's payment obligations under and in accordance with the Lease and
the Operative Agreements, and (B) the earliest of (x) the expiration of
the Term of the Lease and return of the Aircraft in accordance with
Article 12 of the Lease, (y) the termination of the Lease in accordance
with the applicable provisions of the Lease and return of the Aircraft
in accordance with the Lease, or (z) the termination of the Lease in
accordance with the applicable provisions of the Lease and the transfer
of all right, title and interest in the Aircraft to the Lessee pursuant
to its exercise of any of its purchase options set forth in Section
4.02(a) of the Lease, provided that this exclusion (iii) shall not apply
in respect of any payment made after the dates set forth in clauses (A)
and (B) above unless such payment is made with respect to any event or
circumstance occurring on, with or prior to such return or transfer or
period prior to such return or transfer, or Taxes incurred in connection
with the exercise of any remedies pursuant to Article 17 of the Lease
following the occurrence of an Event of Default;
(iv) As to the Owner Trustee, Taxes imposed against the Owner
Trustee upon or with respect to any fees for services rendered in its
capacity as Owner Trustee under the Trust Agreement or, as to the
Indenture Trustee, Taxes imposed against the Indenture Trustee upon or
with respect to any fees received by it for services rendered in its
capacity as Indenture Trustee under the Indenture;
(v) Taxes imposed on an Indemnitee that would not have been imposed
but for the willful misconduct or gross negligence of such Indemnitee
(other than gross negligence or willful misconduct not actually committed
by but instead imputed to such Indemnitee by reason of such Indemnitee's
participation in the transactions contemplated by the Operative Agreements)
or the breach by such Indemnitee of: (i) in the case of an Indemnitee other
than the Owner Participant, any representation, warranty or covenant
contained in the Operative Agreements or any document delivered in
connection therewith and (ii) in the case of the Owner Participant, the
representations or covenants in Sections 7.02(a), (c); 7.03(a)(i), (ii),
(iii), (iv), (vii), (ix); and 7.03(b), (c), (d), (e) of this Agreement (in
either case unless attributable to a breach of representation, warranty or
covenant of the Lessee);
(vi) Taxes imposed on, and not collected by withholding from
payments of Rent, the Owner Trustee or the Owner Participant or any
successor, assign or Affiliate thereof which became payable by reason of
any voluntary or involuntary transfer or disposition by such Indemnitee
subsequent to the Delivery Date, including revocation of the Trust, of any
interest in some or all of the Aircraft, Airframe, Engines or Parts thereof
or its interest in the Lessor's Estate (not including any transfers of any
Certificates pursuant to Section 15.01(a) hereof) or a disposition in
connection with a bankruptcy or similar proceedings involving either the
Lessor or the Owner Participant other than (A) transfers resulting from a
loss, substitution or modification of the Aircraft, Engines or any Part,
(B) any transfer of the Aircraft, Engines or any Part (in each case other
than at Fair Market Value) to the Lessee or other person in possession
thereof, (C) transfers attributable to an Event of Default or (D) a
transfer pursuant to the Lessee's exercise of its rights under Section
10.01 of the Lease; the parties agree to cooperate to minimize any such
Taxes covered by this provision;
(vii) Taxes imposed on the Owner Participant for which the Lessee is
obligated to indemnify the Owner Participant pursuant to the Tax Indemnity
Agreement;
(viii) Taxes imposed on a successor, assign or other transferee
of the Owner Participant or the Owner Trustee that is not a U.S. Person
or an Indemnitee as of the date hereof under the Operative Agreements
(including, without limitation, a transferee which is a new lending
office of an original Indemnitee) which on the Certificate Closing Date
is an Indemnitee (for purposes of this clause (viii), an "original
Indemnitee") or such original Indemnitee to the extent that such Taxes
exceed the amount of Taxes that would have been imposed and would have
been indemnifiable pursuant to Section 8.01(a) hereof had there not been
a succession, assignment or other transfer by such original Indemnitee
of any such interest of such Indemnitee in the Aircraft or any Part, any
interest in or under any Operative Agreement, or any proceeds thereunder
(it being understood that for purposes of determining the amount of
indemnification that would have been due to such original Indemnitee
with respect to a net income Tax, it shall be assumed that such original
Indemnitee would be subject to taxation on its income at the highest
marginal statutory rate applicable to it), provided, however, that the
exclusion provided by this clause (viii) shall not apply in the case of
a succession, transfer or disposition (A) that occurs after the Lease
has been declared in default or if such transfer or disposition is
pursuant to the exercise of remedies under Article 17 of the Lease, (B)
which is an actual or deemed transfer pursuant to Section 7.11 hereof or
as a consequence of a Refinancing under Section 15.01 hereof, or any
actual or deemed transfer of a Certificate that as part of a Refinancing
under Section 15.01 hereof is not retired, but only to the extent the
Taxes attributable to such transfer exceed the amount of Taxes that
would have been imposed on such transferor if the debt had instead been
retired, (C) to the extent necessary to make payments with respect to
such Taxes on an After-Tax Basis, (D) to the extent such Taxes are
directly attributable to the failure of the Lessee to take
administrative actions as have been reasonably requested of it in
writing in a timely manner and which will result in no after-tax cost or
expense to the Lessee or (E) in the case of the Owner Participant or the
Lessor, to any Tax other than an Income Tax;
(ix) [Reserved];
(x) Any Taxes which have been included in the Purchase Price and
which have been paid to the applicable taxing authorities;
(xi) Any Taxes which would not have been imposed but for a Lessor's
Lien or an Indenture Trustee's Lien; and
(xii) Any Taxes imposed on the Owner Participant arising under or in
connection with any prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975(c)(1) of the Code ("Prohibited Transaction");
provided, however, that in the event any prohibited transaction arises
which is not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually or
collectively, a "PTE") then the indemnity provided for herein shall extend
to any Taxes incurred by the Owner Participant (or any Affiliate thereof)
as the result of any Prohibited Transaction arising out of the purchase or
holding of any Loan Certificates by an employee benefit plan subject to
Title I of ERISA or by a plan subject to Section 4975 of the Code
(individually or collectively, an "ERISA Plan") with respect to which the
Owner Participant is a party in interest, within the meaning of Section
3(14) of ERISA, or a disqualified person,within the meaning of Section 4975
of the Code, except, however, that such Indemnity shall not extend to any
Taxes incurred by the Owner Participant (or any Affiliate thereof) as the
result of any Prohibited Transaction occurring with respect to the purchase
or holding of any Loan Certificates (A) over which purchase or holding the
Owner Participant (or an Affiliate thereof) has discretion or control
(other than in the capacity of a custodian, directed trustee or other
similar nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan sponsor"
within the meaning of Section 3(16)(B) of ERISA.
(c) Withholding. The Pass Through Trustee shall withhold any Taxes
required to be withheld on payments to any holder of a Pass Through
Certificate who is a Non-U.S. Person except to the extent that such a holder
of a Pass Through Certificate has furnished evidence to the Pass Through
Trustee sufficient under applicable law to entitle such holder of a Pass
Through Certificate to any exemption from or reduction in the rate of
withholding on interest claimed by such holder of a Pass Through Certificate.
The Indenture Trustee shall withhold any Taxes required to be withheld on any
payment to a Holder pursuant to Section 5.09 of the Indenture. If the
Indenture Trustee or the Pass Through Trustee fails to withhold a Tax required
to be withheld with respect to any Holder of a Certificate or any holder of a
Pass Through Certificate or any claim is otherwise asserted by a taxing
authority against the Owner Trustee or Owner Participant for any withholding
tax, the Lessee will indemnify the Owner Trustee and the Owner Participant
(without regard to the exclusions set forth in Section 8.01(b) hereof) on an
After-Tax Basis against any such Taxes required to be withheld and any
interest and penalties with respect thereto, along with any other costs
(including reasonable attorney's fees) incurred in connection with any such
claim. The Indenture Trustee or the Pass Through Trustee, as the case may be,
in its individual capacity (and without recourse to the Trust Indenture
Estate), shall indemnify the Lessee (without regard to the exclusions set
forth in Section 8.01(b) hereof) on an After-Tax Basis for any payment the
Lessee shall have made pursuant to the preceding sentence.
Section 8.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Tax indemnified against under Section 8.01
shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Tax not
been incurred, provided that the calculation of any additional amounts owing
to any Indemnitee as a result of the Lessee's obligation to indemnify on an
After-Tax Basis shall be made without regard to the exclusions set forth in
Section 8.01(b). If any Indemnitee actually realizes a tax benefit by
reason of the payment of any Tax paid or indemnified against by the Lessee,
such Indemnitee shall promptly pay to the Lessee, to the extent such tax
benefit was not previously taken into account in computing such payment,
but not before the Lessee shall have made all payments then due to such
Indemnitee under this Agreement, the Tax Indemnity Agreement and any other
Operative Agreement, an amount equal to the lesser of (x) the sum of such
tax benefit plus any other tax benefit actually realized by such Indemnitee
that would not have been realized but for any payment made by such
Indemnitee pursuant to this sentence and not already paid to the Lessee,
and (y) the amount of the payment made under Section 8.01 hereof and this
Section 8.02 by the Lessee to such Indemnitee plus the amount of any other
payments by the Lessee to such Indemnitee theretofore required to be made
under this Section 8.02 and Sections 8.01 and 8.05 hereof (and the excess,
if any, of the amount described in clause (x) above over the amount
described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments
to such Indemnitee pursuant to Section 8.01 hereof); provided, however,
that notwithstanding the foregoing portions of this sentence, such
Indemnitee shall not be obligated to make any payment to the Lessee
pursuant to this sentence as long as an Event of Default shall have
occurred and be continuing under the Lease. The Lessee shall reimburse on
an After-Tax Basis such Indemnitee (and without regard to Section 8.01(b)
hereof, except for clause (v) thereof) for any payment of a tax benefit
pursuant to the preceding sentence (or a tax benefit otherwise taken into
account in calculating the Lessee's indemnity obligation hereunder) to the
extent that such tax benefit is subsequently disallowed or reduced
(including the expiration of any tax credit carryovers or carrybacks of
such Indemnitee that would not otherwise have expired).
Section 8.03. Time of Payment. Any amount payable to an Indemnitee
pursuant to this Article 8 shall be paid promptly, but in any event within 30
days after receipt of a written demand therefor from such Indemnitee
accompanied by a written statement describing in reasonable detail the basis
for such indemnity and the computation of the amount so payable, provided that
in the case of amounts which are being contested by the Lessee in good faith
or by the Indemnitee in either case pursuant to Section 8.04 hereof, such
amount shall be payable within 30 days after the time such contest is finally
resolved.
Section 8.04. Contests. If a written claim is made against any
Indemnitee for Taxes with respect to which the Lessee is liable for a payment
or indemnity hereunder, such Indemnitee shall promptly (but in any event
within 30 days of receipt thereof) give the Lessee notice in writing of such
claim and shall furnish the Lessee with copies of any written requests for
information sent to such Indemnitee (and not the Lessee) from any taxing
authority to the extent relating to such Taxes with respect to which the
Lessee may be required to indemnify hereunder and with respect to which it
would be necessary or beneficial to have information provided by the Lessee;
provided, however, that the failure of an Indemnitee to give such notice or
furnish such copy shall not terminate any of the rights of such Indemnitee
under this Article 8, except to the extent that the Lessee's contest rights
have been materially and adversely impaired by the failure to provide such
notice or copy. The Lessee may, at its option, contest in its own name or, if
required by law, require the Indemnitee to contest in good faith, with due
diligence and at the Lessee's expense, if timely requested in writing by the
Lessee, the validity, applicability or amount of such Taxes by:
(i) resisting payment thereof if lawful and practicable or not
paying the same except under protest if protest is necessary and proper in
each case so long as non-payment will not result in a material risk of the
sale, forfeiture or loss of, or the creation of a Lien other than a
Lessor's Lien on the Aircraft, Airframe or any Engine or any risk of
criminal liability; or
(ii) if the payment be made, using reasonable efforts to obtain a
refund thereof in appropriate administrative and judicial proceedings.
Notwithstanding the foregoing, the Lessee shall not be permitted or entitled
to contest any such Tax in its own name unless the Tax is reflected in a
report or a return of the Lessee or raised in an audit or other proceeding of
the Lessee and the Lessee is allowed to directly contest such Tax under
applicable law of the taxing jurisdiction provided, that if the Lessee is so
permitted under applicable law to contest a Tax asserted against the Lessee
and the same or similar Tax is also asserted against the Indemnitee, each of
the Lessee and such Indemnitee shall conduct its contest in its own name and
the Lessee and such Indemnitee will cooperate in a reasonable manner with
respect to the respective contests of such Tax.
If the Indemnitee, after reasonable discussion with the Lessee and
consideration in good faith of any suggestion made by the Lessee as to the
method of pursuing such contest, elects to conduct the contest, such
Indemnitee shall control the contest and shall determine the manner in which
to contest such Taxes and shall periodically or upon the Lessee's request
advise the Lessee of the progress of such contest; provided, however, that the
Lessee shall have the right to be consulted in good faith with respect to any
contest of claims subject to indemnification hereunder, including governmental
and judicial conferences and the right to be consulted in good faith regarding
the relevant portions of all related submissions to any governmental or other
authority, provided, however, that the Lessee shall be permitted to
participate in any such contest only (x) with respect to issues that can be
separated on audit from any Taxes for which the Lessee is not required to
indemnify the Indemnitee hereunder, and (y) if the Indemnitee shall have
determined that in its judgment, exercised in its sole discretion, neither
such participation nor the separation of issues will adversely affect the
Indemnitee. The Indemnitee will not settle a contest that results in a final
determination without consent of the Lessee, unless the Indemnitee waives its
right to indemnification with respect to such contest and any related contest.
Notwithstanding the preceding sentences of this Section 8.04, such Indemnitee
shall not be required to take or continue any action unless the Lessee shall
have (i) agreed in writing to pay and shall pay the Indemnitee on a current
basis and on an After-Tax Basis the after-tax cost of all reasonable fees and
expenses (including reasonable attorneys' fees and accountants' fees) which
such Indemnitee may incur as a result of contesting such Taxes, (ii) made all
payments and indemnities (other than contested payments and indemnities) then
due to the Indemnitee hereunder or with respect to any of the transactions
contemplated by or under the Operative Agreements and (iii) acknowledged in
writing the Lessee's obligation to such Indemnitee pursuant to this Agreement
to the extent that the contest is not successful, unless it is reasonably
clear from the resolution of the contest that an exclusion set forth in
Section 8.01(b) hereof applies. In no event shall such Indemnitee be required
or the Lessee be permitted to contest pursuant to this Section 8.04 the
imposition of any Tax for which the Lessee is obligated to indemnify any
Indemnitee hereunder unless (i) such Indemnitee shall have received, at the
Lessee's expense, an opinion of its tax counsel, such counsel to be reasonably
satisfactory to the Lessee ("Tax Counsel"), to the effect that there exists a
reasonable basis for contesting such claim, (ii) such Indemnitee (and, if such
Indemnitee is not the Owner Participant, the Owner Participant and such
Indemnitee) shall have determined that such contest will not result in any
material risk of loss, sale or forfeiture of, or the creation of a Lien (other
than Lessor's Liens) on, the Aircraft or any part thereof or interest thereon
or in a risk of criminal liability, or adversely affect the Trust Indenture
Estate, (iii) if a Payment Default, Bankruptcy Default or an Event of Default
shall have occurred and be continuing, the Lessee shall have provided security
for its obligations hereunder reasonably satisfactory to the Indemnitee, (iv)
if such contest shall be conducted in a manner requiring payment of the claim
in advance, the Lessee shall have advanced sufficient funds, on an interest
free basis, to make the payment required, and agreed to indemnify the
Indemnitee against any additional net adverse tax consequences on an After-Tax
Basis to such Indemnitee of such advance, (v) the issue shall not be the same
as an issue previously contested hereunder and decided adversely, unless the
Indemnitee shall have received at the Lessee's sole expense, a written
opinion, in form and substance reasonably satisfactory to such Indemnitee, of
Tax Counsel to the effect that the applicable circumstances or law has changed
and that in light thereof, there is substantial authority for contesting such
claim and (vi) the amount of the indemnity payments the Lessee would be
required to make with respect to such adjustment, when aggregated with similar
adjustments that could be raised in other taxable years of such Indemnitee
exceeds $50,000; provided, that in the event that such Indemnitee is not
required under this paragraph to contest any Tax liability for which the
Lessee is obligated to indemnify any Indemnitee, the Lessee may contest such
Tax liability in the name of the Lessee, if permitted by law. The Lessee may
appeal or require the Indemnitee to appeal any judicial decision provided the
foregoing requirements of this Section 8.04 are met and the Indemnitee shall
have received, at the Lessee's expense, an opinion of Tax Counsel, to the
effect that there is substantial authority for such appeal.
Nothing contained in this Section 8.04 shall require any
Indemnitee to contest or continue to contest, or permit Lessee to contest,
a claim which such Indemnitee would otherwise be required to contest
pursuant to this Section 8.04, if such Indemnitee shall waive payment by
Lessee of any amount that might otherwise be payable by Lessee under this
Article 8 in connection with such claim.
Section 8.05. Refunds. Upon receipt by an Indemnitee of a refund of
all or any part of any Taxes which the Lessee shall have paid for such
Indemnitee or for which the Lessee shall have reimbursed or indemnified such
Indemnitee, and provided there shall not have occurred and be continuing any
Payment Default, Bankruptcy Default or Event of Default by the Lessee
hereunder or under the Lease (in which case payment shall not be made to the
Lessee until such Payment Default, Bankruptcy Default or Event of Default
shall have been cured), such Indemnitee shall pay to the Lessee an amount
equal to the amount of such refund less (x) any expenses not previously
reimbursed, (y) all payments then due to such Indemnitee under this Article
8 and (z) Taxes imposed with respect to the accrual or receipt thereof,
including interest received attributable thereto, plus any tax benefit
actually realized by such Indemnitee as a result of any payment by such
Indemnitee made pursuant to this sentence; provided, however, that such amount
shall not be payable (a) before such time as the Lessee shall have made all
payments or indemnities then due and payable to such Indemnitee under this
Article 8 and (b) to the extent that the amount of such payment would exceed
(i) the amount of all prior payments by the Lessee to such Indemnitee pursuant
to this Article 8 less (ii) the amount of all prior payments by such
Indemnitee to the Lessee pursuant to this Article 8.
Any subsequent loss of such refund or tax benefit shall be treated as
a Tax subject to indemnification under the provisions of this Article 8 (in
the case of any such tax benefit, without regard to Section 8.01(b) hereof).
Section 8.06. Lessee's Reports. In case any report or return is
required to be made with respect to any Taxes against which the Lessee is or
may be obligated to indemnify the Indemnitees under this Article 8, the Lessee
shall make such report or return, except for any such report or return that
the Indemnitee has notified the Lessee that it intends to file, in such manner
as will show the ownership of the Aircraft in the Owner Trustee and shall send
a copy of the applicable portions of such report or return to the Indemnitee
and the Owner Trustee or will notify the Indemnitee of such requirement and
make such report or return in such manner as shall be satisfactory to such
Indemnitee and the Owner Trustee. The Lessee will provide such information
reasonably available to the Lessee as the Indemnitee may reasonably require
from the Lessee to enable the Indemnitee to fulfill its tax filing
requirements with respect to the transactions contemplated by the Operative
Agreements (without duplication of the requirements of Section 3 of the Tax
Indemnity Agreement) and any audit information request arising from any such
filing. The Indemnitee will provide such information reasonably available to
it as the Lessee may reasonably require from such Indemnitee to enable the
Lessee to fulfill its tax filing requirements with respect to the transactions
contemplated by the Operative Agreements and any audit information request
arising from such filing; provided that in no event shall any Indemnitee be
required to provide copies of any of its tax returns or other confidential
information. The Lessee shall hold the Indemnitee harmless on an After-Tax
Basis from and against any liabilities, including penalties, additions to tax,
fines and interest, imposed upon or incurred by such Indemnitee to the extent
directly attributable to any insufficiency or inaccuracy in any return,
statement, or report prepared by the Lessee or information supplied by the
Lessee, or directly attributable to the Lessee's failure to supply reasonably
available information to such Indemnitee as required by this Section 8.06.
Section 8.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 8 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of the Operative Agreements.
Section 8.08. Payment of Taxes. With respect to any Tax otherwise
indemnifiable hereunder by the Lessee and applicable to the Aircraft,
Airframe, any Engine or Parts, to the extent permitted by the applicable
federal, state, local or foreign law, the Lessee shall pay such tax directly
to the relevant Taxing authority and file any returns or reports required with
respect thereto to the extent legally entitled to do so in its own name;
provided, however, that the Lessee shall not make any statements or take any
action which would indicate that the Lessee or any Person other than the Owner
Trustee or Owner Participant is the owner of the Aircraft, the Airframe, any
Engine or any Part or which would otherwise be inconsistent with the terms of
the Lease or the Tax Indemnity Agreement and the position thereunder of the
Owner Trustee and the Owner Participant. Copies of such returns or reports,
together with evidence of payment of any tax due, shall be sent by the Lessee
to the Owner Participant within thirty (30) days after the date of each
payment by the Lessee of any Tax.
Section 8.09. Reimbursements by Indemnitees Generally. To the
extent the Lessee is required to pay or withhold any Tax imposed on or with
respect to an Indemnitee in respect of the transactions contemplated by the
Operative Agreements, which Tax is not otherwise the responsibility of the
Lessee under the Operative Agreements, or any other written agreements between
the Lessee and such Indemnitee, then such Indemnitee shall pay to the Lessee
within 30 days of the Lessee's demand therefor an amount which equals the
amount actually paid by the Lessee with respect to such Taxes.
Section 8.10. Special Indemnity. Notwithstanding anything in this
Article 8 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally. (a) The Lessee agrees to indemnify each
Indemnitee against and agrees to protect, defend, save and keep harmless each
Indemnitee from any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, disbursements and expenses
(including legal fees and expenses and all costs and expenses relating to
amendments, supplements, adjustments, consents, refinancings and waivers under
the Operative Agreements except as otherwise provided in Section 10.01(c)(i)
or Article 15 hereof) of every kind and nature, including without limitation
Make-Whole Premium (unless excluded pursuant to Section 3.03 of the Lease)
(whether or not any of the transactions contemplated by this Agreement are
consummated) (individually, an "Expense," collectively, "Expenses"), which
may be imposed on, incurred or suffered by or asserted against any Indemnitee,
in any way relating to, based on or arising out of:
(i) this Agreement (including, without limitation, the execution,
delivery and performance hereof by the Owner Participant prior to the
delivery of the Aircraft), the Lease, the Indenture, the Trust Agreement,
the Intercreditor Agreement, the Liquidity Facilities, the Pass Through
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale or any
other Operative Agreement or any other document entered into in connection
herewith or any sublease or transfer or any transactions contemplated
hereby or thereby;
(ii) the operation, possession, use, non-use, maintenance, storage,
overhaul, delivery, non-delivery, control, repair or testing of the
Aircraft, Airframe, or any Engine or any engine used in connection with the
Airframe, or any part thereof by the Lessee, any sublessee or any other
Person whatsoever, whether or not such operation, possession, use, non-use,
maintenance, storage, overhaul, delivery, non-delivery, control, repair or
testing is in compliance with the terms of the Lease, including without
limitation, claims for death, personal injury or property damage or other
loss or harm to any Person whatsoever, including, without limitation, any
passengers, shippers or other Persons wherever located, and claims relating
to any laws, rules or regulations, including, without limitation,
environmental control, noise and pollution laws, rules or regulation;
(iii) the manufacture, design, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration, import,
export, performance, non-performance, lease, sublease, transfer,
merchantability, fitness for use, alteration, substitution or replacement
of any Airframe, Engine, or Part under the Lease, the Purchase Agreement,
the Purchase Agreement Assignment, the GTA or the Engine Warranty
Assignment or other transfer of use or possession, or other disposition of
the Aircraft, the Airframe, any Engine or any Part including, without
limitation, latent and other defects, whether or not discoverable, strict
tort liability, and any claims for patent, trademark or copyright
infringement;
(iv) any breach of or failure to perform or observe, or any other
non-compliance with, any condition, covenant or agreement to be performed,
or other obligations of the Lessee under any of the Operative Agreements,
or the falsity or inaccuracy of any representation or warranty of the
Lessee in any of the Operative Agreements (other than representations and
warranties in the Tax Indemnity Agreement);
(v) the Collateral Account and the Liquid Collateral;
(vi) the enforcement of the terms of the Operative Agreements and
the administration of the Trust Indenture Estate; and
(vii) the offer, issuance, sale or delivery of any Certificate or any
Pass Through Certificate, or any refunding or refinancing thereof, or
interest in the Lessor's Estate or the Trust Agreement or any similar
interest or in any way relating to or arising out of the Trust Agreement
and the Lessor's Estate, the Indenture or the Trust Indenture Estate
(including, without limitation, any claim arising out of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, or
any other federal or state statute, law or regulation, or at common law or
otherwise relating to securities), or the action or inaction of the Owner
Trustee or Indenture Trustee as trustees, in the manner contemplated by
this Agreement, the Indenture, the Indenture and Security Agreement
Supplement or the Trust Agreement and in the case of the Owner Participant,
its obligations arising under Section 6.01 of the Trust Agreement.
The foregoing indemnity by the Lessee is intended to include and cover, but is
not limited to, any Expense to which the Indemnitees may be subject as a
result of their respective ownership or leasing of any interest in or holding
of any Lien on the Aircraft, Airframe, any Engine or Part during the Term,
whether or not in the Lessee's possession or control, insofar as such Expense
relates to any activity or event whatsoever involving such item while it is
under lease to the Lessee (or after termination of the Lease in connection
with the exercise of remedies thereunder to the extent that such Expense is
attributable to the transactions contemplated hereby and by the other
Operative Agreements), and such Expense does not fall within any of the
exceptions listed in Section 9.01(b) hereof.
(b) Exceptions. The indemnity provided for in Section 9.01(a) shall
not extend to any Expense of any Indemnitee to the extent it:
(i) would not have occurred but for the willful misconduct or gross
negligence of such Indemnitee;
(ii) after the Delivery Date, is in respect of the Aircraft, and is
attributable to acts or events which occur after the Aircraft is no longer
part of the Lessor's Estate or, if the Aircraft remains a part of the
Lessor's Estate, after the expiration of the Term (unless the Aircraft is
being returned at such time, in which case after return of physical
possession; provided that if the Lease has been terminated pursuant to
Article 17 thereof, the indemnity provided in Section 9.01(a) hereof shall
survive for so long as Lessor or the Indenture Trustee shall be exercising
remedies under such Article 17), or to acts or events which occur after
return of possession of the Aircraft by the Lessee in accordance with the
provisions of the Lease (subject to the foregoing proviso if the Lessor has
terminated the Lease pursuant to Article 17 of the Lease) but in any such
case only to the extent not fairly attributable to acts or omissions of the
Lessee prior to expiration of the Term, including without limitation the
Lessee's failure to fully discharge all of its obligations under the Lease
or the other Operative Agreements;
(iii) is a Tax, whether or not the Lessee is required to indemnify
therefor pursuant to Article 8 hereof or pursuant to the Tax Indemnity
Agreement;
(iv) is a cost or expense required to be paid by the Owner
Participant or its permitted transferees (and not by the Lessee) pursuant
to this Agreement or any other Operative Agreement and for which the Lessee
is not otherwise obligated to reimburse the Owner Participant, directly or
indirectly pursuant to the terms of this Agreement or such other Operative
Agreement;
(v) would not have been incurred by such Indemnitee if such
Indemnitee had not been in breach of its representations or warranties, or
had not defaulted in the observance and performance of the terms and
provisions required to be observed and performed by it, in this Agreement,
the Purchase Agreement Assignment, the Lease, the Indenture, the Trust
Agreement or any other Operative Agreement to which it is a party unless
such breach or default shall be a result of the breach or default by the
Lessee of any of its obligations under the Operative Agreements or by
another Indemnitee of any of the foregoing;
(vi) [reserved];
(vii) is, in the case of the Owner Participant, Lessor's Liens to the
extent attributable to the Owner Participant; in the case of the Owner
Trustee, Lessor's Liens to the extent attributable to the Owner Trustee; in
the case of SSB, Lessor's Liens to the extent attributable to SSB; and in
the case of the Indenture Trustee, Indenture Trustee's Liens;
(viii) is, in the case of the Owner Participant or the Owner Trustee,
attributable to the offer or sale by such Indemnitee after the Certificate
Closing Date of any interest in the Aircraft, the Lessor's Estate or the
Trust Agreement or any similar interest (including an offer or sale
resulting from bankruptcy or other proceedings for the relief of debtors in
which such Indemnitee is the debtor), unless in each case such offer or
sale shall occur (x) in connection with a Refinancing, (y) as a result of
the occurrence of an Event of Default provided that either the Lease has
been declared in default or the transfer is pursuant to the exercise of
remedies under Article 17 of the Lease or (z) in connection with the
Lessee's exercise of its early termination option under Article 10 of the
Lease or its purchase options under Article 4 of the Lease or in connection
with Article 11 of the Lease;
(ix) is an Expense arising under or in connection with any
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code ("Prohibited Transaction"); provided,
however, that in the event any prohibited transaction arises which is
not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually
or collectively, a "PTE") then the indemnity provided for herein shall
extend to any Expenses incurred by the Owner Participant (or any
Affiliate thereof) as the result of any Prohibited Transaction arising
out of the purchase or holding of any Certificates by an employee
benefit plan subject to Title I of ERISA or by a plan subject to Section
4975 of the Code (individually or collectively, an "ERISA Plan") with
respect to which the Owner Participant is a party in interest, within
the meaning of Section 3(14) of ERISA, or a disqualified person,within
the meaning of Section 4975 of the Code, except, however, that such
Indemnity shall not extend to any Expenses incurred by the Owner
Participant (or any Affiliate thereof) as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Certificates (A) over which purchase or holding the Owner Participant
(or an Affiliate thereof) has discretion or control (other than in the
capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA.
Section 9.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Expense indemnified against under Section
9.01 shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Expense not
been incurred. If any Indemnitee actually realizes a permanent Tax benefit by
reason of the payment of such Expense paid or indemnified against by the
Lessee which was not considered in the computation thereof, such Indemnitee
shall promptly pay to the Lessee, but not before the Lessee shall have made
all payments theretofore due such Indemnitee under this Agreement, the Tax
Indemnity Agreement and any other Operative Agreement, an amount equal to the
lesser of (x) the sum of such Tax benefit plus any other permanent Tax benefit
actually realized by such Indemnitee as the result of any payment made by such
Indemnitee pursuant to this sentence and (y) the amount of such payment
pursuant to this Section 9.02 by the Lessee to such Indemnitee plus the amount
of any other payments by the Lessee to such Indemnitee theretofore made
pursuant to this Section 9.02 less the amount of any payments by such
Indemnitee to the Lessee theretofore made pursuant to this Section 9.02 (and
the excess, if any, of the amount described in clause (x) above over the
amount described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments to
such Indemnitee pursuant to this Section 9.02), it being intended that no
Indemnitee should realize a net Tax benefit pursuant to this Section 9.02
unless the Lessee shall first have been made whole for any payments by it to
such Indemnitee pursuant to this Section 9.02; provided, however, that
notwithstanding the foregoing portions of this sentence, such Indemnitee shall
not be obligated to make any payment to the Lessee pursuant to this sentence
so long as an Event of Default shall have occurred and be continuing. Any
Taxes that are imposed on any Indemnitee as a result of the disallowance or
reduction of such Tax benefit referred to in the next preceding sentence in a
taxable year subsequent to the year of allowance and utilization by such
Indemnitee (including the expiration of any tax credit carryovers or
carrybacks of such Indemnitee that would not otherwise have expired) shall be
indemnifiable pursuant to the provisions of Section 8.01 hereof without regard
to Section 8.01(b) hereof.
Section 9.03. Subrogation. Upon the payment in full of any
indemnity pursuant to this Article 9 by the Lessee (but not earlier), the
Lessee shall be subrogated to any right of the Indemnitee, other than with
respect to any of such Indemnitee's insurance policies or in connection
with any indemnity claim the Person indemnified may have against any other
Indemnitee in respect of the matter against which such indemnity has been
made.
Section 9.04. Notice and Payment. Each Indemnitee and the Lessee
shall give prompt written notice one to the other of any liability of which
such party has received notice for which the Lessee is, or may be, liable
under this Article 9; provided, however, that failure to give such notice
shall not terminate any of the rights of the Indemnitees under this Article 9,
except (with respect to such Indemnitee) to the extent that the Lessee has
been materially prejudiced by the failure to provide such notice. Unless
otherwise provided in the Operative Agreements, any amount payable to an
Indemnitee pursuant to this Article 9 shall be paid within 30 days after
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the basis for such indemnity
and the computation of the amount so payable.
Section 9.05. Refunds. If any Indemnitee shall obtain a recovery of
all or any part of any amount which the Lessee shall have paid to such
Indemnitee or for which the Lessee shall have reimbursed such Indemnitee under
this Article 9, and provided there shall not have occurred a Payment Default
or an Event of Default (in which case payment shall not be made to the Lessee
until such Payment Default or Event of Default shall have been cured) such
Indemnitee shall pay to the Lessee the amount of any such recovery, including
interest received with respect to the recovery, net of any Taxes paid or
payable as a result of the receipt of the recovery and interest, plus any net
additional permanent income tax benefits actually realized by Indemnitee as
the result of any payment made pursuant to this sentence less any reasonable
costs and expense of any Indemnitee not reimbursed by the Lessee; provided,
however, that such amount shall not be payable (a) before such time as the
Lessee shall have made all payments or indemnities then due and payable to
such Indemnitee under this Article 9 or (b) to the extent that the amount of
such payment would exceed the amount of all prior payments by the Lessee to
such Indemnitee pursuant to this Article 9, less the amount of all prior
payments by such Indemnitee to the Lessee pursuant to this Article 9. Any
subsequent loss of such recovery or tax benefit shall be subject to
indemnification under Article 8 or this Article 9, as the case may be, but
without regard to Section 8.01(b) hereof, other than Section 8.01(b)(v)
hereof.
Section 9.06. Defense of Claims. The Lessee or its insurers shall
have the right (in each such case at the Lessee's sole expense) to investigate
or, provided that (i) the Lessee or its insurers shall not reserve the right
to dispute liability with respect to any insurance policies pursuant to which
coverage is sought, (ii) in the case of the Lessee, no Payment Default or
Event of Default shall have occurred and be continuing or shall arise at any
time during the claim and (iii) the Lessee shall have first acknowledged in
writing to such Indemnitee the Lessee's obligation to indemnify such
Indemnitee hereunder in respect of such claim, defend any such claim
covered by insurance for which indemnification is sought pursuant to this
Article 9 and each Indemnitee shall cooperate with the Lessee or its
insurers with respect thereto, and provided, further, the Lessee shall not
be entitled to assume and control the defense of any such claim if and to
the extent (A) such Indemnitee reasonably objects to such control on the
ground that an actual or potential material conflict of interest exists
where it is advisable for such Indemnitee to be represented by separate
counsel or on the grounds that such proceeding involves the potential
imposition of criminal liability on such Indemnitee or (B) such proceeding
will involve any material danger of the sale, forfeiture or loss of, or the
creation of any Lien on the Aircraft or the Trust Estate (unless the Lessee
posts a bond or other security reasonably acceptable in form and substance
to such Indemnitee) or involve any material risk of civil liability to such
Indemnitee for which it is not indemnified hereunder. Subject to the
immediately foregoing sentence, where the Lessee or the insurers under a
policy of insurance maintained by the Lessee undertake the defense of an
Indemnitee with respect to such a claim, no additional legal fees or
expenses of such Indemnitee in connection with the defense of such claim
shall be indemnified hereunder unless the fees or expenses were incurred at
the written request of the Lessee or such insurers. Subject to the
requirement of any policy of insurance applicable to a claim, an Indemnitee
may participate at its own expense at any judicial proceeding controlled by
the Lessee or its insurers pursuant to the preceding provisions, to the
extent that such party's participation does not, in the opinion of the
independent counsel appointed by the Lessee or its insurers to conduct such
proceedings, interfere with such control; and such participation shall not
constitute a waiver of the indemnification provided in this Section 9.06.
No Indemnitee shall enter into any settlement or other compromise with
respect to any claim described in this Section 9.06 without the prior
written consent of the Lessee, which consent shall not unreasonably be
withheld or delayed, unless such Indemnitee waives its right to be
indemnified under this Article 9 with respect to such claim. The Lessee
shall not enter into any settlement or compromise which the Lessee has not
agreed to discharge or with respect to which the Lessee has not agreed to
indemnify such Indemnitee to such Indemnitee's satisfaction or which admits
any criminal violation, gross negligence or willful misconduct on the part
of any Indemnitee without the prior written consent of such Indemnitee.
Section 9.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 9 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of this Agreement, the Tax Indemnity
Agreement, the Trust Agreement, the Indenture, the Purchase Agreement
Assignment, the Engine Warranty Assignment, the Lease and the other Operative
Agreements but, as to such indemnities after the expiration or other
termination of the Lease, only with respect to losses, liabilities,
obligations, damages, penalties, claims, actions, suits, costs, Expenses and
disbursements caused by events occurring or existing (or fairly attributable
to the Lessee's acts or omissions) prior to such termination or expiration or
incurred in the process of (i) the return or disposition of the Aircraft under
Article 12 or Article 17 of the Lease, or (ii) the termination of the Lease or
the Indenture or, if later, the return of the Aircraft.
Section 9.08. Effect of Other Indemnities. The Lessee's obligations
under the indemnities provided for in this Agreement shall be those of a
primary obligor whether or not the Person indemnified shall also be
indemnified with respect to the same matter under the terms of this Agreement,
the Lease, the Indenture, the Trust Agreement, or any other document or
instrument, and the Person seeking indemnification from the Lessee pursuant to
any provision of this Agreement may proceed directly against the Lessee
without first seeking to enforce any other right of indemnification.
Section 9.09. Interest. The Lessee will pay to each Indemnitee on
demand, to the extent permitted by applicable law, interest on any amount of
indemnity not paid when due pursuant to this Article 9 until the same shall be
paid, at the Past Due Rate.
Section 9.10. Special Indemnity. Notwithstanding anything in this
Article 9 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs. (a) Transaction
Costs. The Owner Participant shall pay (or reimburse the Lessee if the Lessee
shall have previously made such payment) all fees and expenses of the
following persons relating to the public offering of the Pass Through
Certificates contemplated by the Underwriting Agreement and related to the
transactions contemplated hereby on the Certificate Closing Date and the
Delivery Date: (i) the fees and expenses of counsel for the Owner Participant;
(ii) the fees and expenses of the transaction documentation counsel for the
Lessee and counsel for the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee, each Liquidity Provider and the
Underwriters (other than those fees, expenses and disbursements payable by the
Underwriters pursuant to the Underwriting Agreement); (iii) the fees and
expenses of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇; (iv) any initial fees and expenses
of the Pass Through Trustee and each Liquidity Provider and the fees and
expenses of the Owner Trustee, the Subordination Agent and the Indenture
Trustee; (v) any compensation, commissions and discounts payable to the
Underwriters pursuant to the Underwriting Agreement; (vi) the fees, if any,
incurred in printing the Pass Through Certificates; (vii) the fees and
expenses incurred in connection with printing any amendment to the
Registration Statement on Form S-3 bearing Registration No. 333-07691,
printing any Preliminary Prospectus or Prospectus (as such terms are defined
in the Underwriting Agreement) for the offering of the Pass Through
Certificates; (viii) the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP; (ix) the
fees and expenses of ▇▇▇▇▇'▇ and S&P; (x) the fees and expenses (including
computer time-sharing charges) of First Chicago Leasing Corporation; (xi) the
reasonable out-of-pocket expenses of the Owner Participant, including, without
limitation, any amounts paid in connection with any appraisal report prepared
on behalf of the Owner Participant; (xii) reimbursement to the Owner
Participant, the Owner Participant Guarantor, the Owner Trustee, the Indenture
Trustee, the Subordination Agent, each Liquidity Provider and the Pass Through
Trustee for any and all fees, expenses and disbursements of the character
referred to above or otherwise incurred in connection with the negotiation,
preparation, execution and delivery, filing and recording of the Operative
Agreements and the documents contemplated thereby, including, without
limitation, travel expenses and disbursements which shall have been paid by
such party; (xiii) printing and duplicating expenses and all fees, taxes and
other charges payable in connection with the recording or filing on or
before the Delivery Date of the instruments described in this Agreement;
(xiv) initial fees, initial expenses, initial disbursements and the initial
costs of distributing the Certificates (but not the continuing fees,
expenses, disbursements and costs of distribution) of SSB, as lessor under
the Lease and as Owner Trustee under the Trust Agreement and with respect
to the administration of the Lease and the Lessor's Estate, of the
Indenture Trustee as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate and of the Subordination Agent
acting under the Intercreditor Agreement; and (xv) any other amounts
approved by the Lessee and the Owner Participant. The fees and expenses
described in clauses (ii) through (x) of this paragraph shall be allocable
to the Owner Participant under this Agreement (1) to the extent incurred
specifically with respect to the Owner Participant, and (2) to the extent
such fees and expenses are incurred but are not specifically attributable
to the Owner Participant, in the proportion that the principal amount of
the Certificates bears to the total amount of the Pass Through
Certificates.
The Owner Participant, the Owner Trustee and the Lessee acknowledge
that the percentages for Basic Rent, Stipulated Loss Value and Termination
Value set forth in the Lease have been prepared assuming the aggregate amount
payable by the Owner Participant pursuant to the preceding paragraph is 1.15%
of the Purchase Price (the "Estimated Expense Amount"). Transaction Costs
shall be paid in the manner provided in Section 3.04 hereof.
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of the entity
acting as Owner Trustee, as lessor under the Lease and as Owner Trustee under
the Trust Agreement with respect to the administration of the Lease and the
Lessor's Estate and the continuing fees, expenses and disbursements (including
reasonable counsel fees and expenses and initial fees relating to the
establishment of any replacement trustee) of the Indenture Trustee, as trustee
under the Indenture with respect to the administration of the Trust Indenture
Estate, the continuing fees, expenses and disbursements (including reasonable
counsel fees and initial fees relating to the establishment of a replacement
trustee) of the Pass Through Trustee and the Subordination Agent and the
continuing fees, expenses and disbursements (including reasonable counsel fees
and initial fees relating to the establishment of a replacement liquidity
provider) of the Liquidity Providers under each Liquidity Facility shall be
paid as Supplemental Rent by the Lessee, including without limitation any
amounts payable to the Indenture Trustee or on account of requests by the
Indenture Trustee for indemnification under Article XI of the Indenture.
(c) Amendments, Supplements and Appraisal. Without limitation of
the foregoing, the Lessee agrees:
(i) to pay as Supplemental Rent to the Owner Trustee, the Owner
Participant, Owner Participant Guaranty, the Indenture Trustee, the
Subordination Agent, the Liquidity Providers and the Pass Through Trustee
all costs and expenses (including reasonable legal fees and expenses)
incurred by any of them in connection with (a) any Default or Event of
Default and any enforcement or collection proceedings resulting therefrom,
or (b) the enforcement of the obligations of the Lessee hereunder or under
the other Operative Agreements, including, without limitation, the entering
into or giving or withholding of any amendments or supplements or waivers
or consents (whether or not consummated), including without limitation, any
amendment, supplement, waiver or consent resulting from any work-out,
restructuring or similar proceeding relating to the performance or
nonperformance by the Lessee of its obligations under the Operative
Agreements or (c) any amendment, supplement, waiver or consent (whether or
not entered into) under this Agreement, the Lease, the Indenture, the
Certificates, the Tax Indemnity Agreement, the Purchase Agreement
Assignment or any other Operative Agreement or document or instrument
delivered pursuant to any of them, which amendment, supplement, waiver or
consent is required by any provision of any Operative Agreement (including
any adjustment pursuant to Section 3.04 of the Lease) or is requested by
the Lessee or necessitated by the action or inaction of the Lessee;
provided, however, that the Lessee shall not be responsible for fees and
expenses incurred in connection with the offer, sale or other transfer
(whether pursuant to Section 7.03(d) hereof or otherwise) by the Owner
Participant after the Certificate Closing Date of any interest in the
Aircraft, the Lessor's Estate, the Beneficial Interest or the Trust
Agreement or any similar interest (and the Owner Participant shall be
responsible for all such fees and expenses), unless such offer, sale or
transfer shall occur (A) after the Lease has been declared in default or if
the transfer is pursuant to the exercise of remedies under Article 17 of
the Lease or (B) in connection with the termination of the Lease or action
or direction of the Lessee pursuant to Section 4.02, Article 10 or Article
11 of the Lease; and
(ii) to pay the fees, costs and expenses of all appraisers involved
in an independent appraisal of the Aircraft to the extent required under
Section 4.03 of the Lease.
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee. (a)
Resignation and Removal. The Owner Trustee or any successor Owner Trustee may
resign or may be removed by the Owner Participant, and a successor Owner
Trustee may be appointed and a Person may become Owner Trustee under the Trust
Agreement only in accordance with the provisions of Section 3.11 of the Trust
Agreement and the provisions of paragraphs (b) and (c) of this Section 11.01.
(b) Conditions to Appointment. The appointment in any manner of a
successor Owner Trustee pursuant to Section 3.11 of the Trust Agreement shall
be subject to the following conditions:
(i) Such successor Owner Trustee shall be a Citizen of the United
States;
(ii) Such successor Owner Trustee shall be a bank or a trust company
having combined capital, surplus and undivided profits of at least
$100,000,000 or a bank or trust company fully guaranteed by a direct or
indirect parent thereof having a combined capital, surplus and undivided
profits of at least $100,000,000;
(iii) Such appointment shall not violate any provisions of the
Transportation Code or any applicable rule or regulation of the applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered or create a relationship which would be in violation
of the Transportation Code or any applicable rule or regulation of the
applicable regulatory agency or body of any other jurisdiction in which the
Aircraft may then be registered;
(iv) Such successor Owner Trustee shall enter into an agreement
or agreements, in form and substance reasonably satisfactory to the
Lessee, the Owner Participant, the Pass Through Trustee and the
Indenture Trustee whereby such successor Owner Trustee confirms that it
shall be deemed a party to this Agreement, the Trust Agreement, the
Lease, the Lease Supplement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, the Indenture, the Indenture Supplement and
any other Operative Agreement to which the Owner Trustee is a party and
agrees to be bound by all the terms of such documents applicable to the
Owner Trustee and makes the representations and warranties contained in
Section 7.04 hereof (except that it may be duly incorporated, validly
existing and in good standing under the laws of the United States of
America or any State thereof); and
(v) All filings of Uniform Commercial Code financing and continuation
statements, filings in accordance with the Transportation Code and
amendments thereto shall be made and all further actions taken in
connection with such appointment as may be necessary in connection with
maintaining the validity, perfection and priority of the Lien of the
Indenture and the valid and continued registration of the Aircraft in
accordance with the Transportation Code.
(c) Appointment. For so long as the Aircraft remains registered
under the Transportation Code, the Owner Participant agrees to appoint
promptly a successor Owner Trustee meeting the requirements of Section
11.01(b) hereof in the event the Owner Participant has knowledge that the
Owner Trustee at any time shall not be a Citizen of the United States.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant. The Owner
Participant shall have no obligation or duty to the Lessee or to any Holder
with respect to the transactions contemplated by this Agreement, except those
obligations or duties expressly set forth in this Agreement, the Indenture,
the Trust Agreement, the Tax Indemnity Agreement, AVSA's FAA ▇▇▇▇ of Sale,
AVSA's Warranty ▇▇▇▇ of Sale, the Lease or any other Operative Agreement to
which the Owner Participant is a party and the Owner Participant shall not be
liable for the performance by any party hereto of such other party's
obligations or duties hereunder. Under no circumstances shall the Owner
Participant as such be liable to the Lessee, nor shall the Owner
Participant be liable to any Holder, for any action or inaction on the part
of the Owner Trustee or the Indenture Trustee in connection with this
Agreement, the Indenture, the Lease, the Trust Agreement, the Purchase
Agreement Assignment, the Engine Warranty Assignment, any other Operative
Agreement, the ownership of the Aircraft, the administration of the
Lessor's Estate or the Trust Indenture Estate or otherwise, whether or not
such action or inaction is caused by the willful misconduct or gross
negligence of the Owner Trustee or the Indenture Trustee.
Section 12.02. Interest of Holders of Certificates. A Holder of a
Certificate shall have no further interest in, or other right with respect to,
the Trust Indenture Estate when and if the principal and interest on all
Certificates held by such Holder and all other sums payable to such Holder
under this Agreement, under the Indenture and under such Certificates shall
have been paid in full.
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents. The Lessee
hereby consents in all respects to the execution and delivery of the
Indenture, the Intercreditor Agreement and the Liquidity Facilities and to all
of the terms of said documents, and the Lessee acknowledges receipt of an
executed counterpart of such documents; it being agreed that such consent
shall not be construed to require the Lessee's consent to any future
supplement to, or amendment, waiver or modification of the terms of the
Indenture, the Intercreditor Agreement or the Liquidity Facilities or the
Certificates, except that prior to the occurrence and continuance of an Event
of Default, no section of the Indenture, the Trust Agreement, the
Intercreditor Agreement or the Liquidity Facilities shall be amended or
modified in any manner materially adverse to the Lessee without its consent.
Section 13.02. Further Assurances. The Lessee hereby confirms to
the Owner Participant its covenants set forth in and obligations under the
Lease. The Lessee agrees that, except as otherwise provided in the
Indenture, the Owner Trustee may not enter into any amendment, modification
or supplement of, or give any waiver or consent with respect to, or approve
any matter or document as being satisfactory under the Lease without the
prior consent of the Indenture Trustee and the Owner Participant and that,
except as otherwise provided in the Indenture, upon an Indenture Event of
Default, the Indenture Trustee may act as the Lessor under the Lease to the
exclusion of the Owner Trustee. The Lessee further agrees to deliver to
the Indenture Trustee and the Owner Participant a copy of each notice,
statement, request, report or other communication given or required to be
given to the Owner Trustee under the Lease.
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment. The Pass Through Trustee and the Subordination Agent hereby
acknowledge and agree to be bound by all of the terms and conditions of the
Indenture, including without limitation, Section 8.01 thereof regarding the
rights of the Owner Participant to purchase the Certificates under
circumstances specified therein.
ARTICLE 14
NOTICES
Section 14.01. Notices. All notices, demands, declarations and
other communications required by this Agreement shall be in writing and
shall be deemed received (a) if given by telecopier, when transmitted and
the appropriate telephonic confirmation received if transmitted on a
Business Day and during normal business hours of the recipient, and
otherwise on the next Business Day following transmission, (b) if given by
certified mail, return receipt requested, postage prepaid five Business
Days after being deposited in the United States mail and (c) if given by
FedEx service (or, if a Default or Event of Default shall have occurred and
be continuing, by other comparable courier service), when received or
personally delivered, addressed:
(a) If to the Lessee, to its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President and Treasurer with a
copy to Senior Vice President and General Counsel at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, facsimile
(▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessee shall from time to
time designate in writing to the Lessor, the Indenture Trustee and the
Owner Participant;
(b) If to the Lessor or the Owner Trustee, to it ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (617)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessor
shall from time to time designate in writing to the Lessee and the
Indenture Trustee, with a copy to the Owner Participant;
(c) If to the Owner Participant, to its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President Leasing with
a copy to Director, Portfolio Administration, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
facsimile ▇▇▇ ▇▇▇-▇▇▇▇, or to such other address as the Owner Participant
may from time to time designate in writing to the Lessee and the Indenture
Trustee;
(d) If to the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee, to its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (801)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the
Indenture Trustee or the Pass Through Trustee, as the case may be, shall
from time to time designate in writing to the Lessor, the Lessee and the
Owner Participant; and
(e) If to a Liquidity Provider, to its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Manager, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as a
Liquidity Provider shall from time to time designate in writing to the
Lessor, the Lessee and the Indenture Trustee.
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing. (a) Subject to the terms and
conditions of this Section 15.01, the Lessee may request the Owner Participant
to participate in up to two refinancings in whole but not in part, of the
Certificates prior to the end of the Basic Term (a "Refinancing"). Such
Refinancings may be placed in either the private or public markets and shall
be denominated in United States dollars (or in any other foreign currency so
long as the Owner Participant is satisfied there is no foreign currency risk
to it), and shall be on terms that do not materially adversely affect the
Owner Participant. The Owner Participant agrees to negotiate promptly in good
faith to conclude an agreement with the Lessee as to the terms of any such
Refinancing transaction (including the terms of any debt to be issued in
connection with such refinancing and the documentation to be executed in
connection therewith). Without the prior written consent of the Owner
Participant, the prospectus and other offering materials relating to any
Refinancing in the form of a public offering shall not identify the Owner
Participant and shall not include any financial statements of the Owner
Participant or any Affiliate thereof. In connection with any such Refinancing
in the form of a public offering, the Lessee shall indemnify the Owner
Participant in a manner satisfactory to it for any liabilities under federal,
state or foreign securities laws resulting from such offering. The aggregate
principal amount of the new Certificates issued in connection with each
Refinancing shall be the same as the aggregate principal amount outstanding on
the Certificates being refinanced.
(b) Notwithstanding anything herein to the contrary, no Refinancing
will be permitted unless the Owner Participant and the Indenture Trustee shall
have received at least 15 days' prior written notice of the scheduled closing
date of such Refinancing and the Owner Participant shall have been provided
such longer period as it shall have required for a reasonable opportunity to
review the relevant documentation and the Owner Participant shall have
determined in good faith that neither it nor the Owner Trustee shall suffer
any loss or expense or bear any increased risk as a result of such Refinancing
(including, without limitation, any risk with respect to taxes or other
adverse consequences to the Owner Participant including the application of
Revenue Procedures 75-21 and 75-28 and Section 467 of the Code) for which it
has not been or will not have been indemnified by the Lessee in a manner
reasonably satisfactory to the Owner Participant, nor shall its rights against
all other parties taken as a whole be adversely affected compared to such
rights in effect under the Operative Agreements prior to such proposed
Refinancing.
Prior to the consummation of any Refinancing pursuant to this Section
15.01, the Owner Participant and the Lessee shall agree upon a schedule
setting forth each installment of Basic Rent and setting forth Stipulated Loss
Values and Termination Values payable pursuant to the Lease as a result of the
Refinancing in accordance with Section 3.04 of the Lease, and thereafter the
amounts set forth in such schedule shall become the amounts payable under the
Lease. Upon the consummation of the Refinancing, the evidence of indebtedness
issued pursuant to the Refinancing shall be considered "Certificates" for
purposes of this Agreement, the Lease and the Indenture.
(c) Notwithstanding the foregoing, the Owner Participant shall have
no obligation to proceed with any Refinancing transaction as contemplated by
this Section 15.01 unless the Lessee indemnifies the Owner Trustee and the
Owner Participant by agreement in form and substance satisfactory to each of
them, for any liability, obligation (other than the obligation to pay
principal and interest in respect of the refinanced indebtedness), cost or
expense (including, without limitation, reasonable attorneys' fees and
Make-Whole Premium or other amounts due under the Indenture), including any
adverse tax consequences or impact, related to or arising out of any such
Refinancing transaction.
(d) Without the prior written consent of the Owner Participant,
which consent may be withheld in its sole discretion, no such refinancing
shall (1) cause the aggregate principal amount of the indebtedness to be
substituted for the Certificates to exceed the aggregate principal amount
of the then outstanding Certificates, (2) cause the weighted average life
of such indebtedness to be different by more than 6 months than the
remaining weighted average life of the then outstanding Certificates, or
(3) cause the date of maturity of such indebtedness to be later than the
date of maturity of the Certificates being refinanced.
(e) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the
Certificates then outstanding; provided, however, that such Refinancing shall
be subject to the satisfaction of each of the following conditions:
(i) Payment of principal, accrued interest, Make-Whole Premium
and breakage costs, if any, and all other sums due and owing on the
Certificates payable under the Indenture;
(ii) Payment in full of all other amounts then due and owing by the
Lessee under this Agreement, the Indenture, the Lease, the Trust Agreement,
and the Certificates then outstanding shall have been made by the Lessee;
(iii) Such party shall have received such opinions of counsel
(including, without limitation, an opinion received by the Owner
Participant from independent tax counsel reasonably satisfactory to the
Lessee that such Refinancing shall not result in any adverse tax
consequences to such Owner Participant, unless the Lessee shall have agreed
to provide an indemnity in respect thereof reasonably satisfactory in form
and substance to the Owner Participant), certificates and other documents
as it may reasonably request, each in form and substance reasonably
satisfactory to such party;
(iv) All authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) The Lessee shall have provided or agreed to provide to the
Owner Participant, as Supplemental Rent under the Lease, sufficient
funds to pay any breakage costs, Make-Whole Premium and any other
amounts due under the Indenture;
(vi) The satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 15.01 to such
party's obligations under this Section 15.01;
(vii) No Payment Default, Bankruptcy Default or Event of Default
shall have occurred and be continuing or would occur immediately after
giving effect to such Refinancing;
(viii) In the event the Lessee shall not prohibit the purchase of
the Refinancing loan certificates by, or with the assets of, an employee
benefit plan, as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA or a plan or individual retirement account, which is
subject to Section 4975(c) of the Code, (individually or collectively, an
"ERISA Plan"), the Lessee will permit the placement of the Refinancing loan
certificates with an ERISA Plan only if either (A) if such placement is in
the form of pass through certificates, the sole underwriter or the manager
or co-manager of the underwriting syndicate or the selling or placement
agent of the Refinancing loan certificates represents to the Lessee that it
has a prohibited transaction exemption from the U.S. Department of Labor
with respect to pass through certificates (such as Prohibited Transaction
Exemption 89-88 or any other comparable exemption) or (B) purchasers of the
Refinancing loan certificates provide a representation (which may be in the
form of a deemed representation) regarding their source of funds used in
acquiring the Refinancing loan certificates and, if such purchasers
represent that they are using funds of an ERISA Plan in acquiring the
Refinancing loan certificates, such purchasers further represent that (1)
either they are relying on a prohibited transaction exemption from the U.S.
Department of Labor with respect to their purchase and holding of the
Refinancing loan certificates and they provide representations regarding
the satisfaction of the relevant conditions of such an exemption or (2)
their purchase and holding of the Refinancing loan certificates will not
constitute a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code. The reliance on any such exemption
will not be conditional on the Owner Participant's representation
concerning its party in interest or other status with respect to ERISA
Plans. If neither exemption referred to in clause (A) or (B) of this
paragraph (viii) is valid or applicable in any respect to the purchase
and holding of the Refinancing loan certificates, or if the
representation in clause (B) of this paragraph (viii) that such purchase
and holding will not constitute a non-exempt prohibited transaction is
not correct, whichever is applicable, then the Lessee shall indemnify
the Owner Participant pursuant to, and to the extent provided for, under
Sections 8 and 9 hereof for Taxes and Expenses resulting from any
"prohibited transaction", within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code, occurring with respect to the placement
of the Refinancing loan certificates with, or the holding of the
Refinancing loan certificates by, any ERISA Plan with respect to which
the Owner Participant is a party in interest, within the meaning of
Section 3(14) of ERISA, or a disqualified person, within the meaning of
Section 4975 of the Code, provided, however, that if the Lessee shall
fail to obtain either of the representations set forth in clause (A) or
(B) of this paragraph (viii), such indemnity shall not be subject to the
exceptions set forth under Sections 8.01(b)(xii)(A) and (B) and
9.01(b)(ix)(A) and (B) hereof; and
(ix) The Lessee shall pay all costs and expenses (including legal
fees) incurred in connection with any proposed or actually consummated
Refinancing.
Section 15.02. Reoptimization. (a) If a Change in Tax Rate occurs
prior to the end of the Basic Term, then, subject to the terms and conditions
of this Section 15.02 and Section 3.04 of the Lease, the Owner Participant
may, upon 30 days' prior notice to the Lessee, the Indenture Trustee, the
Owner Trustee and the Holders, elect to modify the schedule of payments of
principal of the certificates issued ("Refinancing Certificates") in
connection with any Refinancing using private debt (not including debt issued
pursuant to an exemption from registration under the Securities Act relying on
Rule 144A promulgated thereunder but otherwise marketed in a manner
substantially similar to securities registered under the Securities Act, and
not including debt issued in connection with any offering of securities
registered under the Securities Act) due on each remaining Rent Payment Date
on or commencing on the Rent Payment Date next succeeding the date mutually
agreed to by the Owner Participant, the Lessee and the Indenture Trustee on
which the Owner Participant shall make such modification (the "Reoptimization
Date"). Promptly after making such modification, the Owner Participant shall
furnish each party hereto written notice of the amounts so recalculated.
(b) Adjustments to Refinancing Certificates. On the Reoptimization
Date, subject to the satisfaction on or before the Reoptimization Date of the
conditions set forth in Section 15.02(c), the Owner Trustee will issue and
deliver and the Indenture Trustee will authenticate, and each holder of a
Refinancing Certificate will accept delivery of, a new Refinancing Certificate
or Refinancing Certificates (in replacement of each Refinancing Certificate
then held by such holder, which Refinancing Certificates shall be surrendered
to the Indenture Trustee for cancellation) containing such changed principal
installments (expressed as a percentage of the original principal amount of
such Refinancing Certificate) as shall have been recalculated by the Owner
Participant, but in the same principal amount as, and containing terms
identical to, except as otherwise contemplated by Section 15.02(d) hereof, the
Refinancing Certificates originally issued in connection with the Operative
Agreements.
(c) Conditions to the Obligations of the Holders of the Refinancing
Certificates on the Reoptimization Date. The obligation of each holder of a
Refinancing Certificate to accept delivery of a new Refinancing Certificate on
the Reoptimization Date, and to surrender on such Reoptimization Date any
Refinancing Certificate then held by it, is subject to the following
conditions precedent having been satisfied on or before the Reoptimization
Date:
(i) the requirements of Section 15.02(d) hereof shall have been
satisfied;
(ii) the following documents, in form and substance satisfactory to
such Holder, shall have been duly authorized, executed and delivered by the
party or parties thereto and shall be in full force and effect: (A) if the
payments of Basic Rent, Stipulated Loss Values and Termination Values with
respect to the Term have been changed, an amendment to the Lease, dated the
Reoptimization Date, (B) an amendment to the Indenture setting forth any
changed repayment schedule to the Refinancing Certificates, dated the
Reoptimization Date and duly filed (or in the process of being so duly
filed) for recordation with the Aeronautics Authority and (C) replacement
Refinancing Certificates; and
(iii) in connection with any Reoptimization the Owner Participant
shall pay or agree to pay all reasonable costs and expenses incurred by the
Lessee, the Owner Trustee, the Indenture Trustee and each Holder of a
Refinancing Certificate (including, without limitation, reasonable legal
fees and expenses) in connection with any such reoptimization.
(d) Payment Schedules. Except as otherwise provided in this
Section 15.02 as long as the Refinancing Certificates remain outstanding,
the payment schedules for the Refinancing Certificates shall not be
modified.
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes. It is hereby agreed
between the Owner Participant and the Lessee (but the Lessee makes no
representation to such effect) that it is the intent of the parties for
Federal, state, local and foreign income tax purposes that the Owner
Participant will be treated as the owner of the Aircraft and the Lessee will
be treated as the lessee of the Aircraft.
Section 17.02. Collateral Account. (a) The Indenture Trustee shall
notify the Owner Trustee and the Lessee of any losses incurred on the
Specified Investments in the Collateral Account promptly upon the realization
thereof, as well as any fees, commissions and other costs, Taxes (other than
income taxes) and expenses, if any, incurred by the Indenture Trustee in
connection with its administration of the Collateral Account (collectively,
"Losses"). Promptly upon receipt of such notification but, in any event, no
later than the earlier of the Delivery Date (or, if later, the last day of any
investment period referred to in Section 2.14(b) of the Indenture during which
the Delivery Date occurs) and the 15th day after the Cut-Off Date, the Lessee
shall pay to the Indenture Trustee, on behalf of the Owner Trustee, for
deposit into the Collateral Account, an amount equal to such Losses (net of
any investment earnings).
(b) The Lessee shall pay to the Indenture Trustee, on behalf of the
Owner Trustee (A) on each Payment Date prior to the Delivery Date an amount
equal to the aggregate amount of interest accrued on the Certificates from
(and including) the Certificate Closing Date or previous Payment Date, as the
case may be, to, but excluding, such Payment Date and (B) on the first Payment
Date subsequent to the Delivery Date, interest accrued on the Certificates
from and including the last Payment Date (or, if none, the Certificate Closing
Date), to, but excluding, the Delivery Date. In addition, the Lessee will pay
to the Indenture Trustee on behalf of the Owner Trustee all amounts owed by
the Owner Trustee pursuant to clause (b) of the last paragraph of Section 2.04
of the Indenture.
(c) If the Aircraft has not been purchased by the Owner Trustee
on the Delivery Date, the Lessee agrees to pay to the Indenture Trustee, on
behalf of the Owner Trustee, on the 15th day following the Cut-Off Date the
excess, if any, of the amounts payable under Section 6.02(b)(1) of the
Indenture over the amounts released from the Collateral Account under
Section 2.16 of the Indenture.
(d) All amounts payable by the Lessee pursuant to this Section 17.02
shall be paid to the Indenture Trustee at its principal office at ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust
Department, or as the Indenture Trustee may otherwise direct within the United
States, by wire transfer of immediately available funds in U.S. Dollars no
later than 10:30 a.m., New York City time, on the due date of such payment.
Section 17.03. Counterparts. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section 17.04. No Oral Modifications. Neither this Agreement nor
any of its terms may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification is sought. No such written termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy shall have been
delivered to and executed by the Owner Trustee and the Indenture Trustee. A
copy of each such termination, amendment, supplement, waiver or modification
shall also be delivered to each other party to this Agreement.
The consent of each of the Pass Through Trustee and the Subordination
Agent, in its capacity as a party to this Agreement and not as a Holder, shall
not be required to modify, amend or supplement this Agreement or to give any
consent, waiver, authorization or approval with respect to this Agreement
under the circumstances in which the consent of the Indenture Trustee would
not be required for such modification, amendment, supplement, consent, waiver
or approval in accordance with Section 8.01(b) of the Indenture, provided that
the Pass Through Trustee shall be entitled to receive an Opinion of Counsel
(as defined in the Pass Through Agreement) necessary, in its sole discretion,
to establish that the Indenture Trustee's consent would not be required under
such circumstances.
Section 17.05. Captions. The table of contents preceding this
Agreement and the headings of the various Articles and Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions of this Agreement.
Section 17.06. Successors and Assigns. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the Lessee and its
successors and permitted assigns, the Subordination Agent and its successors
and permitted assigns, including without limitation each Holder of a
Certificate, the Owner Participant and its successors and permitted assigns,
the Owner Trustee and its successors as Owner Trustee (and any additional
owner trustee appointed) under the Trust Agreement, the Indenture Trustee and
its successors as Indenture Trustee (and any additional indenture trustee
appointed) under the Indenture and the Pass Through Trustee and its successors
as Pass Through Trustee (and any additional pass through trustee appointed).
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and
the Pass Through Trustee. Each of SSB and FSB is entering into this Agreement
solely in their respective capacities (except to the extent otherwise
expressly indicated), in the case of SSB, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, in the case of FSB, not in
its individual capacity but solely as Indenture Trustee under the Indenture
and as Pass Through Trustee under the Pass Through Agreement, and except as
otherwise expressly provided in this Agreement or in the Lease, the Indenture,
the Pass Through Agreement or the Trust Agreement, neither SSB, nor FSB,
shall be personally liable for or on account of its statements,
representations, warranties, covenants or obligations under this Agreement;
provided, however, that each of SSB and FSB accepts the benefits running to it
under this Agreement, and each agrees that (except as otherwise expressly
provided in this Agreement or any other Operative Agreement to which it is a
party) it shall be liable in its individual capacity for (a) its own gross
negligence or willful misconduct (whether in its capacity as trustee or in its
individual capacity), (b) any breach of representations and warranties or any
breach of covenants made in its individual capacity pursuant to or in
connection with this Agreement or the other Operative Agreements to which
it is a party, (c) any breach, in the case of the Owner Trustee, of its
covenants contained in Sections 3.05 and 3.08 of the Indenture, (d) the
failure to use ordinary care in receiving, handling and disbursing funds,
(e) in the case of the Owner Trustee, Lessor's Liens attributable to it in
its individual capacity, (f) in the case of the Indenture Trustee,
Indenture Trustee's Liens and (g) taxes, fees or other charges on, or based
on, or measured by, any fees, commissions or compensation received by it in
connection with the transactions contemplated by the Operative Agreements.
Section 17.08. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17.09. Public Release of Information. Subject to applicable
legal requirements (including, without limitation, securities laws
requirements, other regulatory requirements and other legally compelled
disclosures), so long as there shall not have occurred an Event of Default or
Indenture Event of Default, each party to this Agreement shall in each
instance obtain the prior written approval of each other party to this
Agreement concerning the exact text and timing of news releases, articles and
other information releases to the public media concerning any Operative
Agreements.
Section 17.10. Certain Limitations on Reorganization. The Indenture
Trustee and the Pass Through Trustee agree that, if (i) the Owner Trustee
becomes or all or any part of the Lessor's Estate or the trust created by the
Trust Agreement becomes the property of, a debtor subject to the
reorganization provisions of the Bankruptcy Code or any other applicable
bankruptcy or insolvency statutes, (ii) pursuant to any such reorganization
provisions, the Owner Participant is held to have recourse liability to the
debtor, the Owner Trustee or the trustee of the debtor directly or indirectly
on account of any amount payable as Make-Whole Premium, principal or interest
on the Certificates, or any other amount payable on any Certificate that is
provided in the Operative Agreements to be nonrecourse to the Owner
Participant and (iii) the Indenture Trustee actually receives any Recourse
Amount which reflects any payment by the Owner Participant on account of (ii)
above, then the Indenture Trustee, as the case may be, shall promptly refund
to the Owner Participant such Recourse Amount. For purposes of this Section
17.10, "Recourse Amount" means the amount by which the portion of such payment
by the Owner Participant on account of clause (ii) above received by the
Indenture Trustee exceeds the amount which would have been received by the
Indenture Trustee if the Owner Participant had not become subject to the
recourse liability referred to in (ii) above. Nothing contained in this
Section shall prevent the Indenture Trustee from enforcing any individual
obligation (and retaining the proceeds thereof) of the Owner Participant under
this Agreement or any other Operative Agreement to the extent herein or
therein provided, for which the Owner Participant has expressly agreed by the
terms of this Agreement to accept individual responsibility.
Section 17.11. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS AND IS BEING DELIVERED IN NEW
YORK.
Section 17.12. Section 1110 Compliance. The parties hereto agree
that the transactions contemplated by the Operative Agreements are expressly
intended to be, shall be and should be construed so as to be entitled to the
benefits and protection of Section 1110 of the Bankruptcy Code.
Section 17.13. Reliance of Liquidity Providers. Each of the parties
hereto agrees and acknowledges that each Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that each Liquidity Provider may rely on such representations
and warranties to the same extent as if such representations and warranties
were made to such Liquidity Provider directly. The terms of this Agreement
shall inure to the benefit of each Liquidity Provider, their respective
successors and permitted assigns.
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality. Each party hereto agrees (on behalf
of itself and each of its Affiliates, agents, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature, any non-public information supplied to it pursuant to this
Agreement which is identified by the Person supplying the same as being
confidential at the time the same is delivered to such party, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any of the parties hereto, (iii) to bank examiners or similar
regulatory authorities, auditors or accountants, (iv) in connection with any
litigation to which any one or more of the parties hereto is a party relating
to the transactions contemplated hereby or by any of the Operative Agreements,
(v) to an Affiliate of the parties hereto, (vi) to any assignee or participant
(or prospective assignee or participant) or other transferee so long as such
assignee or participant (or prospective assignee or participant) or other
transferee first executes and delivers to the respective party making such
assignment or participation an agreement in writing to be bound by the
provisions of this Section 18.01 or (vii) in the case of the Owner Participant
or the Owner Trustee (in its individual or trust capacity) to the Owner
Trustee (in its individual or trust capacity) or to the Owner Participant, as
the case may be.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers and
this Participation Agreement shall be effective this 22nd day of May, 1997.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Treasurer and Managing
Director - Structured Finance
OWNER PARTICIPANT:
PMCC LEASING CORPORATION
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager, Structured Finance
OWNER TRUSTEE:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise expressly provided herein,
but solely as Owner Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
INDENTURE TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Indenture Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PASS THROUGH TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Pass Through Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SUBORDINATION AGENT:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Subordination Agent
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
CERTIFICATE INFORMATION
1. Federal Express Corporation 1997-1 Pass Through Trust Class A
Federal Express Corporation Trust No. N672FE
Interest Rate: 7.50%
Maturity: January 15, 2018
Principal Amount: $33,374,000
2. Federal Express Corporation 1997-1 Pass Through Trust Class B
Federal Express Corporation Trust No. N672FE
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,515,000
3. Federal Express Corporation 1997-1 Pass Through Trust Class C
Federal Express Corporation Trust No. N672FE
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,095,000
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N672FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any Person, governmental department, bureau, commission or agency
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be received by a
Person shall be supplemented by a further payment to such Person so that the
sum of the two payments, after deduction of all Taxes resulting from the
receipt or accrual of such payments, shall be equal to the payment to be
received. In the case of amounts payable to the Lessor, the Owner Participant,
or any corporate Affiliate of the Owner Participant, it shall be presumed that
such Person is at all times subject to Federal income tax at the maximum
marginal rate generally applicable to corporations from time to time and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty ▇▇▇▇ of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a Replacement Engine) whether or not
any of such initial or Replacement Engines may from time to time be installed
on such Airframe or may be installed on any other airframe or on any other
aircraft, including any aircraft substituted pursuant to Section 11.03 of the
Lease. Prior to delivery of the initial Lease Supplement, references in the
Operative Agreements (including Section 3.05 of the Participation Agreement)
to Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N672FE and Manufacturer's serial number 779, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N672FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N672FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA ▇▇▇▇ of Sale. The ▇▇▇▇ of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty ▇▇▇▇ of Sale. The full warranty ▇▇▇▇ of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on November 19, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N672FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Law. Any change to the Code or the Treasury regulations
promulgated thereunder or the publication of any revenue ruling, revenue
procedure or any informational release by the Internal Revenue Service or the
Department of Treasury either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
of such change in writing prior to the Delivery Date.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. November 17, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by ▇▇▇▇▇'▇ or (y) a short-term certificate of deposit rating of P-1 by
▇▇▇▇▇'▇, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N672FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N672FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N672FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof resulting from (i) claims against the Indenture Trustee not related to
the administration of the Trust Indenture Estate or any transactions pursuant
to the Indenture or any document included in the Trust Indenture Estate, (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the Lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N672FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N672FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA ▇▇▇▇
of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, any warranty with respect to
the Airframe and the Engines, all amounts of Basic Rent and Supplemental Rent,
including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. ▇▇▇▇▇'▇ Investors Service, Inc.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Basic Term
utilizing the multiple investment sinking fund method of analysis, computed on
the basis of the same methodology and assumptions as were utilized by the
Owner Participant in determining Basic Rent, Stipulated Loss Value and
Termination Value percentages, as the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N672FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N672FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N670FE, N671FE,
N673FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. November 19, 2020 and each January 15 and July 15
commencing on January 15, 1998.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by S&P and ▇▇▇▇▇'▇,
respectively or, if such ratings are unavailable, rated by any nationally
recognized rating organization in the United States equal to the highest
rating assigned by such rating organization; (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) overnight repurchase agreements with respect to the securities described
in clause (a) above entered into with an office of a bank or trust company
which is located in the United States of America or any bank or trust company
which is organized under the laws of the United States or any state thereof
and has capital, surplus and undivided profits aggregating at least $500
million.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Basic Term, the amount determined by multiplying the Purchase
Price by the percentage set forth in Schedule III of the Lease under the
heading "Stipulated Loss Value Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N672FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. The Basic Term of the lease for the Aircraft under the Lease
and, if renewed pursuant to Section 4.01 of the Lease, each Renewal Term for
the Aircraft for which the Lease is renewed, or such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that is
on or after December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on July 15, 2014, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N672FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, First Chicago
Capital Markets, Inc., ▇▇▇▇▇▇▇, Sachs & Co. and ▇.▇. ▇▇▇▇▇▇ & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE III
PERMITTED COUNTRY LIST
Australia Luxembourg
Austria Netherlands
Belgium New Zealand
Canada Norway
Denmark Philippines
Finland Portugal
France Republic of China (Taiwan)
Germany Singapore
Greece Sweden
Iceland Switzerland
Ireland Thailand
Japan United Kingdom
SCHEDULE IV
DEBT PORTION
Debt Portion $61,984,000
------------
EXHIBIT A(1)(a)(i)
[Letterhead of Federal Express]
[Certificate Closing Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N672FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates will be
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision, (i)
executed counterparts of the Pass Through Agreement, the Series Supplements
and the Operative Agreements to be delivered on the Certificate Closing
Date (the "Certificate Closing Date Documents") and (ii) the forms of the
Operative Agreements to be delivered on the Delivery Date. We have relied
upon originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, documents and other instruments as
in our judgment are relevant to rendering the opinions expressed below. As
to any facts material to the opinions expressed below (other than any
thereof relating to Federal), we have relied upon the representations and
warranties made in the Certificate Closing Date Documents, the accuracy of
which we have not independently investigated or verified. In such
examination, we have assumed the genuineness of all signatures (other than
the signatures of Federal) and the authenticity of all documents submitted
to us as originals and the conformity with the originals of all documents
submitted to us as copies. We have also assumed that each of the parties
to each of the Certificate Closing Date Documents, other than Federal, has
full power, authority and legal right to enter into such Certificate
Closing Date Documents and that each such Certificate Closing Date Document
has been duly authorized, executed and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Certificate Closing Date Documents to which it is a party. Federal is duly
qualified to do business and is in good standing in the State of Tennessee
and each other state of the United States in which its operations or the
nature of its business requires Federal to so qualify, except where the
failure to so qualify would not have a material adverse impact on Federal
or its business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Certificate Closing Date Documents to which
Federal is a party has or had, on the date of execution thereof, been duly
authorized, executed and delivered by Federal and each constitutes the
legal, valid and binding obligation of Federal enforceable against Federal
in accordance with its terms. Each of the Certificate Closing Date
Documents to which Federal is to be a party and which are to be executed on
the Delivery Date has been duly authorized by Federal.
4. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which Federal is a party, nor the
consummation of any of the transactions by Federal contemplated thereby,
nor the performance of the obligations thereunder by Federal, did at the
time of execution and delivery, or does presently (a) require any
stockholder approval or violate the certificate of incorporation or by-laws
of Federal or (b) conflict with or contravene the provisions of, or
constitute a default under, or result in the creation of any Lien (other
than Liens permitted under Section 6.01(a) of the Lease) upon the property
of Federal under any law, governmental rule or regulation, or the charter
or bylaws of Federal or any order, writ, injunction or decree of any court
or governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which it is a party, nor the
consummation of any transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did or does, as the
case may be, (a) require the consent or approval of, the giving of notice
to, or (except as described or contemplated in the Participation Agreement
and the Lease, all of which are required to be performed on or prior to the
Certificate Closing Date and which shall have been accomplished on or prior
to the Certificate Closing Date) the registration with, or the taking of
any other action in respect of, the Aeronautics Authority, the Securities
and Exchange Commission or any other authority or agency of the federal
government or of the State of Tennessee other than (i) the registration of
the issuance and sale of the Pass Through Certificates under the Securities
Act and (ii) compliance with the securities laws of each applicable state,
or (b) contravene any judgment or order applicable to or binding on Federal
or any law or governmental rule or regulation of the United States or of
the State of Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Certificate Closing Date Documents.
7. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
8. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
9. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Certificate Closing Date Documents to which Federal
is a party are based upon the assumption for purposes of such opinions and
without independent analysis that, notwithstanding the respective choice of
laws clauses in the Certificate Closing Date Documents, the governing law
with respect to each of the Certificate Closing Date Documents is identical
in all relevant respects to the law of the State of Tennessee. Insofar as
the foregoing opinion relates to the enforceability of any instrument, such
enforceability is subject to applicable bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally
(whether such enforceability is considered in a proceeding in equity or at
law). The enforceability of the remedies provided under the Lease may also
be limited by applicable laws which may affect the remedies provided
therein but which do not in my opinion affect the validity of the Lease or
make such remedies inadequate for the practical realization of the benefits
intended to be provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(a)(ii)
[Letterhead of Federal Express]
[Delivery Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N672FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.02(d)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates were
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that were issued under the Indenture, as supplemented
by the related Indenture and Security Agreement Supplement.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision,
executed counterparts of the Operative Agreements, the Pass Through
Agreement and each Series Supplement (the "Transaction Agreements"). We
have relied upon originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records, documents and other
instruments as in our judgment are relevant to rendering the opinions
expressed below. As to any facts material to the opinions expressed below
(other than any thereof relating to Federal), we have relied upon the
representations and warranties made in the Transaction Agreements, the
accuracy of which we have not independently investigated or verified. In
such examination, we have assumed the genuineness of all signatures (other
than the signatures of Federal) and the authenticity of all documents
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies. We have also assumed that each of the
parties to each of the Transaction Agreements, other than Federal, has full
power, authority and legal right to enter into such Transaction Agreements
and that each such Transaction Agreement has been duly authorized, executed
and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Transaction Agreements to which it is a party. Federal is duly qualified
to do business and is in good standing in the State of Tennessee and each
other state of the United States in which its operations or the nature of
its business requires Federal to so qualify, except where the failure to so
qualify would not have a material adverse impact on Federal or its
business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Transaction Agreements to which Federal is a
party has or had, on the date of execution thereof, been duly authorized,
executed and delivered by Federal and each constitutes the legal, valid and
binding obligation of Federal enforceable against Federal in accordance
with its terms.
4. Neither the execution and delivery by Federal of the
Transaction Agreements to which Federal is a party, nor the consummation of
any of the transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did at the time of
execution and delivery, or does presently (a) require any stockholder
approval or violate the certificate of incorporation or by-laws of Federal
or (b) conflict with or contravene the provisions of, or constitute a
default under, or result in the creation of any Lien (other than Liens
permitted under Section 6.01(a) of the Lease) upon the property of Federal
under any law, governmental rule or regulation, or the charter or bylaws of
Federal or any order, writ, injunction or decree of any court or
governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Transaction Agreements to which it is a party, nor the consummation of any
transactions by Federal contemplated thereby, nor the performance of the
obligations thereunder by Federal, did or does, as the case may be, (a)
require the consent or approval of, the giving of notice to, or (except as
described or contemplated in the Participation Agreement and the Lease, all
of which were or are required to be performed on or prior to the Delivery
Date and which were or shall have been accomplished on or prior to the
Delivery Date) the registration with, or the taking of any other action in
respect of, the Aeronautics Authority, the Securities and Exchange
Commission or any other authority or agency of the federal government or of
the State of Tennessee other than (i) the registration of the issuance and
sale of the Pass Through Certificates under the Securities Act, (ii)
compliance with the securities laws of each applicable state and (iii) the
filings and recordings referred to in paragraph 7 below, or (b) contravene
any judgment or order applicable to or binding on Federal or any law or
governmental rule or regulation of the United States or of the State of
Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) (i) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Transaction Agreements, or (ii) involves the
Aircraft.
7. Except for the registration in the Owner Trustee's name
of the Aircraft pursuant to the Transportation Code, and except for the
filing and, where appropriate, recording, pursuant to the Transportation
Code of (A) AVSA's FAA ▇▇▇▇ of Sale, (B) the Trust Agreement, (C) the
Lease (with the Lease Supplement covering the Aircraft, the Indenture and
the Indenture and Security Agreement Supplement covering the Aircraft
attached as exhibits) and (D) the Indenture (with the Indenture and
Security Agreement Supplement covering the Aircraft attached as an
exhibit), no further action, including any filing or recording of any
document is necessary or advisable in order to establish and perfect the
Owner Trustee's title to and interest in the Aircraft as against Federal
and any third parties, or to perfect the first mortgage lien on the
Aircraft in favor of the Indenture Trustee in each case with respect to
such portion of the Aircraft as is covered by the recording system
established by the Transportation Code.
8. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
9. On the date hereof the Owner Trustee received good and
valid title to the Aircraft free and clear of all Liens on file with the
FAA, except for Liens permitted under Section 6.01(a) of the Lease.
10. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
11. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Transaction Agreements to which Federal is a party
are based upon the assumption for purposes of such opinions and without
independent analysis that, notwithstanding the respective choice of laws
clauses in the Transaction Agreements, the governing law with respect to
each of the Transaction Agreements is identical in all relevant respects to
the law of the State of Tennessee. Insofar as the foregoing opinion
relates to the enforceability of any instrument, such enforceability is
subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally (whether such
enforceability is considered in a proceeding in equity or at law). The
enforceability of the remedies provided under the Lease may also be limited
by applicable laws which may affect the remedies provided therein but which
do not in my opinion affect the validity of the Lease or make such remedies
inadequate for the practical realization of the benefits intended to be
provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
As to the matters referred to in paragraphs 5, 7 and 9, I
have relied on the opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ of even date
herewith, to the extent such matters are addressed in such counsel's
opinion and subject to the assumptions and qualifications expressed
therein.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(i)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N671FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as Owner Trustee, and First Security Bank, National
Association, not in its individual capacity, except as otherwise stated, but
solely as Indenture Trustee, Pass Through Trustee and Subordination Agent,
relating to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(v) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of a portion of the Owner Trustee's payment
of the Purchase Price of one Airbus A300F4-605R Aircraft using the proceeds
from the public offering of the Pass Through Certificates. On the Certificate
Closing Date, three Classes of Pass Through Certificates will be issued by
separate Pass Through Trusts, each formed to acquire, among other securities,
the Certificates bearing a particular interest rate and having a particular
Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Certificate Closing Date Documents") and the forms of the Operative
Agreements to be delivered on the Delivery Date. We have also examined
originals, or copies certified to our satisfaction, of such other agreements,
documents, certificates and statements of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. Assuming (i) the due authorization, execution and
delivery of the Certificate Closing Date Documents by each of the parties
to each such document (other than Federal Express), (ii) each such party
has full power and legal right to enter into and perform its respective
obligations under the Certificate Closing Date Documents, (iii) that the
execution, delivery and performance of each of the Certificate Closing Date
Documents by each of the parties thereto will not violate the respective
parties' constituent documents, (iv) the due authorization, execution,
issuance and delivery by the Owner Trustee, and the due authentication by
the Indenture Trustee, of the Certificates to be issued under the Indenture
in accordance with the terms of the Indenture, (v) the due authorization,
execution, issuance, delivery and authentication by the Pass Through
Trustee of the Pass Through Certificates to be issued under the Pass
Through Agreement and the Series Supplement relating to such Pass Through
Certificates, in each case in accordance with the terms of the Pass Through
Agreement and such Series Supplement, and (vi) that the form of each
Certificate Closing Date Document is in compliance with all applicable laws
and governmental rules and regulations (other than the laws of the United
States and the State of New York), then: (A) to the extent governed by New
York law, each Certificate Closing Date Document in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create, except that no opinion is
given with respect to perfection of such security interest on the date
hereof; (C) the Certificates, when issued to and acquired by the Pass
Through Trustee, will be legal, valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee in accordance with their
terms and the terms of the Indenture and will be entitled to the benefits
of the Indenture, including the benefit of the security interest created
thereby, except that no opinion is given with respect to perfection of such
security interest on the date hereof; (D) the Pass Through Certificates,
when issued to and acquired by the Underwriters in accordance with the
Underwriting Agreement, will be legal, valid and binding obligations of the
Pass Through Trustee enforceable against the Pass Through Trustee in
accordance with their terms and will be entitled to the benefits of the
Pass Through Agreement and the Series Supplement relating thereto; and (E)
the beneficial interest of the Owner Participant under the Trust Agreement
in and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
2. (a) Each of the Certificate Closing Date Documents to
which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express. Each of the Operative Agreements to which
Federal Express is to be a party and which are to be delivered on the
Delivery Date has been authorized by Federal Express.
(b) The execution, delivery and performance by Federal
Express of each of the Certificate Closing Date Documents to which Federal
Express is a party do not, or did not on the date of execution thereof,
violate, and fully comply, or did fully comply on the date of execution
thereof, with, any laws and governmental rules and regulations of the State
of New York that may be applicable to Federal Express. The opinion set
forth in this paragraph 2(b) is rendered without regard to the taking of
any action or the conduct of any other business by Federal Express in the
State of New York other than the transactions contemplated by the
Certificate Closing Date Documents.
3. The execution, delivery and performance of the
Certificate Closing Date Documents (other than the Certificates) by the
Owner Trustee in its individual or trust capacity, as the case may be, and
the issuance, execution, delivery and performance of the Certificates by
the Owner Trustee in its trust capacity do not violate, and fully comply
with, any laws and governmental rules and regulations of the State of New
York that may be applicable to the Owner Trustee in its individual or trust
capacity, as the case may be. The opinion set forth in this paragraph 3 is
rendered without regard to the effect, if any, on such issuance (in the
case of the Certificates), execution, delivery or performance, of the
taking of any action, the conduct of any business or the exercise of any
other powers by State Street Bank and Trust Company of Connecticut,
National Association in its individual or trust capacity in the State of
New York not related to the transactions contemplated by the Certificate
Closing Date Documents. We have assumed that State Street Bank and Trust
Company of Connecticut, National Association has made the filings necessary
to comply with Section 131.3 of the Banking Law of the State of New York,
however we express no opinion as to whether State Street Bank and Trust
Company of Connecticut, National Association is required to comply with
said Section 131.3.
4. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinion of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Vice President - Law of Federal Express to be delivered to
you and dated the date hereof, for purposes of the matters covered
thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware.
(c) The opinion contained in paragraph 1(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(ii)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N672FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity but solely as Owner
Trustee, and First Security Bank, National Association, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent, relating to the Aircraft. This
opinion is being delivered pursuant to Section 4.02(d)(ii) of the
Participation Agreement. Capitalized terms not otherwise defined herein have
the meanings assigned thereto in the Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of the Owner Trustee's payment of a portion
of the Purchase Price of one Airbus A300F4-605R Aircraft (the "Aircraft") using
the proceeds from the public offering of the Pass Through Certificates. On the
Certificate Closing Date, three Classes of Pass Through Certificates were
issued by separate Pass Through Trusts, each formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having a
particular Maturity issued under the Indenture. The Aircraft is to be leased
to Federal Express by the Owner Trustee pursuant to the Lease and subjected to
the Lien of the Indenture, and is to be delivered by the Owner Trustee to the
Lessee on this date, and in connection with the delivery of the Aircraft, the
Owner Trustee and Federal Express will execute and deliver the Lease
Supplement, and the Owner Trustee will execute and deliver the Indenture and
Security Agreement Supplement.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Transaction Agreements"). We have also examined originals, or copies
certified to our satisfaction, of such other agreements, documents,
certificates and statements of governmental officials and corporate officers
as we have deemed necessary or advisable as a basis for such opinions. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. With respect to that portion, if any, of the Aircraft
and the other property included in the Lessor's Estate as may not be
covered by the recording system established by the FAA pursuant to Section
44107 of the Transportation Code, no filing or recording of any document or
other action was or is necessary in order to establish the Owner Trustee's
title thereto and interest therein as against Federal Express and any third
parties.
2. Subject to execution and delivery of the Lease
Supplement and the Indenture and Security Agreement Supplement for the
Aircraft and to the registration of the Aircraft with the FAA in the name
of the Owner Trustee, the Lease, as supplemented, will create a valid
leasehold interest in the Aircraft, the entitlement thereof to the benefits
of recordation under the Transportation Code being subject to the due and
timely filing and, where appropriate, recording of (A) AVSA's FAA ▇▇▇▇ of
Sale, (B) the Trust Agreement, (C) the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft attached as exhibits) and (D)
the Indenture (with the Indenture and Security Agreement Supplement
covering the Aircraft attached as an exhibit), pursuant to the
Transportation Code, and assuming that at the time of such filing no other
documents relating to the Aircraft have been filed pursuant to the
Transportation Code.
3. Assuming (i) the due authorization, execution and
delivery of the Transaction Agreements by each of the parties to each such
document (other than Federal Express), (ii) each such party has full power
and legal right to enter into and perform its respective obligations under
the Transaction Agreements, (iii) that the execution, delivery and
performance of each of the Transaction Agreements by each of the parties
thereto will not violate the respective parties' constituent documents,
(iv) the due authorization, execution, issuance and delivery by the Owner
Trustee, and the due authentication by the Indenture Trustee, of the
Certificates issued under the Indenture in accordance with the terms of the
Indenture, (v) the due authorization, execution, issuance, delivery and
authentication by the Pass Through Trustee of the Pass Through Certificates
issued under the Pass Through Agreement and the Series Supplement relating
to such Pass Through Certificates, in each case in accordance with the
terms of the Pass Through Agreement and such Series Supplement, and (vi)
that the form of each Transaction Agreement is in compliance with all
applicable laws and governmental rules and regulations (other than the laws
of the United States and the State of New York), then: (A) to the extent
governed by New York law, each Transaction Agreement in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create; (C) the Certificates are
legal, valid and binding obligations of the Owner Trustee enforceable
against the Owner Trustee in accordance with their terms and the terms of
the Indenture and are entitled to the benefits of the Indenture, including
the benefit of the security interest created thereby; and (D) the
beneficial interest of the Owner Participant under the Trust Agreement in
and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, as supplemented by the
Indenture and Security Agreement Supplement, to the Lien of the Indenture
in favor of the Holders. The opinions set forth in this paragraph 3 are
subject to the due filing and recording, where appropriate, with the FAA of
the documents referred to in paragraph 2 above.
4. (a) Each of the Transaction Agreements to which Federal
Express is a party has been duly authorized, executed and delivered by Federal
Express.
(b) The execution, delivery and performance by Federal Express
of each of the Transaction Agreements to which Federal Express is a party do
not, or did not on the date of execution thereof, violate, and fully comply,
or did fully comply on the date of execution thereof, with, any laws and
governmental rules and regulations of the State of New York that may be
applicable to Federal Express. The opinion set forth in this paragraph 4(b)
is rendered without regard to the taking of any action or the conduct of any
other business by Federal Express in the State of New York other than the
transactions contemplated by the Transaction Agreements.
5. The execution, delivery and performance of the
Transaction Agreements (other than the Certificates) by the Owner Trustee
in its individual or trust capacity, as the case may be, and the issuance,
execution, delivery and performance of the Certificates by the Owner
Trustee in its trust capacity do not violate, and fully comply with, any
laws and governmental rules and regulations of the State of New York that
may be applicable to the Owner Trustee in its individual or trust capacity,
as the case may be. The opinion set forth in this paragraph 5 is rendered
without regard to the effect, if any, on such issuance (in the case of the
Certificates), execution, delivery or performance, of the taking of any
action, the conduct of any business or the exercise of any other powers by
State Street Bank and Trust Company of Connecticut, National Association in
its individual or trust capacity in the State of New York not related to
the transactions contemplated by the Transaction Agreements. We have
assumed that State Street Bank and Trust Company of Connecticut, National
Association has made the filings necessary to comply with Section 131.3 of
the Banking Law of the State of New York, however we express no opinion as
to whether State Street Bank and Trust Company of Connecticut, National
Association is required to comply with said Section 131.3.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture in and to the Aircraft and the
Lease) have been pledged and mortgaged with the Indenture Trustee as part of
the Trust Indenture Estate (subject to the due filing and, where appropriate,
recording of those documents referred to in paragraph 2 above and the
financing statement referred to in Section 4.02(f) of the Participation
Agreement), and the beneficial interest of the Owner Participant under the
Trust Agreement in and to such properties are subject, to the extent provided
in the Indenture, to the Lien of the Indenture in favor of the Holders of the
Certificates issued and to be issued under the Indenture.
7. The Indenture and Security Agreement Supplement, pursuant
to the Granting Clause of the Indenture, creates, as security for the
Certificates duly issued and to be issued under the Indenture, the first
priority security interest in the Aircraft it purports to create, the
perfection and rank thereof being subject to the registration with the FAA of
the Aircraft in the name of the Owner Trustee and the due filing and, where
appropriate, recording in accordance with the Transportation Code of the
documents referred to in paragraph 2 above. We express no opinion with
respect to the status of any security interest in any portion of the Aircraft
which does not constitute an "aircraft" or "aircraft engine", as defined in
paragraphs (6) and (7) of Section 40102(a) of the Transportation Code.
8. Except for (i) the filings and recordings referred to in
paragraph 2 above, (ii) the registration of the issuance and sale of the
Pass Through Certificates under the Securities Act and (iii) compliance
with the securities laws of each applicable state, neither the execution
and delivery by Federal Express of the Participation Agreement or any other
Operative Agreement to which it is a party, nor the consummation of any of
the transactions by Federal Express contemplated thereby, requires the
consent or approval of, the giving of notice to, or the registration with,
or the taking of any other action in respect of, the Department of
Transportation, the FAA, the Securities and Exchange Commission or any
other Federal or New York State governmental authority.
9. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the Lessor,
as lessor under and by reason of the Lease. The Lease, including the
rights under Section 1110 of the United States Bankruptcy Code, has been
assigned to the Indenture Trustee pursuant to the Indenture as part of the
collateral for the Certificates and, as assignee, the Indenture Trustee has
the benefit of Section 1110.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinions of ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Peregrin and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of
Federal Express to be delivered to you and dated the date hereof, for
purposes of the matters covered thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware. We express no opinion as to any matters
involving aviation law.
(c) The opinion contained in paragraph 3(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(a)
[Letterhead of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
We have acted as special New York counsel for (i) PMCC Leasing
Corporation ("PMCC") in connection with the transactions contemplated by the
Participation Agreement (Federal Express Corporation Trust No. N672FE), dated
as of May 1, 1997 (the "Participation Agreement"), among Federal Express
Corporation, as lessee, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as owner trustee, PMCC, as owner participant, and First
Security Bank, National Association, not in its individual capacity, except as
otherwise stated, but solely as indenture trustee, pass through trustee and
subordination agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation ("▇▇▇▇▇▇
▇▇▇▇▇▇") in connection with the transactions contemplated by the Owner
Participant Guaranty (the "Guaranty"), dated as of May 1, 1997 from ▇▇▇▇▇▇
▇▇▇▇▇▇ to each of the beneficiaries named therein. This opinion is being
furnished to you pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Participation Agreement.
We have examined executed counterparts of the Participation
Agreement, the Trust Agreement, the Tax Indemnity Agreement, the Ancillary
Agreement I and the Ancillary Agreement II (collectively, the "Owner
Participant Documents") and the Guaranty. We have made such other and further
investigations as we have deemed necessary or appropriate for purposes of this
opinion. In our examination we have assumed, with your permission, and
without independent investigation or inquiry, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as
certified or photocopies and the authenticity of the originals of such latter
documents.
With your permission, we have further assumed that (i) the
Owner Participant Documents and the Guaranty have been duly authorized,
executed and delivered by each of the parties thereto, (ii) the respective
parties thereto have the power and authority to execute, deliver and
perform the Owner Participant Documents and the Guaranty, (iii) the
execution, delivery and performance of the Owner Participant Documents and
the Guaranty by the parties thereto do not and will not violate the
certificate of incorporation, by-laws or other organizations documents of
any such party or any bond, debenture, note, mortgage, indenture, lease or
other agreement or instrument to which any such party is a party or by
which any such party is bound and does and will fully comply with all laws
an regulations applicable to each such party and (iv) the Owner Participant
Documents constitute valid, legal and binding obligations of the parties
thereto (other than PMCC), enforceable against such parties (other than
PMCC) in accordance with their respective terms.
Based upon the foregoing, we are of the opinion that:
1. The Participation Agreement and the Tax Indemnity Agreement
constitute valid and legally binding obligations of PMCC enforceable against
PMCC in accordance with their respective terms.
2. The Guaranty constitutes a valid and legally binding obligation
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ enforceable against ▇▇▇▇▇▇ ▇▇▇▇▇▇ in accordance with its
terms.
3. The execution, delivery and performance by PMCC of the Owner
Participant Documents will not result in any violation of any Federal or New
York statute or any order, rule or regulation issued pursuant to any New York
or Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over PMCC.
4. The execution, delivery and performance by ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
the Guaranty will not result in any violation of any Federal or New York
statute or any order, rule or regulation issued pursuant to any New York or
Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over ▇▇▇▇▇▇ ▇▇▇▇▇▇.
5. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by PMCC for the execution, delivery and performance by PMCC of the
Owner Participant Documents.
6. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by ▇▇▇▇▇▇ ▇▇▇▇▇▇ for the execution, delivery and performance by
▇▇▇▇▇▇ ▇▇▇▇▇▇ of the Guaranty.
Our opinions in paragraphs 1 and 2 are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
We are members of the Bar of the State of New York and express
no opinion herein concerning any law other than the laws of the State of New
York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied by you for any
other purpose, or relied upon by or furnished to any other person, firm or
corporation without our prior written consent, except that the Owner
Participant may furnish a copy of this opinion to a potential transferee or
participant of the interest of such entity or otherwise as required by a
governmental authority.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(b)
[Letterhead of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
In my capacity as Assistant General Counsel and Assistant
Secretary of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware corporation, I have
supervised corporate proceedings of (i) PMCC Leasing Corporation, a Delaware
corporation (the "Owner Participant"), in connection with the Owner
Participant's participation in the transactions contemplated by that certain
Participation Agreement (Federal Express Corporation Trust No. N672FE), dated
as of May 1, 1997 (the "Participation Agreement"), among the Owner
Participant, Federal Express Corporation, as Lessee; State Street Bank and
Trust Company of Connecticut, National Association, except as otherwise
stated, not in its individual capacity but solely as Owner Trustee; and First
Security Bank, National Association not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee, Pass Through Trustee and
Subordination Agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware
corporation (the "Guarantor"), in connection with the transactions
contemplated by the Owner Participant Guaranty (the "Guaranty"), dated as of
May 1, 1997 from ▇▇▇▇▇▇ ▇▇▇▇▇▇ to each of the beneficiaries named therein.
This opinion is delivered pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein but not otherwise defined herein,
shall have the respective meanings set forth in the Participation Agreement.
In connection with this opinion, I have examined originals,
or copies certified or otherwise identified to my satisfaction of the
Participation Agreement, the Trust Agreement, the Tax Indemnity Agreement,
the Ancillary Agreement I and the Ancillary Agreement II (each such
document to be hereafter referred to individually as an "Owner Participant
Document" and collectively as the "Owner Participant Documents") and the
Guaranty. I have also examined such corporate documents, records and
instruments of the Owner Participant and the Guarantor as in my judgement
are necessary or appropriate to enable me to render the opinions expressed
below. In rendering such opinions, I have relied upon the representations
and warranties contained in or made pursuant to the Owner Participant
Documents and the Guaranty and have assumed the due authorization,
execution and delivery of all documents and instruments by all parties
thereto other than the Owner Participant.
Based on the foregoing and subject to the qualifications and
matters of reliance set forth herein, I am of the opinion that:
1. The Owner Participant is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Owner Participant Documents and
to fulfill and comply with the terms, conditions and other provisions
thereof.
2. The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Guaranty and to fulfill and
comply with the terms, conditions and other provisions thereof.
3. The Owner Participant Documents have been duly authorized
by all necessary corporate action on the part of the Owner
Participant, and have been duly executed and delivered by the Owner
Participant.
4. The Guaranty has been duly authorized by all necessary
corporate action on the part of the Guarantor, and has been duly
executed and delivered by the Guarantor.
5. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the Owner
Participant of the Owner Participant Documents.
6. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the
Guarantor of the Guaranty.
7. There are no actions, suits or proceedings (whether or not
purportedly on behalf of the Owner Participant) pending or, to my
knowledge, threatened against or affecting the Owner Participant or
any property rights of the Owner Participant at law or in equity or
before any commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Owner
Participant or its ability to perform its obligations under the Owner
Participant Documents or which would affect the legality, validity or
enforceability of such Owner Participant Documents.
8. There are no actions, suits or proceedings (whether or
not purportedly on behalf of the Guarantor) pending or, to my
knowledge, threatened against or affecting the Guarantor or any
property rights of the Guarantor at law or in equity or before any
commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Guarantor or
its ability to perform its obligations under the Guaranty or which
would affect the legality, validity or enforceability of such
Guaranty.
9. Neither the execution and delivery of the Owner Participant
Documents, the consummation of the transactions therein contemplated
nor the fulfillment of or compliance with the terms, conditions and
other provisions thereof will conflict with, or result in any breach
of, any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Owner Participant, (ii) any order,
injunction or decree of any court or governmental instrumentality
binding upon the Owner Participant, (iii) the Certificate of
Incorporation or Bylaws of the Owner Participant, or (iv) any bond,
debenture, note, mortgage indenture or other agreement or instrument
to which the Owner Participant is now a party or by which the
property of the Owner Participant may be bound.
10. Neither the execution and delivery of the Guaranty, the
consummation of the transactions therein contemplated nor the
fulfillment of or compliance with the terms, conditions and other
provisions thereof will conflict with, or result in any breach of,
any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Guarantor, (ii) any order, injunction or
decree of any court or governmental instrumentality binding upon the
Guarantor, (iii) the Certificate of Incorporation or Bylaws of the
Guarantor, or (iv) any bond, debenture, note, mortgage indenture or
other agreement or instrument to which the Guarantor is now a party
or by which the property of the Guarantor may be bound.
I am a member of the bar of the State of New York, and I do
not purport to be conversant with, or to express any opinion herein
concerning, the laws of any jurisdiction other than those of the State of
New York and the United States of America and the General Corporation Law
of the State of Delaware. In addition, I express no opinion concerning the
laws of the State of New York, the United States of America or any other
jurisdiction applicable to the offering or sale of securities. Further, I
have made no investigation and express no opinion, as to any aviation law
or other laws, statutes, rules or regulations applicable due to the
particular nature of the equipment subject to the Lease.
This opinion is solely for the benefit of the addresses hereof
and their respective successors and assigns for use in connection with the
transactions contemplated by the Owner Participant Documents and may not be
relied upon by any other person or for any other purpose without my express
written consent. This opinion may be relied upon by Messrs. Simpson, Thacher
& ▇▇▇▇▇▇▇▇ in rendering their opinion of even date herewith.
Very truly yours,
▇▇▇▇▇ ▇. Rights
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(3)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Participation Agreement (Federal Express Corporation
Trust No. N672FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express Corporation, as Lessee, PMCC Leasing
Corporation, as Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee, and First Security, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent. Pursuant
to the Participation Agreement, one Airbus A300F4-605R aircraft bearing
U.S. Registration No. N672FE (the "Aircraft") is being financed. This
opinion is furnished pursuant to Section 4.01(k)(iv) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined are
used as defined in the Participation Agreement, except that references
herein to any instrument shall mean such instrument as in effect on the
date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Indenture;
(c) The Ancillary Agreement I;
(d) The Ancillary Agreement II:
(e) The Collateral Account Control Agreement;
(f) The Certificates; and
(g) The French Pledge Agreement;
(each of the documents identified in paragraphs (a) through (g) above are
collectively referred to as the "Indenture Trustee Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Indenture
Trustee Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers, and each of First
Security and the Indenture Trustee, as the case may be, has or had,
on the date of execution thereof, full corporate power, authority and
legal right to execute, deliver and perform each of the Indenture
Trustee Documents to which it is or is to be a party and to
authenticate the Certificates delivered on the Certificate Closing
Date.
2. Each of First Security and the Indenture Trustee, as the
case may be, has duly authorized, executed and delivered each
Indenture Trustee Document to which it is a party; each such document
constitutes a legal, valid and binding obligation of the Indenture
Trustee (and, to the extent set forth in the respective Indenture
Trustee Document, of First Security) enforceable against the
Indenture Trustee (and, to the extent set forth in the respective
Indenture Trustee Document, against First Security) in accordance
with its terms.
3. The Certificates issued and dated the Certificate Closing
Date have been duly authenticated and delivered by the Indenture
Trustee pursuant to the terms of the Indenture.
4. Neither the authorization, execution and delivery by the
Indenture Trustee or First Security, as the case may be, of the
Indenture Trustee Documents, nor the authentication and delivery by
the Indenture Trustee of the Certificates nor the fulfillment or
compliance by the Indenture Trustee or First Security with the
respective terms and provisions thereof nor the consummation of any
of the transactions by the Indenture Trustee or First Security, as
the case may be, contemplated thereby, requires the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any court or administrative
or governmental authority or agency of the State of Utah or the
United States of America governing the banking or trust powers of
First Security.
5. The execution, delivery and performance by the Indenture
Trustee or First Security, as the case may be, of each of the
Indenture Trustee Documents and the authentication and delivery of
the Certificates by the Indenture Trustee are not in violation of the
charter or by-laws of First Security or of any law, governmental
rule, or regulation of the State of Utah or the United States of
America governing the banking or trust powers of First Security or,
to our knowledge, of any indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term lease, license or other
agreement or instrument to which it is a party or by which it is
bound or, to our knowledge, of any judgment or order of the State of
Utah or the United States of America relating to the banking or trust
powers of First Security.
6. There are no fees, taxes or other governmental charges
payable by the Owner Trustee, the Indenture Trustee (except taxes
imposed on fees payable to First Security) or the Certificate Holders
to the State of Utah or any political subdivision thereof in
connection with the execution, delivery or performance of any of the
Operative Agreements or in connection with the issuance and
acquisition of the Certificates by the Certificate Holders or the
beneficial interests of the Certificate Holders in the Trust
Indenture Estate solely because First Security) (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. Neither the
Indenture Trustee nor the trust created under the Indenture will be
subject to any fee, tax or other governmental charge (except for
taxes imposed on fees payable to First Security) under the laws of
the State of Utah or any political subdivision thereof in existence
on the date hereof, on, based on or measured by, directly or
indirectly, the gross receipts, net income or value of the Trust
Indenture Estate solely because First Security (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. There is no fee,
tax or other governmental charge (except for taxes imposed on fees
payable to First Security) under the laws of the State of Utah or any
political subdivision thereof in existence on the date hereof, on,
based on or measured by any payments under the Certificates by reason
of the creation of the trust under the Indenture solely because First
Security (a) is incorporated under the laws of the State of Utah, (b)
has its principal place of business in the State of Utah, (c)
performs (in its individual capacity or as Indenture Trustee) any or
all of its duties under the Indenture Trustee Documents in the State
of Utah, and (d) engages in any activities unrelated to the
transactions contemplated by the Indenture Trustee Documents in the
State of Utah. We express no opinion as to whether or not any fees,
taxes or other charges are now or hereafter may be payable by the
Owner Participant to the State of Utah or any political subdivision
thereof in connection with (a) the execution, delivery or performance
by any of the Indenture, the Participation Agreement or any of the
other Operative Agreements and (b) the making by the Owner
Participant of its investment in the Aircraft.
7. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting First
Security or the Indenture Trustee, as the case may be, or any of its
properties in any court or before any administrative agency or
arbitrator, which, if adversely determined, would materially
adversely affect the ability of First Security or the Indenture
Trustee, as the case may be, to perform its obligations under any of
the Indenture Trustee Documents, and there are no pending or, to our
knowledge, threatened actions or proceedings before any court,
administrative agency or tribunal involving First Security or the
Indenture Trustee, as the case may be, in connection with the
transactions contemplated by any of the Indenture Trustee Documents.
The foregoing opinions are subject to the following
assumptions, exceptions and qualifications:
A. We are admitted to practice law in the State of Utah and we
do not hold ourselves out as being experts on the laws of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Utah, the federal laws of the United States of America governing the banking
and trust powers of First Security and Title II of the United States Code
entitled "Bankruptcy". However, we express no opinion with respect to (i)
federal securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) the Federal Aviation Act of 1958, as amended and (iii)
state securities or blue sky laws. Insofar as the foregoing opinions relate
to the validity and enforceability in the State of Utah of the Certificates
and the other Indenture Trustee Documents expressed to be governed by the laws
of the State of New York, we have assumed that the laws of New York are
identical to the laws of Utah in all material respects, and that the
Certificates and such Indenture Trustee Documents constitute legal, valid,
binding and enforceable documents or instruments under such laws (as to which
we express no opinion). No opinion is expressed as to the priority of any
security interest or as to title to any part of the Trust Estate.
B. The foregoing opinions regarding enforceability of any
document or instrument, are subject to (i) applicable bankruptcy, insolvency,
moratorium, reorganization, receivership and similar laws affecting the rights
and remedies of creditors generally, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than First Security and the
Indenture Trustee, of the Indenture Trustee Documents to which each is a party
and that each of such parties has the full power, authority and legal right to
execute and deliver each such document.
D. We have assumed that all signatures (other than those of
the Indenture Trustee or First Security) on documents and instruments
examined by us are genuine, that all documents and instruments submitted to
us as originals are authentic, and that all documents and instruments
submitted to us as copies conform with the originals, which facts we have
not independently verified.
E. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(4)(a)(i)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N6720FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No. N672FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N672FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this opinion to
you in accordance with Section 4.01 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the enforceability
of any particular provision of any of the Owner Trustee Documents
relating to remedies after default or as to the availability of any
specific or equitable relief of any kind. However, we are of the
opinion that, subject to the other limitations and qualifications
contained in this opinion, the remedies provided in the Owner Trustee
Documents, taken as a whole, are adequate for the realization of the
principal benefits or security of said agreements (except for the
economic consequences of procedural or other delay); and
(iv) the enforcement of any rights and the availability
of any specific or equitable relief of any kind may in all cases be
subject to an implied duty of good faith and to general principles of
equity (regardless of whether such enforceability or relief is
considered in a proceeding at law or in equity) and, as to any of
your rights to collateral security, will be subject to a duty to act
in a commercially reasonable manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has full corporate power, authority and legal right to execute,
deliver and perform its obligations under the Trust Agreement and, as
Owner Trustee under the Trust Agreement, to execute, deliver and
perform its obligations under the other Owner Trustee Agreements and
to issue, execute, deliver and perform its obligations under the
Certificate.
2. State Street has duly authorized, executed, and delivered
the Participation Agreement and the Trust Agreement and the
Participation Agreement and the Trust Agreement constitute the legal,
valid and binding obligation of State Street, enforceable against it
in its individual capacity in accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. To our knowledge, there exist no liens or encumbrances
affecting the right, title and interest of the Owner Trustee in and
to the Trust Estate resulting from claims against State Street not
related to the ownership of the Trust Estate or any other transaction
contemplated by the Operative Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
+▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N672FE) dated as of May 1, 1997 (the
"Indenture"), between First Security Bank, National Association
(the "Indenture Trustee"), and State Street Bank and Trust
Company of Connecticut, National Association, not in its
individual capacity, but solely as Owner Trustee (the "Owner
Trustee")
Ladies and Gentlemen:
We have acted as special Connecticut counsel to the Owner
Trustee in connection with the Indenture and the Collateral Account Control
Agreement dated as of May 1, 1997 (the "Control Agreement"), among the Owner
Trustee, the Indenture Trustee and State Street Bank and Trust Company, as
Custodian (the "Custodian").
We are issuing this opinion solely in our capacity as counsel
to the Owner Trustee under the circumstances set forth in this paragraph and
solely as to the matters set forth herein. Pursuant to the Indenture, the
Owner Trustee purports to grant to the Indenture Trustee a security interest,
inter alia, in those securities and instruments, presently owned or hereafter
acquired by the Owner Trustee, that are from time to time credited to an
account numbered [*****] (the "Collateral Account") established by the Owner
Trustee with the Custodian and which securities and instruments the Owner
Trustee has directed the Custodian to identify on the books and records of the
Custodian as being subject to a security interest in favor of the Indenture
Trustee to secure the payment to the Indenture Trustee of the Owner Trustee's
obligations (the "Obligations") under the Indenture. Those securities and
instruments which the Owner Trustee has directed the Custodian to so identify
on the books of the Custodian as being subject to such security interest, and
which, at the time of reference thereto, have not been withdrawn from such
identification or the Collateral Account, are hereinafter referred to,
collectively, as the "Liquid Collateral." We have assumed with your
permission for purposes of this opinion that the Liquid Collateral consists
solely of (a) "securities", either "uncertificated securities" or
"certificated securities", as each such term is defined in Section 8-102 of
the Uniform Commercial Code as currently in effect in the State of Connecticut
(the "Connecticut UCC"), (b) "instruments" (as such term is defined in Section
9-105(1)(i) of the Connecticut UCC) and (c) "general intangibles" (as such
term is defined in Section 9-106 of the Connecticut UCC).
For purposes of this opinion, we have examined the Indenture,
the Control Agreement and such other documents and instruments as are referred
to as having been examined by us for purposes of our opinion letter dated May
___,1997, addressed to the parties listed on Schedule A hereto.
As to all matters of fact, we have examined and have relied
entirely upon the representations and warranties contained in and made
pursuant to the Indenture and the Control Agreement, without any independent
investigation of any kind.
We have assumed the genuineness of all signatures (other
than those on behalf of the Owner Trustee and the Custodian), the
conformity to the originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form, and the legal competence of each individual
executing any document (other than on behalf of the Owner Trustee and the
Custodian).
For purposes of this opinion, we have made such examination of
law as we have deemed necessary. This opinion is limited solely to the
internal substantive laws of the State of Connecticut as applied by courts
located in the State of Connecticut and, where applicable, (i) the revised
Article 8 of the Uniform Commercial Code (with Conforming and Miscellaneous
Amendments to Articles 1, 3, 4, 5, 9 and 10) 1994 Official Text (the "Revised
Article 8") and (ii) the federal laws of the United States of America, in each
case without regard to choice of law. No opinion is given as to the choice of
law which any tribunal may apply to the transactions referred to herein.
Our opinion is further subject to the following exceptions,
qualifications and assumptions, all of which we understand to be acceptable to
you:
(a) We have assumed without any independent investigation
that each party to the transactions contemplated by the Indenture or
the Control Agreement at all times relevant thereto (other than the
Owner Trustee) was duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was
incorporated or organized, and had and has the full power, authority
and legal right under its certificate of incorporation, articles of
organization and other governing documents, corporate or other
enterprise legislation and applicable laws, as the case may be, to
execute and deliver and perform its obligations under all documents
executed by it in connection with those transactions.
(b) We have assumed without any independent investigation
(i) the due authorization, execution and delivery of each of the
Indenture and the Control Agreement by the Indenture Trustee, (ii)
that the execution, delivery and performance by the Indenture
Trustee of each of the Indenture and the Control Agreement does
not and will not conflict with, or result in a breach of, the
terms, conditions or provisions of, or result in a violation of,
or constitute a default or require any consent (other than such
consents as have been duly obtained) under, any organizational
document, any order, judgment, arbitration award or stipulation,
or any agreement, to which the Indenture Trustee is a party or is
subject or by which any of the properties or assets of the
Indenture Trustee is bound, (iii) that the Owner Trustee has
received "value," as defined under the Connecticut UCC, for the
incurrence of the Obligations, (iv) that, whenever the Custodian
receives instructions from the Owner Trustee for the Custodian to
note on its books and records that any securities or instruments
credited to the Collateral Account are to be subject to a security
interest in favor of the Indenture Trustee to secure the payment
of the Obligations, such instructions will have been duly
authorized by or on behalf of the Owner Trustee and (v) that, when
the Indenture Trustee is to act in connection with any of the
transactions contemplated by the Indenture, it is acting in its
capacity as Indenture Trustee.
(c) We have made no examination of, and no opinion is given
herein as to, the Owner Trustee's title to or other ownership rights
in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, the Liquid Collateral, other than the
security interest in favor of the Indenture Trustee as contemplated
by the Indenture and the Control Agreement, and have assumed that the
Owner Trustee has, or at the time of any purported attachment of the
security interest in the relevant Liquid Collateral will have, rights
in the Liquid Collateral.
(d) The perfection and the effect of perfection and
non-perfection of a security interest in the Liquid Collateral that
comprises "uncertificated securities" are, pursuant to Section
9-103(6) of the Connecticut UCC, and the effectiveness of
registration by the issuer and the rights and duties of the issuer
with respect to the registration of transfer, pledge or release of an
"uncertificated security" are, pursuant to Section 8-106 of the
Connecticut UCC, in each case, governed by the laws of the respective
jurisdictions of organization of the issuer or issuers of such
securities, including the conflict of laws rules of such
jurisdictions. Therefore, we express no opinion with respect to such
matters regarding "uncertificated securities" issued by issuers
organized outside of the State of Connecticut other than book-entry
Treasury securities referred to below.
(e) We point out that, pursuant to Part 357 of Title 31 of
the United States Code of Federal Regulations ("CFR"), with
respect to United States "book-entry Treasury securities"
maintained by a Federal Reserve Bank and, pursuant to other
relevant sections of the CFR, with respect to various other
securities issued or guaranteed by the federal government of the
United States or an agency thereof or a corporation sponsored
thereby and maintained by a Federal Reserve Bank, the perfection
of security interests granted by commercial, non-governmental
parties in book-entry Treasury securities, or such other federal
securities, as the case may be, held in a securities account of a
participant financial institution, such as the Custodian,
maintaining such account with such Federal Reserve Bank, will be
governed by the law of the jurisdiction determined in accordance
with Section 357.11 of Title 31 of the CFR. If that jurisdiction
has not adopted Revised Article 8, then such jurisdiction will be
deemed to have adopted Revised Article 8 for purposes of
determining the law governing such perfection. Accordingly,
although Revised Article 8 has not been enacted by Connecticut as
part of the Connecticut UCC, nevertheless, pursuant to Part 357 of
Title 31 of the CFR, Revised Article 8 governs the perfection of a
security interest in book-entry Treasury securities to the extent
that Connecticut law would otherwise be applicable thereto.
(f) We have also assumed that (i) any securities comprised in
the Liquid Collateral and held by Depository Trust Company or another
clearing corporation will be held by Depository Trust Company or such
other clearing corporation for the direct account of the Custodian
and not for the account of the Custodian through any other financial
intermediary, (ii) any securities comprised in the Liquid Collateral
and not constituting either (x) "certificated securities" (as defined
in Section 8-102 of the Connecticut UCC) for which the Custodian
physically holds the certificate or certificates evidencing solely
such securities, or (y) "uncertificated securities" (as defined in
Section 8-102 of the Connecticut UCC) for which the Custodian is the
registered owner on the books of the issuer solely of such
securities, will constitute, or will be held as part of, a fungible
bulk of such "securities" that are registered in the name of the
Custodian or are shown on the Custodian's account on the books of
another financial intermediary, (iii) any "certificated securities"
(as defined in Section 8-102 of the Connecticut UCC) comprised in the
Collateral, if held directly by the Custodian, will be at all times
in the physical possession of the Custodian, and any other
"instruments" (as defined in Section 9-105(1)(i) of the Connecticut
UCC) comprised in the Collateral will be at all times held directly
by and in the physical possession of the Custodian, and (iv) any
securities comprised in the Liquid Collateral consisting of
"book-entry Treasury securities" or other uncertificated federal
securities will be credited to a direct account of the Custodian with
a Reserve Bank (as such term is defined in the relevant section of
the CFR) and not for the account of the Custodian through a financial
intermediary.
(g) We do not express any opinion as to the attachment or
perfection of any security interest in (i) any securities that are
maintained with, or held on the system of, Cedel S.A., or any like
maintenance, clearing or settlement system operating outside of the
United States of America, (ii) any collateral of a type other than
"securities" or "general intangibles" (as defined in Section 9-106 of
the Connecticut UCC) or "instruments" (as defined in Section
9-105(1)(i) of the Connecticut UCC), (iii) the Collateral Account, to
the extent that the Collateral Account constitutes an asset, other
than general intangibles, separate from the property credited
thereto, (iv) any Liquid Collateral which, at the time of reference
thereto, is no longer identified as subject to a security interest
in favor of the Indenture Trustee or has otherwise been withdrawn from
the Collateral Account, or (v) any identifiable proceeds of any Liquid
Collateral (A) following the lapse of the ten day period set forth in
Section 9-306(3) of the Connecticut UCC, to the extent that such
proceeds do not constitute securities, instruments or general
intangibles in which a security interest is perfected in the manner
contemplated by this opinion, as if such proceeds were original
Liquid Collateral, (B) where such proceeds constitute securities and
in which proceeds a security interest is not perfected in the manner
contemplated by this opinion, as if such proceeds were original
collateral, or (C) where the proceeds constitute collateral which is
excluded from Article 8 or 9 of the Connecticut UCC.
(h) We express no opinion as to the priority of such security
interest over any other or competing interest in or claims against
such Liquid Collateral.
(i) We have assumed that (i) the Custodian, in the ordinary
course of business, accepts for deposit securities as a service for
its customers, maintains securities accounts in the names of such
customers reflecting ownership of or interests in such securities,
and, in regard to the transactions contemplated by the Indenture, is
acting in such capacity, (ii) all securities from time to time
credited to the Collateral Account and to be comprised in the Liquid
Collateral will have been "transferred" (within the meaning of
Section 8-313(1) of the Connecticut UCC) to the Custodian by the
issuers or prior holders of such Liquid Collateral, (iii) the records
of the Custodian indicate and will, at the time of reference thereto,
indicate that the aggregate amount of each security comprised in the
Liquid Collateral, together with all other such securities carried by
the Custodian for its customers and for its proprietary account, is
at least equal to the aggregate amount of such security carried by it
for its customers and for its proprietary account, (iv) the books and
records of the Custodian indicate and will, at the time of reference
thereto, indicate that the securities to be comprised in the Liquid
Collateral are registered on the books and records of the Custodian
as being for the beneficial account of the Owner Trustee, subject to,
as identified on such books and records, the security interest
therein in favor of the Indenture Trustee, and (v) the Custodian has
sent and, at the time of reference thereto, will have sent the
confirmations of such entries and identifications to the Indenture
Trustee and to Federal Express Corporation.
(j) In so far as our opinion relates to the enforceability
of any obligations of the Owner Trustee, the enforcement of such
obligations may be limited by bankruptcy, insolvency,
reorganization, moratorium, marshalling or other laws and rules of
law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights); and we express no opinion as to
(i) the status under Section 548 of the Bankruptcy Code and
applicable state fraudulent conveyance laws of the obligations of
the Owner Trustee under the Indenture or interests purported to be
granted pursuant to the Indenture, (ii) the enforceability of any
particular provision of the Indenture relating to remedies after
default or as to the availability of any specific or equitable
relief of any kind (and we point out that the enforcement of any
of your rights may in all cases be subject to an implied duty of
good faith and fair dealing and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity, and, as to any of your rights to
collateral security, will be subject to a duty to act in a
commercially reasonable manner) or (iii) the enforceability of any
particular provision of the Indenture relating to (A) waivers of
defenses, of rights to trial by jury, or rights to object to
jurisdiction or venue and other rights or benefits bestowed by
operation of law, (B) the effect of suretyship defenses, or
defenses in the nature thereof, with respect to obligations of any
applicable guarantor, joint obligator or surety, (C) waivers of
provisions which are not capable of waiver under Sections 1-102(3)
and 9-501(3) of the Connecticut UCC, (D) the grant of powers of
attorney to the Indenture Trustee, (E) exculpation clauses,
indemnity clauses and clauses relating to releases or waivers of
unmatured claims or rights, (F) interest or other charges that may
be usurious under applicable law, or (G) the collection of
interest on overdue interest or providing for a penalty rate of
interest or late charges on overdue or defaulted obligations.
However, notwithstanding the qualification set forth in the
foregoing clause (ii), and excluding the parenthetical in that
clause, subject to the other exceptions, qualifications and
limitations set forth in this opinion (including the parenthetical
in clause (ii) and subject to the fact that there may be economic
consequences arising out of any procedural or other delay on
account of the limitation or unenforceability of any particular
provision of the Indenture relating to remedies after default,
such limitation or unenforceability does not, in our judgment,
render the provisions of the Indenture and the Control Agreement
relating to remedies after default, taken as a whole, inadequate
for the practical realization of the benefits of enforcement of a
security interest in the Liquid Collateral following the receipt
by the Custodian of an enforcement notice properly given under the
Indenture and the Control Agreement by the Indenture Trustee to
the Custodian with respect to such Liquid Collateral.
(k) With respect to property as to which the security
interest purported to be granted pursuant to the Indenture
attaches after the date hereof, we call to your attention that
Section 552 of the Bankruptcy Code limits the extent to which
assets acquired by a debtor after the commencement of a case under
the United States Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by the
debtor before the commencement of such case. We further call to
your attention that under Section 547 of the Bankruptcy Code, a
security interest that attaches within the relevant period set
forth in Section 547(b)(4) of the Bankruptcy Code may be avoidable
under certain circumstances.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Indenture Trustee has, under the terms of the
Connecticut UCC and, in the case of book-entry Treasury
securities, under the CFR, a perfected security interest in the
Liquid Collateral that constitutes "securities" (as such term is
defined in Section 8-102 of the Connecticut UCC), or "instruments"
(as defined in Section 9-105(1)(i) of the Connecticut UCC), and in
the identifiable proceeds thereof to secure the payment of the
Obligations.
2. The Indenture creates, under the terms of the Connecticut
UCC, a valid security interest in such of the Liquid Collateral that
constitutes "general intangibles" (as such term is defined in Section
9-106 of the Connecticut UCC) and in the identifiable proceeds
thereof to secure the payment of the Obligations. Upon the filing of
a financing statement on form UCC-1 pursuant to the Connecticut UCC
with the Secretary of State of the State of Connecticut naming the
Owner Trustee as Debtor and the Indenture Trustee as Secured Party
and accurately describing the Liquid Collateral and the Collateral
Account, which filing has been duly effected, such security interest
will be perfected (to the extent that the perfection of a security
interest in the Liquid Collateral can be accomplished by the filing
in Connecticut of financing statements under the Connecticut UCC).
We point out that:
(a) The effectiveness of a financing statement will lapse (i)
on the expiration of a five-year period from their dates of filing,
or (if later) five years from the last date as to which such
financing statements were effective following the proper filing of
continuation statements with respect thereto, unless continuation
statements are filed within six months prior to the expiration of the
applicable five-year period, (ii) with respect to general intangibles
in which a security interest has been perfected by the filing of a
financing statement in the jurisdiction of the location of the
debtor, for a period of more than four months after the debtor has
changed its location from that jurisdiction to a new jurisdiction
unless such security is perfected in the new jurisdiction within the
earlier to occur of the end of such four month period or the date on
which such financing statement would have otherwise lapsed, and (iii)
with respect to "investment property," under and as defined in
Revised Article 8, in which a security interest has been perfected by
the filing of a financing statement in the jurisdiction of the
location of the debtor, from the time that the debtor changes its
location from that jurisdiction to a new jurisdiction unless such
security interest is perfected in the new jurisdiction on or before
the time of such change of location.
(b) If any debtor changes its name, identity or corporate
structure such that any financing statement becomes misleading, such
financing statement will be ineffective to perfect a security
interest in any collateral acquired by such debtor more than four
months after such change.
We assume no obligation to update this opinion as a result of
any change in any fact, circumstance or statute or other rule of law
occurring after the date hereof.
This opinion is delivered to you solely in connection with the
transactions referred to herein and for your sole use and no other
person or entity may rely on this opinion without our express written
consent.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(4)(a)(ii)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Delivery Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No. N672FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N672FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this Opinion to
you in accordance with Section 4.02 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the
enforceability of any particular provision of any of the Owner
Trustee Documents relating to remedies after default or as to the
availability of any specific or equitable relief of any kind.
However, we are of the opinion that, subject to the other
limitations and qualifications contained in this opinion, the
remedies provided in the Owner Trustee Documents, taken as a
whole, are adequate for the realization of the principal benefits
or security of said agreements (except for the economic
consequences of procedural or other delay); and
(iv) the enforcement of any rights and the
availability of any specific or equitable relief of any kind may
in all cases be subject to an implied duty of good faith and to
general principles of equity (regardless of whether such
enforceability or relief is considered in a proceeding at law or
in equity) and, as to any of your rights to collateral security,
will be subject to a duty to act in a commercially reasonable
manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has or had, on the date of execution thereof, full corporate power,
authority and legal right to execute, deliver and perform its
obligations under the Trust Agreement and, as Owner Trustee under the
Trust Agreement, to execute, deliver and perform its obligations
under the other Owner Trustee Agreements and to issue, execute,
deliver and perform its obligations under the Certificate.
2. State Street has or had, on the date of execution thereof,
duly authorized, executed, and delivered the Participation Agreement
and the Trust Agreement and the Participation Agreement and the Trust
Agreement constitute the legal, valid and binding obligation of State
Street, enforceable against it in its individual capacity in
accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. The Owner Trustee has received such title to the Aircraft
as has been conveyed to it subject to the rights of the Owner Trustee
and the Lessee under the Lease and the security interest created
pursuant to the Indenture and the Lease; and to our knowledge, there
exist no liens or encumbrances affecting the right, title and
interest of the Owner Trustee in and to the Trust Estate resulting
from claims against State Street not related to the ownership of the
Trust Estate or any other transaction contemplated by the Operative
Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(5)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Pass Through Trust Agreement dated as of May 1, 1997
(the "Pass Through Trust Agreement"), as supplemented by the Series
Supplements dated the date hereof between Federal Express Corporation and
the First Security, not in its individual capacity, except as otherwise
stated, but solely as Pass Through Trustee, designated as Series Supplement
1997-1-A, 1997-1-B and 1997-1-C, respectively (the "Series Supplements")
and the Participation Agreement (Federal Express Corporation Trust No.
N672FE), dated as of May 1, 1997 (the "Participation Agreement"), among
Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent. Pursuant to the Participation
Agreement, one Airbus A300F4-605R aircraft bearing U.S. Registration No.
N672FE (the "Aircraft") is being financed. This opinion is furnished
pursuant to Section 4.01(k)(iv) of the Participation Agreement.
Capitalized terms used herein and not otherwise defined are used as defined
in the Participation Agreement, except that references herein to any
instrument shall mean such instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Pass Through Trust Agreement;
(b) The Series Supplements;
(c) The Pass Through Certificates;
(d) The Participation Agreement;
(e) The Intercreditor Agreement; and
(f) Each Liquidity Facility.
(each of the documents identified in paragraphs (a) through (e) are being
collectively referred to as the "Pass Through Trustee Documents" and each of
the documents identified in paragraphs (d) through (f) are being collectively
referred to as the "Subordination Agent Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Pass Through
Trustee Documents or the Subordination Agent Documents, as the case may be.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
With respect to the opinions set forth in paragraph 8 above,
with your permission we have relied upon, and this opinion is limited by, the
assumptions set forth in the discussion entitled "Certain Utah Taxes" in the
Prospectus Supplement to the Prospectus forming part of Registration Number
No. 333-07691 (the "Registration Statement") for the registration of the Pass
Through Certificates with the Securities and Exchange Commission. We express
no opinion as to the correctness of the foregoing assumptions and we have
conducted no independent investigation in this regard.
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers.
2. Each of First Security, the Pass Through Trustee and the
Subordination Agent, as the case may be, has or had, on the date of
execution thereof, full corporate power, authority and legal right to
execute, deliver and perform each of the Pass Through Trustee
Documents and the Subordination Agent Documents, as the case may be,
and to authenticate the Pass Through Certificates delivered on the
Certificate Closing Date.
3. Each of First Security, the Pass Through Trustee and the
Subordination Agent has duly authorized, executed and delivered each
Pass Through Trustee Document or Subordination Agent Document, as the
case may be; each such document constitutes a legal, valid and
binding obligation of the Pass Through Trustee or the Subordination
Agent, as the case may be (and, to the extent set forth in the
respective Pass Through Trustee Document or Subordination Agent
Document, of First Security) enforceable against the Pass Through
Trustee or the Subordination Agent, as the case may be (and, to the
extent set forth in the respective Pass Through Trustee Document or
Subordination Agent Document, against First Security) in accordance
with its terms.
4. The Pass Through Certificates issued and dated the
Certificate Closing Date have been duly authorized and validly
executed, issued, delivered and authenticated by the Pass Through
Trustee pursuant to the Pass Through Trust Agreement and the Series
Supplements; and the Pass Through Certificates acquired by the
Underwriters under the Underwriting Agreement are enforceable against
the Pass Through Trustee and are entitled to the benefits of the
related Pass Through Trust Agreement and the related Series
Supplements.
5. No order, license, consent, permit, authorization or
approval of or exemption by, and no notice to or filing with, or the
taking of any other action in respect of, any Utah or Federal
governmental authority governing the banking or trust powers of First
Security, the Pass Through Trustee or the Subordination Agent, and no
filing, recording, publication or registration in any public office
is required under Utah or Federal law pertaining to its banking or
trust powers for the due execution, delivery or performance by First
Security, individually or as Pass Through Trustee or Subordination
Agent, as the case may be, of the Pass Through Trustee Documents
(other than the Pass Through Trust Agreement) or the Subordination
Agent Documents, as the case may be, and of the certificate of
authentication, as Pass Through Trustee, on the Pass Through
Certificates, or for the legality, validity, binding effect or
enforceability thereof against First Security, the Pass Through
Trustee or the Subordination Agent, as the case may be.
6. The execution, delivery and performance by the Pass
Through Trustee or First Security, as the case may be, of each of
the Pass Through Documents and the Subordination Agent or First
Security, as the case may be, of each of the Subordination Agent
Documents, and the issuance, execution, delivery and performance
of the Pass Through Certificates by the Pass Through Trustee are
not or were not, on the date of execution thereof, in violation of
the charter or by-laws of First Security or of any law,
governmental rule, or regulation of the State of Utah or the
United States of America governing the banking or trust powers of
First Security or, to our knowledge, of any indenture, mortgage,
bank credit agreement, note or bond purchase agreement, long-term
lease, license or other agreement or instrument to which it is a
party or by which it is bound or, to our knowledge, of any
judgment or order of the State of Utah or the United States of
America relating to the banking or trust powers of First Security.
7. There are no actions, suits, investigations or
proceedings pending or, to our knowledge, threatened against or
affecting First Security, the Pass Through Trustee or the
Subordination Agent or any of its properties in any court or
before any administrative agency or arbitrator, which, if
adversely determined, would materially adversely affect the
ability of First Security, the Pass Through Trustee or the
Subordination Agent, as the case may be, to perform its
obligations under any of the Pass Through Trustee Documents or the
Subordination Agent Documents, as the case may be, and there are
no pending or, to our knowledge, threatened actions or proceedings
before any court, administrative agency or tribunal involving
First Security, the Pass Through Trustee or the Subordination
Agent in connection with the transactions contemplated by any of
the Pass Through Trustee Documents or the Subordination Agent
Documents, as the case may be.
8. Neither the trusts created by the Pass Through Trust
Agreement and the Series Supplements nor the Pass Through Trustee,
in its individual or trust capacity, as the case may be, nor their
respective Affiliates, successors or assigns, will be subject to
any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or
doing business tax), fee or other governmental charge under the
laws of the State of Utah or any political subdivision thereof
(other than taxes imposed on the fees received by State Street
Bank and Trust Company for acting as Pass Through Trustee under
the Series Supplements). Certificate holders who are not
residents of or otherwise subject to tax in Utah will not be
subject to any tax (including, without limitation, net or gross
income, tangible or intangible property, net worth, capital,
franchise or doing business tax), fee or other governmental charge
under the laws of the State of Utah or any political subdivision
thereof as a result of purchasing, owning (including receiving
payments with respect to) or selling a Pass Through Certificate.
There are no applicable taxes under the laws of the State of Utah
or any political subdivision thereof upon or with respect to (a)
the construction, mortgaging, financing, refinancing, purchase,
acquisition, acceptance, rejection, delivery, nondelivery,
transport, location, ownership, insurance, control, assembly,
possession, repossession, operation, use, condition, maintenance,
repair, sale, return, abandonment, replacement, preparation,
installation, storage, redelivery, manufacture, leasing,
subleasing, modification, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application
or disposition of the Aircraft or any interest in any thereof, (b)
payments of Rent or other receipts, income or earnings arising
therefrom or received with respect to the Aircraft or any interest
in any thereof or payable pursuant to the Lease, (c) any amount
paid or payable pursuant to any Operative Agreements, (d) the
Aircraft or any interest therein or the applicability of the Lease
to the Aircraft or any interest in any thereof, (e) any or all of
the Operative Agreements, any or all of the Pass Through
Certificates or any interest in any or all thereof or the
offering, registration, reregistration, issuance, acquisition,
modification, assumption, reissuance, refinancing or refunding of
any or all thereof, and any other documents contemplated thereby
and amendments or supplements hereto and thereto, (f) the payment
of the principal of, or interest or premium on, or other amounts
payable with respect to, any or all of the Pass Through
Certificates, whether as originally issued or pursuant to any
refinancing, refunding, assumption, modification or reissuance, or
any other obligation evidencing any loan in replacement of the
loan evidenced by any or all of the Pass Through Certificates, or
(g) otherwise with respect to or in connection with the
transactions contemplated by the Pass Through Trust Agreement, the
Series Supplements, the Pass Through Certificates and the
Operative Agreements, which would not have been imposed if the
Pass Through Trustee had not had its principal place of business
in, had not performed (either in its individual capacity or as
Pass Through Trustee) any or all of its administrative duties
under the Pass Through Trust Agreement, the Series Supplements,
the Pass Through Certificates and the Operative Agreements in, and
had not engaged in any activities unrelated to the transactions
contemplated by the Pass Through Trust Agreement, the Series
Supplements, the Pass Through Certificates and the Operative
Agreements in, the State of Utah.
9. Each of the Certificates to be delivered to and registered
in the name of the Subordination Agent on the date hereof pursuant to
the Participation Agreement and the Intercreditor Agreement will be
held by the Subordination Agent in trust for the Pass Through Trustee
under the applicable Pass Through Trust Agreement.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(a)
[Letterhead of Kredietbank N.V.]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
I am the manager of the Legal Department of Kredietbank N.V.
("Kredietbank") and have advised Kredietbank and its New York Branch (the
"Branch") in connection with (i) the Irrevocable Revolving Credit Agreement
Class A Certificates, dated as of May 1, 1997 (the "Class A Liquidity
Agreement"), between the Branch and First Security Bank, National
Association, a national banking association, as Subordination Agent under
the Intercreditor Agreement, defined below, and as agent and trustee for
the Federal Express Corporation Pass Through Trust 1997-1-A, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement"), between the Branch and
First Security Bank, National Association, a national banking association,
as Subordination Agent under the Intercreditor Agreement, defined below,
and as agent and trustee for the Federal Express Corporation Pass Through
Trust 1997-1-B (the "Intercreditor Agreement" and, together with the
Liquidity Agreements, the "Liquidity Documents"), and (iii) the
Intercreditor Agreement, dated as of May 1, 1997 (the "Intercreditor
Agreement"), among the Branch, First Security Bank, National Association,
as Pass Through Trustee and as Subordination Agent (the Liquidity
Agreements and the Intercreditor Agreement are hereinafter collectively the
"Liquidity Documents").
Capitalized terms herein which are undefined have the meanings
assigned to them in the Liquidity Documents.
I am rendering this opinion in my capacity as manager of the
Legal Department and without being personally liable to any extent for the
opinions expressed herein.
In connection with the opinions hereinafter given, I have
examined a copy of each of the Liquidity Documents and such other
certificates, documents, agreements and instruments as I have deemed
necessary as a basis for the opinions expressed below.
In such examination, I have assumed the genuineness of all
signatures, the authenticity of all agreements, certificates, instruments and
documents submitted to me as originals, and the conformity to the originals of
all agreements, certificates, instruments and documents submitted to me as
copies. As to questions of fact material to the opinions expressed below, I
have, when relevant facts were not independently established by me, examined
and relied upon representations of officers of Kredietbank.
Based upon the foregoing examination and assumptions, and
subject to the qualifications set forth below, I am of the opinion that:
1. Kredietbank is duly organized and validly existing as a
Belgian public law banking institution under the law of Belgium and
has full power and authority (corporate and otherwise) to execute,
deliver and perform the Liquidity Documents.
2. [▇▇▇ ▇▇▇▇▇] or [▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇], acting together with
[▇▇▇▇ ▇▇▇▇▇▇▇], if acting for and on behalf of the Branch, are
duly authorized by Kredietbank to execute and deliver the
Liquidity Documents for and on behalf of the Branch. Assuming
each of the Liquidity Documents has been duly executed and
delivered for and on behalf of the Branch by such persons, no
further authorization by or any corporate action of Kredietbank is
required in connection with the execution, delivery and
performance thereof.
3. The governing-law clause, subjecting the Liquidity
Documents to New York law, is valid under Belgian law.
(i) Under Belgian law, New York law will be applied to an
agreement, such as the Liquidity Documents, which under Belgian
law has been validly subjected to New York laws.
(ii) (a) None of the terms of the Liquidity Documents
is irreconcilable with important principles of Belgian law,
and (b) there are no mandatory provisions of Belgian law
which must be applied to the transactions covered by the
Liquidity Documents.
(iii) Each of the Liquidity Documents constitutes the
legal, valid and binding obligation of Kredietbank,
enforceable against Kredietbank in accordance with its
terms, the rules of civil procedures of Belgium and the
applicable provisions of the chosen law of New York.
4. No authorization, consent, approval or other action by,
and no notice to or filing with, any governmental, administrative
or other authority or court of Belgium is required for the
execution or delivery of the Liquidity Documents by Kredietbank
through the Branch or for the performance by Kredietbank or by the
Branch of the Liquidity Documents.
5. The execution, delivery and performance of the Liquidity
Documents by Kredietbank or the Branch will not result in any
violation by Kredietbank or by the Branch of any law of Belgium.
6. The contractual obligations incurred by virtue of the
execution and delivery of the Liquidity Documents for and on behalf
of the Branch are the obligations of Kredietbank, and Kredietbank has
no defenses against the performance of such obligations which are
based on the fact that Kredietbank had acted through the Branch in
executing and delivering the Liquidity Documents.
7. If a final and conclusive judgment of the Supreme Court of
the State of New York, New York County, or of the Untied States
District Court for the Southern District of New York for a definite
sum for the recovery of amounts due and unpaid under the Liquidity
Documents were to be rendered against Kredietbank, a reexamination or
relitigation on the merits of the subject matter thereof in
accordance with Article 570 of the Belgian Judicial Code would be
necessary in order to obtain recognition and/or enforcement of such
judgment in Belgium.
8. The obligations of Kredietbank under the Liquidity
Documents rank at least equal in priority of payment and in all
other respects with its obligations to pay any other unsecured and
unsubordinated obligations of Kredietbank for borrowed money,
including deposit liabilities, that are not expressly preferred by
law.
The foregoing opinions are subject to the following
qualifications:
(i) The opinion in paragraph (3) with respect to
enforceability is subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws affecting creditors' rights generally, applicable to
Kredietbank and to any law or general principle of law from
time to time in effect in Belgium that could be considered by
the Belgian Courts as a provision of public policy.
(ii) In giving the opinions in paragraphs (3)(iii), (6) and
(8), I have assumed, with your consent, that each of the
Liquidity Documents is legal, valid and binding under New York
law, all as set forth more fully in the opinion dated of even
date herewith of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ issued in
connection with the Liquidity Documents.
(iii) No opinion is expressed with respect to the law of any
jurisdiction other than the law of Belgium.
This opinion is being furnished to you solely for your benefit
in connection with the transactions described above and may not be used,
circulated, quoted or otherwise referred to for any other purpose without my
express written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(b)
[Letterhead of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
We have acted as special New York counsel to Kredietbank
N.V., New York Branch (herein called the "Liquidity Provider") in
connection with the transactions contemplated by (i) the Irrevocable
Revolving Credit Agreement Class A Certificates, dated as of May 1, 1997
(the "Class A Liquidity Agreement"), between the Liquidity Provider and
First Security Bank, National Association, as Subordination Agent under the
Intercreditor Agreement, as defined below, as agent and trustee for the
Federal Express Corporation 1997-1-A Pass Through Trust, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement" and, together with the Class
A Liquidity Agreement, the "Liquidity Agreements"), between the Liquidity
Provider and First Security Bank, National Association, as Subordination
Agent under the Intercreditor Agreement, as defined below, as agent and
trustee for the Federal Express Corporation 1997-1-B Pass Through Trust,
and (iii) the Intercreditor Agreement, dated as of May 1, 1997 (the
"Intercreditor Agreement" and, together with the Liquidity Agreements, the
"Liquidity Documents"), among the Liquidity Provider and First Security
Bank, National Association, as Pass Through Trustee and as Subordination
Agent. Capitalized terms used herein but not otherwise defined herein
shall have the meanings provided in the Liquidity Documents.
In rendering the opinion expressed below, we have examined
the Liquidity Documents, the opinion dated the date hereof of ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Esq., manager of the Legal Department of Kredietbank N.V., and such
other documents as we have deemed necessary.
In our examination, we have assumed the authenticity of all
documents submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies. When relevant
facts were not independently established, we have relied upon representations
made in or pursuant to the Liquidity Documents.
In rendering the opinion expressed below, we have assumed, with
respect to each Liquidity Document, that:
(i) it has been duly authorized by, has been duly executed and
delivered by, and (except to the extent set forth in the
opinion below as to the Liquidity Provider) constitutes
legal, valid, binding and enforceable obligations of all of
the parties thereto;
(ii) all signatories thereto have been duly authorized; and
(iii) all of the parties thereto are duly organized and validly
existing and have the power and authority (corporate,
partnership, trust or other) to execute, deliver and perform
thereunder.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinion
expressed below, we are of the opinion that each Liquidity Document
constitutes the legal, valid and binding obligation of the Liquidity
Provider, enforceable against the Liquidity Provider in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or other similar laws
relating to or affecting the rights of creditors generally and except as
the enforceability of such Liquidity Document is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality, reasonableness,
good faith and fair dealing.
The foregoing opinion is subject to the following comments and
qualifications:
(A) The enforceability of provisions in the Liquidity
Documents to the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances.
(B) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which the Liquidity Provider is located (other
than New York) that limit the interest, fees or other charges the
Liquidity Provider may impose for the loan or use of money or other
credit, (ii) Section 7.11(a)(i) of each Liquidity Agreement and
Section 10.11(a)(i) of the Intercreditor Agreement, insofar as such
Sections relate to the subject matter jurisdiction of a Federal court
sitting in New York, New York to adjudicate any controversy related
to the Liquidity Documents, (iii) the waiver of inconvenient forum
set forth in Section 7.11(a)(ii) of each Liquidity Agreement and
Section 10.11(a)(ii) of the Intercreditor Agreement with respect to
proceedings in a Federal court sitting in New York, New York and a
State court of the State of New York and (iv) the waiver of immunity
set forth in Section 10.11(c) of the Intercreditor Agreement with
respect to proceedings in a Federal court sitting in New York, New
York and a State court of the State of New York.
The foregoing opinion is limited to matters involving the
Federal laws of the United States of America and the law of the State of
New York, and we do not express any opinion as to the laws of any other
jurisdiction. In particular, we do not express any opinion as to the laws
of Belgium and, to the extent such laws may be relevant to the opinion
expressed herein, we have, with your permission, relied upon the
aforementioned opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal
Department of Kredietbank N.V., without independently considering the
matters covered thereby, and our opinion is subject to all limitations,
exceptions and qualifications contained therein as if set forth herein in
full.
At the request of the Liquidity Provider, this opinion letter is
provided to you by us in our capacity as special New York counsel to the
Liquidity Provider, and this opinion letter may not be relied upon by any
Person for any purpose other than in connection with the transactions
contemplated by the Liquidity Documents without, in each instance, our prior
written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(7)
[Letter of General Electric Company]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N672FE
Reference is made to (i) that certain Participation Agreement
(Federal Express Corporation Trust No. N672FE), dated as of May 1, 1997
(the "Participation Agreement") by and among Federal Express Corporation,
as Lessee ("Fed Ex"), PMCC Leasing Corporation, as Owner Participant, State
Street Bank and Trust Company of Connecticut, National Association ("SSB")
(not in its individual capacity, except as otherwise expressly set forth
therein, but solely as Owner Trustee), First Security Bank, National
Association ("FSB") (not in its individual capacity, except as otherwise
expressly set forth therein, but solely as Indenture Trustee, Pass Through
Trustee and Subordination Agent); (ii) that certain Purchase Agreement
Assignment (Federal Express Corporation Trust No. N672FE), dated as of May
1, 1997 (the "Purchase Agreement Assignment") between Fed Ex, as Lessee and
SSB, as Lessor; (iii) that certain Lease Agreement (Federal Express
Corporation Trust No. N672FE), dated as of May 1, 1997 (the "Lease")
between SSB (not in its individual capacity, but solely as Owner Trustee),
as Lessor and Fed Ex, as Lessee; (iv) that certain Trust Indenture and
Security Agreement (Federal Express Corporation Trust No. N672FE), dated
as of May 1, 1997 (the "Trust Indenture") between SSB (not in its
individual capacity), as Owner Trustee and FSB (not in its individual
capacity), as Indenture Trustee; and (v) that certain Trust Agreement
(Federal Express Corporation Trust No. N672FE), dated as of May 1, 1997
(the "Trust Agreement") between SSB (not in its individual capacity), as
Owner Trustee and PMCC Leasing Corporation, as Trustor.
I am an attorney employed by General Electric Company, a New York
corporation (the "Engine Manufacturer") and as such have acted as counsel
for the Engine Manufacturer in connection with the execution and delivery
by the Engine Manufacturer of the Consent (the "Consent"), and the Engine
Warranty Assignment (Federal Express Corporation Trust No. N672FE) (the
"Engine Warranty Assignment"), each attached to the Participation Agreement
as Exhibit F and dated as of May 1, 1997. The Consent and the Engine
Warranty Assignment covers two GE CF6-80C2-A5F series engines bearing
Engine Manufacturer's serial numbers ___-___ and ___-___, respectively. In
this connection, I have, or an attorney under my supervision has, reviewed
such documents as I have deemed necessary for the purpose of this opinion,
including, but without limiting the generality of the foregoing, the
General Terms Agreement No. 6-9034, dated as of July 3, 1991 between the
Engine Manufacturer and Fed Ex (the "General Terms Agreement"), the Engine
Product Support Plan forming a part thereof (the "Engine Product Support
Plan"), the Participation Agreement, the Purchase Agreement Assignment, the
Lease, the Trust Indenture and the Trust Agreement.
In making such examinations, I have relied upon the accuracy of
original, certified, conformed, photocopied or telecopied copies of such
records, agreements, certificates and other documents as I have deemed
necessary or appropriate to enable me to render the opinions expressed
herein. In all such examinations, I have assumed the genuineness of
signatures on original documents and the conformity to such original
documents of all copies submitted to me as certified, conformed,
photocopied or telecopied copies, and as to certificates and telegraphic
and telephonic confirmations given by public officials, I have assumed the
same to have been properly given and to be accurate. As to various
questions of fact material to such opinions, I have relied, when such
relevant facts were not independently established by me, solely upon the
accuracy of the statements, representations and warranties made in the
Participation Agreement, the Purchase Agreement Assignment, the Lease, the
Trust Indenture and the Trust Agreement.
With your consent, and for the purposes of this opinion, I have
assumed (other than with respect to the Engine Manufacturer), the accuracy of
the following matters, but I have not made any independent investigation or
inquiry with respect thereto and I render no opinion on such matters:
(a) each of the Participation Agreement, the Purchase
Agreement Assignment, the Lease, the Trust Indenture, and the Trust
Agreement have been duly and validly authorized, executed and
delivered by all parties thereto and constitutes the legal, valid and
binding obligations of each of such parties in accordance with the
respective terms thereof; and
(b) the respective parties to the Participation Agreement,
the Purchase Agreement Assignment, the Lease, the Trust Indenture,
and the Trust Agreement have obtained, and there are in full force
and effect, any and all federal, state, local or foreign
governmental agencies and authorities in connection with the
transactions contemplated thereby, to the extent necessary for the
legality, validity and binding effect or enforceability of the
Consent and the Engine Warranty Assignment.
Based upon the foregoing, and subject to the specific assumptions,
qualifications and reliances herein set forth, and on the basis of my
consideration of such facts and law as I have deemed necessary for purposes of
this letter, it is my opinion that:
(1) The Engine Manufacturer has the full corporate power,
authority and the legal right to enter into and perform its
obligations under the General Terms Agreement, the Consent and the
Engine Warranty Assignment. The execution, delivery and
performance by the Engine Manufacturer of each of the General
Terms Agreement, the Consent and the Engine Warranty Assignment
was duly authorized by all necessary corporate action on the part
of the Engine Manufacturer.
(2) Each of the General Terms Agreement, the Consent and
Engine Warranty Assignment has been duly authorized, executed and
delivered by and constitutes a legal, valid and binding obligation of
the Engine Manufacturer, enforceable against the Engine Manufacturer
in accordance with the respective terms thereof, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general equity principles.
(3) The Engine Product Support Plan insofar as it relates to
the Engine Warranties (as such term is defined in the Engine Warranty
Assignment), constitutes a legal, valid and binding obligation of the
Engine Manufacturer, enforceable against the Engine Manufacturer in
accordance with the terms thereof, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general equity principles.
The foregoing opinions are limited to the laws of the State
of New York and the federal laws of the United States of America, but no
opinion is expressed as to matters governed by the Transportation Code, or
by any other law, statute, rule or regulation of the United States relating
to the acquisition, ownership, registration, use, operation, maintenance,
repair, replacement or sale of aircraft. Further, no opinion is expressed
as to title to any engines or other property.
This opinion is furnished by me at your request for your
sole benefit and no other person or entity shall be entitled to rely on
this opinion without our express written consent. My opinion is limited to
the matters stated herein and no opinion is implied or may be inferred
beyond the matters expressly stated herein.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(8)
[Letterhead of ▇▇▇▇▇▇▇▇ Chance]
[Delivery Date]
To The Opinion Addressees referred to in Schedule A hereof
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
We are special French counsel for Airbus Industrie G.I.E.
("Airbus") and AVSA S.A.R.L. ("AVSA") and you have asked for our opinion
in connection with certain transactions contemplated in the Participation
Agreement (Federal Express Corporation Trust No. N672FE), dated as of May
1, 1997 (the "Participation Agreement") among Federal Express Corporation,
as Lessee ("Federal Express"), PMCC Leasing Corporation, as Owner
Participant ("Owner Participant"), State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee ("Owner Trustee"), First
Security Bank, National Association, not in its individual capacity, except
as otherwise stated, but solely as Indenture Trustee ("Indenture Trustee"),
Pass Through Trustee and Subordination Agent, and relating to the Aircraft
to be operated by Federal Express.
This opinion is being delivered pursuant to Section 4.02(m)(x)
of the Participation Agreement.
Capitalized terms used in this opinion and not otherwise
defined shall have the meaning assigned thereto in the Participation
Agreement.
We have examined:
(i) a copy of an Airbus A300-600R Freighter Purchase Agreement
dated as of July 3, 1991 and made between AVSA and Federal
Express with an executed Consent and Guaranty of Airbus of
same date attached thereto, sent to us by facsimile by
AINA Holdings Inc. ("AINA") on April 27, 1994;
(ii) a copy sent to us by facsimile by ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ on
_________________ of an executed Purchase Agreement
Assignment dated as of May 1, 1997 (the "Purchase
Agreement Assignment") made between Federal Express and
the Owner Trustee;
(iii) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie Consent and
Agreement to the Purchase Agreement Assignment;
(iv) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated AVSA Consent and Agreement to
the Purchase Agreement Assignment;
(v) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Warranty ▇▇▇▇ of Sale, relating
to the Aircraft and transferring title therein from AVSA
to the Owner Trustee ("AVSA Warranty ▇▇▇▇ of Sale");
(vi) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie G.I.E.
Warranty, in favour of the Participants (the "Airbus
Warranty") warranting AVSA's Warranty ▇▇▇▇ of Sale;
(vii) a copy sent to us by facsimile by AVSA on _________________
of an undated FAA ▇▇▇▇ of Sale executed by AVSA in favour
of the Owner Trustee;
(viii) a copy sent to us by facsimile by AVSA on May 3, 1995 of an
executed power of attorney dated September 1, 1994 appointing
Messrs. ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, acting singly, as
attorneys-in-fact of ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
("Administrateur Gerant") of Airbus;
(ix) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing ▇.▇ ▇▇▇▇▇▇▇ as attorney-in-fact of ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant") of
Airbus;
(x) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing Xavier de Rouville as attorney-in-fact of ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant")
of Airbus;
(xi) a copy sent to us by courier by AVSA on September 15, 1995 of
an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇▇▇ Lascaux and ▇▇. ▇▇▇▇▇▇▇ O. de
Coninck, acting singly, as attorneys-in-fact of ▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of
AVSA; and
(xii) a copy sent to us by courier by AVSA on September 15, 1995
of an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇▇▇
Lascaux, Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇,
acting singly, as attorneys-in-fact of ▇▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of AVSA.
(the documents referred to in paragraphs (i) to (xii) being referred to herein
as the "Documents").
Based on the foregoing, and such other documents, records
and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, and assuming the Documents to have been duly
executed by the parties thereto (other than Airbus and AVSA), the
genuineness of all signatures and the completeness and conformity to the
originals of all documents supplied to us as copies or as facsimiles, we
are of the opinion that, subject to the qualifications set out below:
1. Airbus is a groupement d'interet economique duly organized and
existing under the laws of the French Republic, and has the
power and authority to carry on its business as now conducted.
The present members of Airbus are (i) Aerospatiale, Societe
Nationale Industrielle, (ii) Daimler-Benz Aerospace Airbus
GmbH, (iii) British Aerospace (Operations) Ltd. and (iv)
Construcciones Aeronauticas S.A., and each of such corporations
is, without the need to proceed against any collateral security
for the indebtedness of Airbus or to take any other legal
action or process (except for service on Airbus by huissier of
notice to perform and subsequent failure by Airbus to do so),
jointly and severally liable with the other members for the
debts of Airbus arising out of obligations contracted by Airbus
while such corporation is a member of Airbus.
2. AVSA is a societe a responsabilite limitee duly established
and existing under the laws of the French Republic and has
the power and authority to carry on its business as now
conducted.
3. Each of Airbus and AVSA has full power and authority to enter
into and to execute, deliver and perform its obligations under
those of the Documents to which it is a party; such obligations
are legal, valid and binding upon them respectively, are
enforceable in accordance with their respective terms and rank
pari passu with the other unsecured obligations of Airbus or
AVSA, as the case may be.
4. All actions, authorizations, approvals, consents, conditions
and things required at law to be taken, fulfilled and done
to authorize the execution, delivery and performance by
Airbus and AVSA of those of the Documents to which they
respectively are party have been taken, obtained, fulfilled
and done; and no consents under any exchange control, laws,
rules or regulations of the French Republic are necessary in
connection therewith.
5. Neither the execution and delivery and performance of the
Documents to which Airbus and AVSA respectively are a party,
nor the consummation of the transactions contemplated
thereby, contravenes or violates any law, governmental rule
or regulation applicable to or binding on Airbus or AVSA.
6. The choice of the laws of the State of New York to govern the
Documents (which are expressed to be so governed) is valid
under the laws of the French Republic, and a French court
would uphold such choice of law in any suit on the Documents
brought in a French court.
7. Under the laws of the French Republic, Airbus and AVSA are
subject to private commercial law and to suit, and neither
Airbus nor AVSA, nor their respective properties have any
immunity from the jurisdiction of any court or any legal
process (whether through service of notice, attachment prior to
notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise), except that:
(a) to the extent that Airbus or AVSA occupies or possesses
any property by virtue of any license or grant from the
French State, such property and the title of Airbus or
AVSA thereto may be immune from suit or execution on the
grounds of sovereignty, and
(b) suit and execution against Airbus and AVSA or their
respective property may be affected by action taken by
the French public authorities in the interests of
national defence or on the occurrence of exceptional
circumstances of paramount importance to the national
interest of France, as such concept is understood
under the Constitution, laws and regulations of
France.
8. No French value added tax is due upon the transfer of title of
the Aircraft from AVSA to State Street Bank and Trust
Company of Connecticut, National Association as Owner
Trustee.
9. In connection with the obligations of Airbus and AVSA under the
Documents, this opinion must be read subject to the following
qualifications and observations as to French law:
(a) the remedy of specific performance may not be available
in a French court;
(b) the enforcement against Airbus of any of the Documents to
which it is a party may be limited by applicable
bankruptcy, insolvency, arrangement, moratorium or
similar laws relating to or affecting the enforcement of
creditors' rights generally, as such laws are applied to
Airbus. The enforcement against AVSA of any of the
Documents to which it is a party may be limited by such
laws, as such laws are applied to AVSA. The enforcement
against any member of Airbus of any obligation of Airbus
contained in the Documents may be limited by such laws,
as such laws are applied to such member;
(c) in respect of payment obligations, a French court has
power under Article 1244-1 of the French Civil Code to
grant time to a debtor (not in excess of two years),
taking into account the position of the debtor and the
needs of the creditor;
(d) in order to ensure the validity as against third parties
of the assignment made in the Purchase Agreement
Assignment, it is necessary that notice of such
assignment be served on Airbus and AVSA by "huissier" in
accordance with the provisions of Article 1690 of the
French Civil Code;
(e) in the event of any proceedings being brought in a
French court in respect of a monetary obligation
expressed to be payable in a currency other than
French Francs, a French court would probably give
judgment expressed as an order to pay, not such
currency, but its French Franc equivalent at the time
of payment or enforcement of judgment. With respect
to a bankruptcy, insolvency, liquidation, moratorium,
reorganization, reconstruction or similar proceedings,
French law may require that all claims or debts be
converted into French Francs at an exchange rate
determined by the court at a date related thereto,
such as the date of commencement of a winding-up;
(f) a determination or certificate as to any matter provided
for in the Documents might be held by a French court not
to be final, conclusive or binding, if such determination
or certificate could be shown to have an unreasonable,
incorrect or arbitrary basis or not to have been given or
made in good faith;
(g) claims may become barred by effluxion of time or may be
or become subject to defence of set-off or
counterclaim;
(h) provisions in any Document providing that it or any
other Documents may be amended or varied or any
provision thereof waived only by an instrument in
writing may not be effective;
(i) a French court may stay proceedings if concurrent
proceedings are being brought elsewhere;
(j) we express no opinion as to whether any provision in the
Documents conferring a right of set-off or similar
right would be effective against a liquidator or a
creditor; and
(k) our opinion as to the enforceability of the Documents
relates only to their enforceability in France in
circumstances where the competent French court has and
accepts jurisdiction. The term "enforceability" refers
to the legal character of the obligations assumed by the
parties under the documents, i.e., that they are of a
character which French law enforces or recognizes. It
does not mean that the Documents will be enforced in all
circumstances or in foreign jurisdictions or by or
against third parties or that any particular remedy will
be available.
(l) Article 899 of the French Tax Code provides that
agreements evidencing an undertaking to pay a sum of
money are subject to stamp tax ("droit de timbre") of a
nominal amount if made in the French Republic, if made in
a foreign country, such agreements are subject to a stamp
tax of a nominal amount before certain use thereof can be
made in the French Republic (Article 897 of the French
Tax Code). However non-payment of such stamp tax does
not affect the legality, validity or enforceability of
the agreements.
In rendering the foregoing opinions, we have assumed that the
Documents (expressed to be governed by New York law) constitute the legal,
valid and binding obligations of the parties under New York law.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the
laws of the French Republic as of the date hereof. This opinion is for
your use and that of no one else, and is limited to (i) the matters
specifically mentioned herein, and (ii) the purpose set out above.
Very truly yours,
▇▇▇▇▇▇▇▇ Chance
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(9)
[Letterhead of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To the Parties Named on Schedule A attached hereto
Re: Federal Express Corporation Trust No. N672FE
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.02(d)(iii) of the Participation Agreement (Federal Express Corporation
Trust No. N672FE), dated as of May 1, 1997 (the "Participation Agreement")
among Federal Express Corporation, as Lessee (the "Lessee"), PMCC Leasing
Corporation, as Owner Participant (the "Owner Participant"), State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as otherwise stated, but solely as Owner
Trustee ("Owner Trustee"), First Security Bank, National Association, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee ("Indenture Trustee"), Pass Through Trustee and
Subordination Agent, with respect to that portion of Subtitle VII of Title
49 of the United States Code relative to the recordation of instruments and
the registration of aircraft thereunder.
The capitalized terms herein shall, unless otherwise
defined, have the same meanings given them in the Participation Agreement
or in Annex I attached hereto.
We have examined and filed on this date with the Federal
Aviation Administration (the "FAA") the following described instruments at
the respective times listed below:
(a) AC Form 8050-2 Aircraft ▇▇▇▇ of Sale dated
_____________ (the "FAA ▇▇▇▇ of Sale") from AVSA, as
seller, conveying title to the Airframe to the Owner
Trustee, which FAA ▇▇▇▇ of Sale was filed at ____
_.m., C._.T.;
(b) AC Form 8050-1 Aircraft Registration Application dated
_____________ (the "Aircraft Registration
Application") by the Owner Trustee, as applicant,
covering the Airframe, which Aircraft Registration
Application was filed at ____ _.m., C._.T.;
(c) Affidavit of the Owner Trustee dated _____________ (the
"Owner Trustee Affidavit") pursuant to Section
47.7(c)(2)(ii) of Part 47 of the Federal Aviation
Regulations together with Affidavit of the Owner
Participant dated _____________ (the "Owner
Participant Affidavit") attached thereto, which Owner
Trustee Affidavit with the Owner Participant Affidavit
attached was filed at ____ _.m., C._.T.;
(d) executed counterpart of Trust Agreement (Federal Express
Corporation Trust No. N672FE) dated as of May 1, 1997
(the "Trust Agreement") between the Owner Participant
and the Owner Trustee, which Trust Agreement was filed
at ____ _.m., C._.T.;
(e) executed counterpart of Trust Indenture and Security
Agreement (Federal Express Corporation Trust No.
N672FE) dated as of May 1, 1997 (the "Trust
Indenture") between the Owner Trustee and the
Indenture Trustee, with executed counterpart of
Indenture and Security Agreement Supplement No. 1
(Federal Express Corporation Trust No. N672FE) dated
_____________ (the "Trust Indenture Supplement") by
the Owner Trustee, covering the Aircraft, attached
thereto, which Trust Indenture with the Trust
Indenture Supplement attached was filed at ____ _.m.,
C._.T.; and,
(f) executed counterpart of Lease Agreement (Federal Express
Corporation Trust No. N672FE) dated as of May 1, 1997
(the "Lease") between the Owner Trustee, as lessor,
and the Lessee, with executed counterparts of the
following attached thereto: (i) Lease Supplement No.
1 (Federal Express Corporation Trust No. N672FE)
dated _____________ (the "Lease Supplement") between
the Owner Trustee, as lessor, and the Lessee, covering
the Aircraft; (ii) the Trust Indenture; and (iii) the
Trust Indenture Supplement, which Lease with the
foregoing attachments (collectively, the "Lease
Attachments") attached was filed at ____ _.m., C._.T.
The Confidential Omissions were intentionally omitted from
the FAA filing counterparts of the Lease and the Trust Indenture as
containing confidential financial information.
Based upon our examination of the above described
instruments and of such records of the FAA as we deemed necessary to render
this opinion, it is our opinion that:
1. the FAA ▇▇▇▇ of Sale, the Trust Indenture with the Trust
Indenture Supplement attached and the Lease with the
Lease Attachments attached are in due form for
recordation by and have been duly filed for
recordation with the FAA pursuant to and in accordance
with the provisions of 49 U.S.C. Section 44107;
2. the Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement are in due form for
filing and have been duly filed with the FAA pursuant
to and in accordance with the provisions of 49 U.S.C.
Section 44103(a) and Section 47.7(c) of the Federal
Aviation Regulations;
3. the Airframe is eligible for registration under 49 U.S.C.
Section 44102 in the name of the Owner Trustee and the
filing with the FAA of the FAA ▇▇▇▇ of Sale, the
Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement will cause the FAA to
register the Airframe, in due course, in the name of
the Owner Trustee and to issue to the Owner Trustee an
AC Form 8050-3 Certificate of Aircraft Registration
for the Airframe, and the Airframe will be duly
registered pursuant to and in accordance with the
provisions of 49 U.S.C. Section 44103(a);
4. the Owner Trustee has valid legal title to the Airframe
and the Aircraft is free and clear of all Liens,
except (i) the security interest created by the Trust
Indenture, as supplemented by the Trust Indenture
Supplement, and (ii) the rights of the parties under
the Lease, as supplemented by the Lease Supplement;
5. the rights of the Owner Trustee and the Lessee under the
Lease, as supplemented by the Lease Supplement, with
respect to the Aircraft, are perfected;
6. the Trust Indenture, as supplemented by the Trust
Indenture Supplement, constitutes a duly perfected
first priority security interest in the Aircraft and a
duly perfected first assignment of all the right,
title and interest of the Owner Trustee in, to and
under the Lease and the Lease Supplement (insofar as
such assignment affects an interest covered by the
recording system established by the FAA pursuant to 49
U.S.C. Section 44107), and no other registration of
the Airframe or filings other than filings with the
FAA (which have been duly effected) are necessary in
order to perfect in any applicable jurisdiction in the
United States (A) the Owner Trustee's title to the
Airframe or (B) such security interest and assignment
(insofar as such assignment affects an interest
covered by the recording system established by the FAA
pursuant to 49 U.S.C. Section 44107), it being
understood that no opinion is herein expressed as to
the validity, priority or enforceability of such
security interest and assignment under local law or as
to the recognition of the perfection of such security
interest and assignment as against third parties in
any legal proceeding outside the United States;
7. no authorization, approval, consent, license or order of,
or registration with, or the giving of notice to, the
FAA is required for the valid authorization, delivery
and performance of the Lease, as supplemented by the
Lease Supplement, the Trust Indenture, as supplemented
by the Trust Indenture Supplement, or the Trust
Agreement except for such filings as are referred to
above; and,
8. neither the execution and delivery by the Owner
Participant of the Participation Agreement or the
Trust Agreement, nor other consummation of the
transactions contemplated thereby by the Owner
Participant, requires the consent or approval of, or
the giving of notice to, or the registration of, or
the taking of any other action in respect of the FAA,
except (x) the registration of the Airframe, including
the submission of the Aircraft Registration
Application, the Owner Trustee Affidavit, the Owner
Participant Affidavit and the Trust Agreement to the
FAA and (y) the filings for recordation specified
elsewhere in this opinion.
No opinion is expressed as to the Airframe during any period
or periods of time during which it has not been subject to United States
registration.
No opinion is expressed as to laws other than Federal laws
of the United States. In rendering this opinion, we were subject to the
accuracy of the FAA, its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the search for
encumbrance cross-reference index cards for the Engines. Further, in
rendering this opinion we are assuming the validity and enforceability of
the above described instruments under local law. Since our examination was
limited to records maintained by the FAA, our opinion does not cover liens
which are perfected without the filing of notice thereof with the FAA, such
as federal tax liens, liens arising under Section 1368(a) of Title 29 of
the United States Code, possessory artisan's liens, or matters of which the
parties had actual notice. In rendering this opinion we are assuming that
there are no documents with respect to the Aircraft which have been filed
for recording under the recording system of the FAA but have not yet been
listed in the available records of such system as having been so filed.
In rendering this opinion we have relied upon the opinion of
the Assistant Chief Counsel of the Aeronautical Center dated _____________,
a copy of which is attached hereto.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
For the Firm
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus Industrie A300F4-605R aircraft bearing
manufacturer's serial number 779 and U.S. Registration No. N672FE (the
"Airframe") and two (2) General Electric CF6-80C2-A5F aircraft engines
bearing manufacturer's serial numbers ___-___ and ___-___ (the "Engines")
(the Airframe and the Engines are referred to collectively as the
"Aircraft").
Confidential Omissions
The Lease was filed with the FAA, with (i) the Basic Rent
(Schedule II), (ii) the Stipulated Loss Values (Schedule III), (iii) the
Termination Values (Schedule IV) and (iv) the Purchase Option Schedule
(Schedule V) omitted from the FAA filing counterpart thereof as containing
confidential financial information; and (v) the purchase price under Section
4.02(a)(F) set forth in Ancillary Agreement II, which was not attached to the
FAA filing counterpart of the Lease or otherwise filed with the FAA for
recordation.
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.e]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.b.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.d]
EXHIBIT E
[FORM OF PURCHASE AGREEMENT ASSIGNMENT, AIRBUS CONSENT AND
AVSA CONSENT]
[See Exhibit B to Lease Agreement under Exhibit 4.e]
EXHIBIT F
[FORM OF ENGINE WARRANTY ASSIGNMENT AND ENGINE CONSENT]
[See Exhibit C to Lease Agreement under Exhibit 4.e]
EXHIBIT G-1
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
BENEFICIAL INTEREST TRANSFER AGREEMENT (this "Document"),
dated as of _______ __, ____, between ______________, a ______________
corporation ("Transferor") and ______________, a ______________ corporation
("Transferee").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to effect (a) the
transfer by Transferor to Transferee of all of the rights, title and interest
of Transferor in and to its interest (the "Beneficial Interest") under the
Trust Agreement (Federal Express Corporation Trust No. N672FE), dated as of
May 1, 1997 (as heretofore amended, the "Trust Agreement"), between Transferor
and State Street Bank and Trust Company of Connecticut, National Association,
and the Lessor's Estate created thereunder, and all of Transferor's rights and
obligations under the Participation Agreement (Federal Express Corporation
Trust No. N672FE), dated as of May 1, 1997 (the "Participation Agreement"),
among Federal Express Corporation, as Lessee, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity,
except as otherwise stated therein, but solely as Owner Trustee, PMCC Leasing
Corporation, as Owner Participant, First Security Bank, National Association,
not in its individual capacity, except as otherwise stated therein, but solely
as Indenture Trustee, First Security Bank, National Association, not in its
individual capacity, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent, and under the other Operative Agreements and (b) the
acceptance by Transferee of such transfer and the assumption by Transferee of
such obligations of Transferor thereunder; and
WHEREAS, Section 7.03(d) of the Participation Agreement
permits such transfer and assumption upon satisfaction of certain conditions
heretofore or concurrently herewith being observed;
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements herein contained, the parties hereto agree
as follows:
1. Definitions. Capitalized terms used herein without
definition shall have the respective meanings ascribed thereto in the
Participation Agreement.
2. Transfer. Transferor does hereby sell, convey,
assign, transfer and set over, unto Transferee, as of the Effective Time (as
defined below), all of Transferor's present and future right, title and
interest in and to (a) all of the Beneficial Interest and (b) all of the Owner
Participant's rights and obligations under the Participation Agreement, the
Tax Indemnity Agreement, the Trust Agreement and the other Operative
Agreements and any proceeds therefrom, together with all other documents and
instruments evidencing any of such right, title and interest, except such
rights of Transferor as have arisen or accrued to Transferor prior to the
Effective Time (including without limitation, the right to receive any amounts
due or accrued to Transferor under the Operative Agreements as of a time prior
to the Effective Time and the right to receive any indemnity payment pursuant
to the Participation Agreement or the Tax Indemnity Agreement, with respect to
events occurring prior to such time); all of the foregoing that is being
transferred under this paragraph 2, the "Transferred Interest".
3. Assumption. Transferee hereby accepts the transfer
of the Transferred Interest and, for the benefit of Transferor and the other
parties to the Participation Agreement, assumes and undertakes and agrees to
perform and discharge all of the duties and obligations of Transferor with
respect to the Transferred Interest whenever and wherever accrued (other than
duties and obligations of Transferor required to be performed by it on or
prior to the Effective Time). Transferee hereby confirms that, from and after
the Effective Time, Transferee (a) shall be deemed, to the extent set forth in
Section 2 hereof, the "Owner Participant" party to the Participation
Agreement, the Tax Indemnity Agreement, the Trust Agreement and the other
Operative Agreements and (b) shall be bound by all of the terms of the
Operative Agreements to the extent the same relate to the Transferred
Interest.
4. Release of Transferor. At the Effective Time,
Transferor shall be relieved of all of its duties and obligations with respect
to the Transferred Interest under the Operative Agreements, provided, however,
that Transferor shall in no event be released from any such duty or
obligations arising or relating to any event occurring prior to the Effective
Time, or on account of any breach by Transferor of any of its representations,
warranties, covenants or obligations set forth in the Operative Agreements, or
for any fraudulent or willful misconduct engaged in by it prior to the
Effective Time, or from any obligation that relates to any indemnity claimed
by Transferor or any Lessor's Lien attributable to Transferor.
5. Fees and Expenses. The fees, expenses and charges
of the parties to the Participation Agreement incurred in connection with the
transfer effected hereby shall be for the account of [specify
Transferor/Transferee].
6. Payments. Transferor hereby covenants and agrees
to pay over to Transferee, if and when received following the Effective
Time, any amounts (including any sums payable as interest in respect
thereof) paid on account of the Transferred Interest to or for the benefit
of Transferor, and Transferee hereby covenants and agrees to pay over to
Transferor, if and when received following the Effective Time, any amounts
(including any sums payable as interest in respect thereof) paid to or for
the benefit of Transferee that are not attributable to the Transferred
Interest and to which Transferor is otherwise entitled.
7. Investment Purpose. Transferee hereby represents
and warrants that, as of the date hereof, it is acquiring the Transferred
Interest for its account with no present intention of distributing such
Transferred Interest or any part thereof in any manner which would violate
the Securities Act of 1933, as amended, but without prejudice, however, to
the right of Transferee at all times to sell or otherwise dispose of all or
any part of such Transferred Interest in compliance with Section 7.03(d) of
the Participation Agreement.
8. Representations and Warranties of Transferor.
Transferor represents and warrants to Transferee that as of the Effective
Time:
(a) Organization and Power. Transferor is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions").
(b) Authorization, Execution and Validity. This Agreement
has been duly authorized, executed and delivered by Transferor and
constitutes the legal, valid and binding obligation of Transferor,
enforceable against it in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity.
(c) Conflict. The execution, delivery and performance by
Transferor of this Agreement and compliance by Transferor with all
of the provisions hereof do not contravene any regulation or any
order of any governmental authority applicable to or binding on
Transferor, or contravene the provisions, or constitute a default
by Transferor under, its certificate of incorporation or by-laws
or any indenture, mortgage, contract or other agreement or
instrument to which Transferor is a party or by which Transferor
or any of its Properties is bound or affected.
(d) Consents. No consent, approval or authorization of, or
filing, registration or qualification with, or the giving of
notice or the taking of any other action with respect to, any
governmental authority on the part of Transferor is required in
connection with the execution, delivery and performance by
Transferor of this Agreement.
(e) Litigation. There are no proceedings pending or, to
the knowledge of Transferor, threatened against Transferor before
any governmental authority that would materially and adversely
affect the ability of Transferor to consummate the Transactions.
(f) No Liens. The Trust Estate is free of Lessor's Liens
attributable to Transferor.
(g) Compliance with Operative Agreements. Transferor has
fully performed all of its obligations under the Participation
Agreement and under each other Operative Agreement which
obligations by their terms are required to be satisfied or
performed prior to the Effective Time or prior to the consummation
of the Transactions.
(h) Default. As a result of the transfer effected hereby,
no Indenture Default attributable to the Owner Participant or the
Owner Trustee has occurred and is continuing.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft.
9. Representations and Warranties of Transferee.
Transferee represents and warrants to Transferor and to the other parties
to the Participation Agreement that as of the Effective Time:
(a) Transferee is a corporation duly organized, validly
existing and in good standing under the laws of the State of [ ],
has the full corporate power, authority and legal right to carry
on its business as now conducted, and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions");
(b) Transferee has full corporate power, authority and
legal right to execute, deliver and enter into this Agreement and
the other Operative Agreements and full corporate power and
authority to perform its obligations thereunder, and such
execution, delivery and performance do not and will not contravene
any applicable law or any order of any governmental authority
applicable to or binding on the Transferee, or contravene the
provisions of, or constitute a default under, or result in the
creation of any Lien upon the property of the Transferee under,
its articles of incorporation or by-laws or any material
indenture, mortgage, contract or other agreement or instrument to
which the Transferee is a party or by which it or any of its
property may be bound or affected;
(c) the execution, delivery and performance of this
Agreement by the Transferee (i) has been duly authorized by all
necessary corporate action and (ii) does not require any approval
of the shareholders of the Transferee or any approval or consent
of, or notice to, any trustee or holders of any indebtedness or
obligation of the Transferee, except for such approvals and
consents as have already been obtained;
(d) this Agreement has been duly executed and delivered by
the Transferee, and constitutes the legal, valid and binding
obligation of the Transferee, enforceable against the Transferee
in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity;
(e) there are no proceedings or actions pending or, to the
knowledge of the Transferee, threatened against the Transferee
before any governmental authority in which there is a reasonable
probability of an adverse determination that individually or in
the aggregate would materially and adversely impair the ability of
the Transferee to perform its obligations under this Agreement or
the Operative Agreements, or which involve the Transactions or
question the validity of any Operative Agreement to which the
Owner Participant is a party or any action taken or to be taken
pursuant thereto; and the Transferee is not in default with
respect to any order of any governmental authority which involves
the Transactions or the default under which would materially and
adversely affect the ability of the Transferee to perform its
obligations under this Agreement or any of the Operative
Agreements;
(f) no consent, approval, order or authorization of, giving
of notice to, or registration with, or taking of any other action
in respect of, any governmental authority is required under any
law for the execution and delivery by the Transferee of this
Agreement, or the carrying out by the Transferee of any of the
Transactions, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly
obtained, given or taken;
(g) the Lessor's Estate is free of any Lessor's Liens
attributable to the Transferee;
(h) the Transferee, upon execution of this Agreement, will
not be in default under any of the Operative Agreements;
(i) no part of the funds to be used by it to acquire the
interests acquired by the Owner Participant under the
Participation Agreement constitutes assets (within the meaning of
ERISA and any applicable rules and regulations) of any employee
benefit plan subject to Title I of ERISA or of any plan or
individual retirement account subject to Section 4975 of the Code;
(j) Transferee is a "U.S. Person" as defined in Section
7701(a)(30) of the Code and is not a tax resident of another
country and if it shall at any time cease to be such a "U.S.
Person" or shall become a tax resident of another country, it
shall furnish to the Agent and each Certificate Holder an
indemnity, in form and substance reasonably satisfactory to such
Certificate Holder, for any Taxes that may be imposed on such
Holder as a result of its failure to be such a "U.S. Person" or
as a result of its being a tax resident of another country, and it
shall be personally liable for any debt service to the extent that
the receipt of rentals is reduced by reason of any withholding
Taxes that result from such failure to be such a "U.S. Person" or
from being a tax resident of another country;
(k) [After giving effect to a voting trust or similar
agreement(*), Transferee is a Citizen of the United States]
[applicable if Aircraft is registered in the United States or is
proposed to be so registered]
------------
(*) Such voting trust or similar agreement must be reasonably satisfactory
to the Lessor and the Indenture Trustee.
(l) On and as of the Effective Date, the representations
and warranties of the Owner Participant in Article 7 of the
Participation Agreement are true and correct as to the Transferee;
and
(m) Transferee satisfies the conditions applicable to a
transferee of the Beneficial Interest set forth in Section 7.03(d)
of the Participation Agreement, including without limitation, the
condition set forth in the last sentence thereof [and to the
extent the same has been requested by the Lessee or the Indenture
Trustee, Transferee has heretofore provided to the Lessee and the
Indenture Trustee its most recent audited financial statements,
which show a consolidated tangible net worth or combined capital
and surplus of at least $75,000,000] [remove bracketed language if
an Owner Participant Guaranty is provided].
(n) the Transferee has, independently and without reliance
upon any other party (including without limitation the Transferor)
and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement, and the Transferee has established adequate
means of obtaining from Lessee on a continuing basis information
pertaining to, and is now and on a continuing basis will be
completely familiar with, the financial condition, operations,
properties and prospects of Lessee.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft, other than such laws, rules or regulations
relating to the citizenship requirements of it under applicable aviation
law.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 11.
Effectiveness. This Agreement shall be effective upon the mutual execution
and delivery of this Agreement (the "Effective Time").
12. Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by
both parties so long as each party shall sign at least one counterpart.
13. Beneficiaries. Each of the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Lessee, together with
their respective successors and permitted assigns, is and shall be deemed a
third party beneficiary of this Agreement entitled to enforce this
Agreement directly and in its own name and enforce any rights or claims of
the parties hereto.
14. Further Assurances. Each party agrees that from
time to time after the Effective Time, it shall execute and deliver or
cause to be executed and delivered such instruments, documents and papers,
and take all such further action as may be reasonably required in order to
consummate fully the purposes of this Agreement and to implement the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
[TRANSFEROR]
By:___________________________
Name:
Title:
[TRANSFEREE]
By:___________________________
Name:
Title:
EXHIBIT G-2
FORM OF OWNER PARTICIPANT GUARANTY
TRANSFEREE'S PARENT GUARANTY, dated as of ___________
__, ____, (this "Guaranty") by ____________________, a ___________
corporation (the "Guarantor"), to State Street Bank and Trust Company of
Connecticut, National Association, in its individual capacity and as Owner
Trustee, First Security Bank, National Association, as Indenture Trustee
and Pass Through Trustee, and Federal Express Corporation, as Lessee
(collectively, together with their successors and assigns and the holders
from time to time of the Certificates, the "Beneficiaries").
W I T N E S S E T H :
WHEREAS, ___________, a ____________ corporation (the
"Transferor"), is party to the Participation Agreement (Federal Express
Corporation Trust No. N672FE), dated as of May 1, 1997 (as amended,
modified or supplemented from time to time, the "Participation Agreement"),
among Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual, except as otherwise stated
therein, but solely as Owner Trustee, First Security Bank, National
Association, not in its individual, except as otherwise stated therein, but
solely as Indenture Trustee, First Security Bank, National Association, not
in its individual, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent; and
WHEREAS, the Transferor wishes to transfer, among
other things, all of the rights, title and interest of the Transferor in
and to the Beneficial Interest under the Trust Agreement and the Lessor's
Estate created thereunder, and all of the Transferor's rights and
obligations under the Participation Agreement, the Trust Agreement and the
other Operative Agreements to __________________, a _______________
[corporation] (together with its successors and assigns, the "Transferee"),
a subsidiary of the Guarantor, pursuant to the Beneficial Interest Transfer
Agreement, dated as of the date hereof (the "Transfer Agreement"), between
the Transferor and the Transferee; and
WHEREAS, the terms of the Participation Agreement
provide that the aforementioned transfer is conditioned upon the execution
and delivery of this Guaranty by the Guarantor;
NOW, THEREFORE, in order that the Transferor may make
the aforementioned transfer to the Transferee, the Guarantor hereby agrees
with and for the benefit of the Beneficiaries as follows:
1. Definitions. Capitalized terms used herein
without definition shall have the respective meanings assigned thereto in
the Participation Agreement or the Transfer Agreement.
2. Guaranty. The Guarantor hereby unconditionally
and irrevocably guarantees, as primary obligor and not merely surety, to
the Beneficiaries the prompt and complete payment by the Transferee when
due of all payment obligations of the Transferee under the Operative
Agreements without offset or deduction and the timely performance of all
other obligations of the Transferee thereunder (such payment and other
obligations, the "Obligations"), and the Guarantor further agrees to pay
any and all expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be paid or incurred by the Beneficiaries in
enforcing any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting
against, the Guarantor under this Guaranty.
The Guarantor will not exercise any rights that it may
now or hereafter acquire against Transferee that arise from the existence,
payment, performance or enforcement of the Guarantor's Obligations under
this Guaranty, the Transferred Interest or the Operative Agreements,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate
in any claim or remedy of any Beneficiary against Transferee or any
collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the
right to take or receive from Transferee, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security
on account of such claim, remedy or right, unless and until all of the
Obligations have been performed in full and all other amounts payable under
this Guaranty shall have been paid in full in cash. If any amount shall be
paid to the Guarantor in violation of the preceding sentence at any time
prior to the final payment in full in cash of the Obligations and all other
amounts payable under this Guaranty, such amount shall be held in trust for
the benefit of any Beneficiary and shall forthwith be paid to such
Beneficiary to be credited and applied to the Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Operative Agreements, or to be held as
collateral for any Obligations or other amounts payable under this Guaranty
thereafter arising.
3. No Subrogation. Notwithstanding anything to the
contrary in this Guaranty, the Guarantor hereby agrees not to assert any
rights which may have arisen in connection with this Guaranty to be
subrogated to any of the rights (whether contractual, under the Bankruptcy
Code, under common law or otherwise) of any Beneficiary against the
Transferee for the payment of the Obligations until all of the Obligations
shall have been satisfied by payment and performance in full.
4. Amendments with Respect to the Obligations;
Waiver of Rights. The Guarantor shall remain fully obligated hereunder
notwithstanding that, without any reservation of rights against the
Guarantor and without notice to or further assent by the Guarantor, any
demand for payment or performance of any of the Obligations made by any
Beneficiary may be rescinded by such party and any of the obligations
continued, and the Obligations, may, from time to time, in whole or part,
be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Beneficiary and any Operative Agreement may
be amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions thereof from time to time. When making any
demand hereunder against the Guarantor, a Beneficiary may, but shall be
under no obligation to, make a similar demand on the Transferee, and any
failure by a Beneficiary to make any such demand or to collect any payments
from the Transferee or any release of the Transferee shall not relieve the
Guarantor of its obligations or liabilities hereunder, and shall not impair
or affect the rights and remedies, express or implied, or as a matter of
law, of any Beneficiary against the Guarantor. For the purposes hereof,
"demand" shall include the commencement and continuance of any legal
proceedings. The Guarantor represents and warrants that it is the parent
of the Transferee, and agrees that its obligations hereunder shall continue
unimpaired, even if the Guarantor is no longer an Affiliate of the
Transferee.
5. Guaranty Absolute and Unconditional. The
Guarantor guarantees that the Obligations will be paid and performed
strictly in accordance with the terms of the Transfer Agreement and the
Operative Agreements, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any such terms or the
rights of any Beneficiary with respect thereto. The obligations of the
Guarantor under this Guaranty are independent of the Obligations or any
other obligations of any other party, and a separate action or actions may
be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether the Transferee or any other party is joined in any
such action or actions. The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by any Beneficiary upon this Guaranty or
acceptance of this Guaranty; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guaranty; and
all dealings between the Transferee or the Guarantor and any Beneficiary
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantor waives, to the fullest extent
permitted by applicable law, diligence, presentment, promptness, protest,
mitigation of damages by the Beneficiaries demand for payment and notice of
default or nonpayment to or upon the Transferee or the Guarantor with
respect to the Obligations. The Guarantor further waives any right to
revoke this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Obligations, whether existing now or in the
future. The Guarantor understands and agrees that, to the fullest extent
permitted by applicable law, this Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment and performance
(and not merely of collectibility) without regard to:
(a) the validity, regularity or enforceability of the
Transfer Agreement, any Operative Agreement, or any of the
Obligations at any time or from time to time held by any
Beneficiary;
(b) any defense, set-off, rebate, adjustment, withholding,
deduction or counterclaim (other than a defense of payment or
performance) that may at any time be available to or be asserted
by the Transferee against any Beneficiary or any agreement or
instrument relating thereto or;
(c) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations or any
other obligations of any other party under the Transfer Agreement,
the Operative Agreements, or any other amendment or waiver of or
any consent to departure from the Transfer Agreement or other
Operative Agreements;
(d) any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Obligations;
(e) any change, restructuring or termination of the
corporate structure or existence of the Guarantor or the
Transferee or any of the Affiliates of either;
(f) any defect in the title, condition, design, operation or
fitness of, or any interference with the operation, use or
possession of, the Aircraft;
(g) any failure to establish, perfect or preserve title to
or any security interest in or to the Aircraft or any other
collateral security for the Obligations; or
(h) any other circumstance whatsoever or any existence of or
reliance on any representation by any Beneficiary that might
otherwise constitute a defense available to, or a discharge of,
the Guarantor or any other guarantor or surety.
When pursuing its rights and remedies hereunder against the
Guarantor, any Beneficiary may, but shall be under no obligation to, pursue
such rights and remedies as it may have against the Transferee for the
Obligations, and any failure by any Beneficiary to pursue such other rights
or remedies or to collect any payments from the Transferee, or any release
of the Transferee, shall not, to the fullest extent permitted by applicable
law, relieve the Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as
a matter of law, of any Beneficiary against the Guarantor. This Guaranty
is a continuing guaranty and shall remain in full force and effect until
the earlier of (x) the date that all of the Obligations are satisfied by
payment and performance in full and (y) the date that all right, title and
interest of the Transferee shall have been transferred to a Person meeting
the requirements of Section 7.03(d) of the Participation Agreement in
accordance with said section; provided that this Guaranty shall remain in
full force and effect with respect to obligations relating to the period
prior to such transfer.
6. Reinstatement. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by any Beneficiary upon the insolvency, bankruptcy
dissolution, liquidation or reorganization of the Transferee or the
Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the
Transferee or the Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made and the Guarantor
agrees that it will indemnify any such Beneficiary on demand for all
reasonable costs and expenses (including, without limitation, reasonable
fees and expenses of counsel) by such Beneficiary in connection with such
rescission or restoration.
7. Payments. The Guarantor hereby guarantees that
payments hereunder shall be paid without set-off, counterclaim, deduction,
rebate, adjustment or withholding, and shall be made in U.S. Dollars in
immediately available funds.
8. Representations and Warranties. The Guarantor
hereby represents and warrants that:
(a) the Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and the Transferee is currently a subsidiary
of the Guarantor;
(b) the Guarantor has the power and authority and the legal
right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action
to authorize its execution, delivery and performance of this
Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally;
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or
contractual obligation of the Guarantor or any of its constitutive
documents;
(e) no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or governmental authority
and no consent of any other person is required in connection with
the execution, delivery, performance, validity or enforceability
of this Guaranty;
(f) the Guarantor is a [a bank, savings institution, finance
company, leasing company or trust company, national banking
association acting for its own account or in a fiduciary capacity
as trustee or agent under any pension, retirement, profit sharing
or similar trust or fund, insurance company, fraternal benefit
society or corporation acting for its own account having a
combined capital and surplus (or, if applicable, consolidated
tangible net worth or its equivalent)] of not less than
$75,000,000 [and has, if the same have been requested by the
Lessee or the Indenture Trustee, heretofore furnished to the
Lessee and the Indenture Trustee copies of its most recent audited
financial statements];
(g) there are no conditions precedent to the effectiveness
of this Guaranty that have not been satisfied or waived; and
(h) the Guarantor has, independently and without reliance
upon any Beneficiary and based on such documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty, and the Guarantor has
established adequate means of obtaining from Transferee on a
continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the financial
condition, operations, properties and prospects of Transferee.
9. Severability. Any provision of this Guaranty that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
10. Jurisdiction; Waiver of Jury Trial, Etc.
(a) The Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United
States of America sitting in New York, New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Guaranty, the Transfer Agreement or any Operative Agreement to which
it is or is to be a party, or for recognition or enforcement of any
judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted
by law, in such federal court. The Guarantor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Guaranty shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Guaranty,
the Transfer Agreement or any Operative Agreement to which it is or is to
be a party in the courts of any jurisdiction.
(b) The Guarantor irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Guaranty, the
Transfer Agreement or any Operative Agreement to which it is or is to be a
party in any New York State or federal court. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in
any such court.
11. Section Headings. The Section headings used in
this Guaranty are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the
interpretation hereof.
12. No Waiver; Cumulative Remedies. No Beneficiary
shall by any act (except by a written instrument pursuant to Section 13
hereof), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Beneficiary, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right power or
privilege. A waiver by a Beneficiary of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy
that such Beneficiary would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by
law.
13. Amendments and Waivers. None of the terms or
provisions of this Guaranty may be waived, amended or supplemented or
otherwise modified except by a written instrument executed by the Guarantor
and each Beneficiary.
14. Successors and Assigns. This Guaranty shall be
binding upon the successors and assigns of the Guarantor and shall inure to
the benefit of the Beneficiaries and their respective successors and
permitted assigns but Guarantor may not assign this Guaranty without prior
written consent of the Beneficiaries except to an assignee making, as of
the date of such assignment, (i) representations and warranties
substantially similar to those contained in Section 8 hereof and (ii) a
representation that it is a U.S. citizen, unless, in the case of the
preceding clause (ii) any of (a) the aircraft is not then registered in the
United States nor contemplated to be so registered or (b) a voting trust or
similar arrangement reasonably satisfactory to the Beneficiaries is in
place with respect to such registration or (c) it is not necessary for the
Guarantor to be a U.S. citizen in order for the aircraft to remain
registered in the United States.
15. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED
BY AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK.
16. Notices. All notices, requests and demands to or
upon the Guarantor or any Beneficiary to be effective shall be in writing
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made, when delivered by hand or by mail, upon receipt,
or, when delivered by facsimile transmission, upon being sent and
confirmed, addressed (a) in the case of the Guarantor, to the Guarantor at
its office at [_________________________________], and (b) in the case of
any Beneficiary, to such Beneficiary at the address provided for such
Beneficiary in or pursuant to the Participation Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to
be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
[NAME OF GUARANTOR]
_________________________________
Name:
Title:
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N673FE)
Dated as of May 1, 1997
among
FEDERAL EXPRESS CORPORATION,
Lessee
PMCC LEASING CORPORATION,
Owner Participant
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as Owner Trustee,
Owner Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Indenture Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Pass Through Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Subordination Agent
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 780, REGISTRATION NO. N673FE
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
DEFINITIONS............................................................. 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds........................................ 4
Section 2.02. Certificates............................................. 5
Section 2.03. Owner Participant's Instructions to Owner Trustee........ 5
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent, Stipulated
Loss Values and Termination Values....................... 5
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date......................... 6
Section 3.02. Commitments to Participate in Purchase Price............. 6
Section 3.03. Owner Participant's Instructions to Owner Trustee........ 9
Section 3.04. Transaction Costs........................................ 9
Section 3.05. Postponement of Delivery Date............................ 9
Section 3.06. Closing.................................................. 11
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).......... 11
Section 4.02. Conditions Precedent (Delivery Date)..................... 20
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.... 28
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 29
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 29
Section 6.02. Offering by Lessee....................................... 35
Section 6.03. Certain Covenants of Lessee.............................. 36
Section 6.04. Survival of Representations and Warranties............... 43
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate................................................... 44
Section 7.02. Citizenship.............................................. 44
Section 7.03. Representations, Warranties and Covenants of Owner
Participant.............................................. 45
Section 7.04. Representations, Covenants and Warranties of SSB and the
Owner Trustee............................................ 50
Section 7.05. Representations, Warranties and Covenants of the Indenture
Trustee.................................................. 53
Section 7.06. Indenture Trustee's Notice of Default.................... 54
Section 7.07. Releases from Indenture.................................. 54
Section 7.08. Covenant of Quiet Enjoyment.............................. 54
Section 7.09. Pass Through Trustee's Representations and Warranties.... 54
Section 7.10. Survival of Representations, Warranties and Covenants.... 55
Section 7.11. Lessee's Assumption of the Certificates.................. 56
Section 7.12. Indebtedness of Owner Trustee............................ 58
Section 7.13. Compliance with Trust Agreement, Etc..................... 58
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants................................................ 58
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 60
Section 8.02. After-Tax Basis.......................................... 66
Section 8.03. Time of Payment.......................................... 66
Section 8.04. Contests................................................. 67
Section 8.05. Refunds.................................................. 69
Section 8.06. Lessee's Reports......................................... 69
Section 8.07. Survival of Obligations.................................. 70
Section 8.08. Payment of Taxes......................................... 70
Section 8.09. Reimbursements by Indemnitees Generally.................. 70
Section 8.10. Special Indemnity........................................ 71
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 71
Section 9.02. After-Tax Basis.......................................... 75
Section 9.03. Subrogation.............................................. 75
Section 9.04. Notice and Payment....................................... 75
Section 9.05. Refunds.................................................. 76
Section 9.06. Defense of Claims........................................ 76
Section 9.07. Survival of Obligations.................................. 77
Section 9.08. Effect of Other Indemnities.............................. 77
Section 9.09. Interest................................................. 78
Section 9.10. Special Indemnity........................................ 78
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 78
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 81
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 82
Section 12.02. Interest of Holders of Certificates..................... 82
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 83
Section 13.02. Further Assurances...................................... 83
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment.......................................... 83
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 83
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 85
Section 15.02. Reoptimization.......................................... 88
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 90
Section 17.02. Collateral Account...................................... 90
Section 17.03. Counterparts............................................ 91
Section 17.04. No Oral Modifications................................... 91
Section 17.05. Captions................................................ 91
Section 17.06. Successors and Assigns.................................. 91
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and the
Pass Through Trustee.................................... 92
Section 17.08. Severability............................................ 92
Section 17.09. Public Release of Information........................... 92
Section 17.10. Certain Limitations on Reorganization................... 93
Section 17.11. GOVERNING LAW........................................... 93
Section 17.12. Section 1110 Compliance................................. 93
Section 17.13. Reliance of Liquidity Providers......................... 93
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 94
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Debt Portion
EXHIBIT A(1)(a)(i) Opinion of Lessee's Counsel
(Certificate Closing Date)
EXHIBIT A(1)(a)(ii) Opinion of Lessee's Counsel
(Delivery Date)
EXHIBIT A(1)(b)(i) Opinion of Lessee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(1)(b)(ii) Opinion of Lessee's Special Counsel
(Delivery Date)
EXHIBIT A(2)(a) Opinion of Owner Participant's and Owner Participant
Guarantor's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's and Owner Participant
Guarantor's Counsel
EXHIBIT A(3) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(4)(a)(i) Opinion of Owner Trustee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(4)(a)(ii) Opinion of Owner Trustee's Special Counsel
(Delivery Date)
EXHIBIT A(5) Opinion of Pass Through Trustee's and Subordination
Agent's Special Counsel
EXHIBIT A(6)(a) Opinion of Liquidity Provider's Counsel
EXHIBIT A(6)(b) Opinion of Liquidity Provider's Special Counsel
EXHIBIT A(7) Opinion of Engine Manufacturer's Counsel
EXHIBIT A(8) Opinion of Manufacturer's and AVSA's Counsel
EXHIBIT A(9) Opinion of Special Aviation Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Purchase Agreement Assignment, Consent and
Agreement, AVSA Consent and Agreement
EXHIBIT F Form of Engine Warranty Assignment and Engine Consent
EXHIBIT G-1 Form of Assignment and Assumption Agreement
EXHIBIT G-2 Form of Owner Participant Guaranty
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N673FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N673FE) dated as of May 1, 1997 (this "Agreement") among FEDERAL EXPRESS
CORPORATION, a Delaware corporation (herein, together with its successors and
permitted assigns, the "Lessee"), PMCC LEASING CORPORATION, a Delaware
corporation (herein, together with its successors and permitted assigns, the
"Owner Participant"), STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as owner
trustee under the Trust Agreement referred to below (in such capacity as
trustee, together with its successors and permitted assigns, the "Owner
Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as otherwise expressly
stated herein, but solely as indenture trustee under the Indenture referred to
below (in such capacity as trustee, together with its successors and permitted
assigns, the "Indenture Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity, except as
otherwise expressly stated herein, but solely as pass through trustee of three
separate Pass Through Trusts (in such capacity as trustee, together with its
successors and permitted assigns, the "Pass Through Trustee"), and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but solely as
subordination agent (in such capacity as trustee, together with its successors
and permitted assigns, the "Subordination Agent").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article 1 hereof.
WHEREAS, the Owner Participant has entered into the Trust Agreement
with the Owner Trustee in its individual capacity, substantially in the form
of Exhibit D hereto, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Lessor's Estate for the benefit of the
Owner Participant on the terms specified in the Trust Agreement, subject to
the Lien of the Indenture.
WHEREAS, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of Pass Through Certificates issued by
each Pass Through Trust, an allocable amount of the proceeds of which
offering will be used by the Pass Through Trustee to purchase for each such
Pass Through Trust the Certificates of the Series and Maturity applicable
thereto.
WHEREAS, on the Certificate Closing Date, the Owner Trustee and the
Indenture Trustee will enter into the Indenture for the benefit of the Pass
Through Trustee, pursuant to which the Owner Trustee is issuing the
Certificates to the Subordination Agent on behalf of the Pass Through Trustee
as evidence of the loans made by the Pass Through Trustee to the Owner
Trustee, the proceeds of which loans will be deposited by the Indenture
Trustee on behalf of the Owner Trustee in the Collateral Account.
WHEREAS, concurrently with the execution and delivery hereof, (i)
Kredietbank N.V., acting through its New York Branch will enter into two
revolving credit agreements (each, a "Liquidity Facility"), one for the
benefit of the holders of Pass Through Certificates of each of the Pass
Through Trusts for the Series A Certificates and the Series B Certificates,
with the Subordination Agent, as agent for the Pass Through Trustee on behalf
of each such Pass Through Trust; and (ii) the Pass Through Trustee, each
Liquidity Provider and the Subordination Agent will enter into the
Intercreditor Agreement.
WHEREAS, the Certificates will be held by the Subordination Agent
pursuant to the Intercreditor Agreement on behalf of the Pass Through Trustee
for each of the Pass Through Trusts.
WHEREAS, prior to the Delivery Date, the Certificates will be secured
by the Liquid Collateral.
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee will be authorized and directed by the Owner Participant:
(a) on the Delivery Date, to purchase the Aircraft from AVSA;
(b) on the Certificate Closing Date, to execute and deliver the
Lease substantially in the form of Exhibit B hereto, pursuant to which,
subject to the terms and conditions set forth in said Lease, the Owner
Trustee agrees to lease to the Lessee, and the Lessee agrees to lease from
the Owner Trustee, the Aircraft on the Delivery Date, such lease to be
effected by the execution and delivery on the Delivery Date of a Lease
Supplement, in the form of Exhibit A to the Lease, covering the Aircraft
and incorporating by reference all of the terms of the Lease;
(c) on the Certificate Closing Date, to execute and deliver the
Indenture, substantially in the form of Exhibit C hereto, for the benefit
of the Holders from time to time of the Certificates, pursuant to which the
Owner Trustee agrees, among other things, (A) to deposit, mortgage and
pledge with the Indenture Trustee, as part of the Trust Indenture Estate,
all of the Lessor's Estate but not Excepted Payments, (B) on the
Certificate Closing Date, to issue Certificates substantially in the form
set forth in Exhibit B to the Indenture, the proceeds of the sale of which
will be held by the Indenture Trustee on behalf of the Owner Trustee in
the Collateral Account until released in accordance with the terms
hereof and of the Indenture, and (C) on the Delivery Date, to execute
and deliver the Indenture and Security Agreement Supplement,
substantially in the form of Exhibit A to the Indenture, covering the
Aircraft and supplementing the Indenture;
(d) on the Certificate Closing Date, to execute and deliver the
Purchase Agreement Assignment, whereby the Lessee assigns to the Owner
Trustee the right to purchase the Aircraft from AVSA and certain of the
Lessee's rights and interests under the Purchase Agreement and the Consent
and Guaranty to the extent that the same relate to the Aircraft (except to
the extent reserved in said Purchase Agreement Assignment), which Purchase
Agreement Assignment is to include as an annex a Consent and Agreement
executed by the Manufacturer and the AVSA Consent and Agreement executed by
AVSA, said Purchase Agreement Assignment, Consent and Agreement and AVSA
Consent and Agreement to be substantially in the form of Exhibit E hereto;
and
(e) on the Certificate Closing Date, to execute and deliver the
Engine Warranty Assignment, whereby the Lessee assigns to the Owner Trustee
certain of the Lessee's rights and interests under the GTA to the extent
that the same relate to the Engines (except to the extent reserved in the
Engine Warranty Assignment), which Engine Warranty Assignment is to include
as an annex an Engine Consent executed by the Engine Manufacturer, said
Engine Warranty Assignment and Engine Consent to be substantially in the
form of Exhibit F hereto.
WHEREAS, on the Delivery Date pursuant to and subject to the terms
and conditions of this Agreement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇
of Sale and the Airbus Guaranty, the Owner Trustee will purchase, and
receive title to, the Aircraft from AVSA and lease the Aircraft to the
Lessee pursuant to the Lease.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth in Schedule II hereto are incorporated herein for all purposes of this
Agreement and shall be equally applicable to both the singular and the plural
forms of the terms so defined.
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement, shall
enter into the Series Supplements, and, subject to the terms and conditions
set forth therein, on the Pass Through Closing Date (i) the Lessee shall
direct the Underwriters to execute a wire transfer or intra-bank transfer to
the Pass Through Trustee in the amount of the total proceeds payable pursuant
to the Underwriting Agreement with respect to the Pass Through Certificates
and (ii) the Pass Through Trustee shall deliver the Pass Through Certificates
to the Underwriters upon receipt by the Pass Through Trustee of such proceeds.
(b) Subject to the satisfaction or waiver of the conditions set
forth herein, on the Certificate Closing Date, on behalf of each Pass Through
Trust, from an allocable amount of the proceeds of the sale of the related
Pass Through Certificates, the Pass Through Trustee shall purchase the
Certificates specified for such Pass Through Trust on Schedule I hereto. For
each Pass Through Trust, the Pass Through Trustee shall pay an amount equal to
the principal amount of Certificates of the Series and Maturity that relates
to such Pass Through Trust, which amounts in the aggregate shall equal the
aggregate principal amount of the Certificates as specified in Section 2.04 of
the Indenture. The aggregate amount payable by the Pass Through Trustee
pursuant to this Section 2.01(b) shall be payable by wire transfer or
intra-bank transfer to the Indenture Trustee on behalf of the Owner Trustee.
(c) On the Certificate Closing Date, the Indenture Trustee shall,
on behalf of the Owner Trustee, deposit, by wire transfer or intra-bank
transfer, the amounts received by it pursuant to Section 2.01(b) hereof in the
Collateral Account pursuant to the Indenture.
(d) On the Certificate Closing Date concurrently with the events
specified in Section 2.01(b) hereof, the parties hereto shall execute and
deliver, to the extent they are parties thereto, and consent to the execution
and delivery of (if they are not parties thereto), the Lease (other than the
Lease Supplement), the Indenture (other than the Indenture and Security
Agreement Supplement), and the other documents listed in Section 4.01(d)
hereof, and the Owner Trustee shall execute and deliver to the Indenture
Trustee for authentication, and the Indenture Trustee shall authenticate and
deliver to the Subordination Agent on behalf of the Pass Through Trustee for
each of the Pass Through Trusts, upon the request of the Owner Trustee, the
Certificates as provided in Section 2.02 hereof.
(e) The Closings shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 2.02. Certificates. Subject to the satisfaction or waiver
of the conditions set forth herein, on the Certificate Closing Date, the Owner
Participant will instruct the Owner Trustee to execute and deliver to the
Indenture Trustee, and the Indenture Trustee shall authenticate and deliver,
upon the request of the Owner Trustee, to the Subordination Agent on behalf of
the Pass Through Trustee for each of the Pass Through Trusts, the Certificates
specified for such Pass Through Trust on Schedule I attached hereto, which (i)
shall be issued in the principal amount and in the Series and Maturity set
forth for such Certificate in Schedule I hereto, (ii) shall bear interest at
the interest rate set forth for such Certificate in Schedule I hereto, (iii)
shall be issued in such form and on such terms as are specified in the
Indenture, (iv) shall be dated and authenticated on the Certificate Closing
Date and shall bear interest from the Certificate Closing Date and (v) shall
be registered in the name of the Subordination Agent on behalf of the Pass
Through Trustee for such Pass Through Trust.
Section 2.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the issuance of Certificates in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the action specified in Section 1.01 (other than clauses (a) and
(c)) of the Trust Agreement and confirmation that all conditions to closing
in respect of the Certificate Closing Date set forth in Section 4.01 (but
not Section 4.02) hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values and Termination Values. On or prior to the Delivery
Date, the percentages for Basic Rent referred to in Schedule II of the Lease
and the percentages for Stipulated Loss Value and Termination Value in
Schedule III and Schedule IV, respectively, of the Lease shall be adjusted
(upward or downward), subject to the procedures set forth in Section 3.04 of
the Lease and the minimum values established by Section 3.05 of the Lease and
the definitions of Stipulated Loss Value and Termination Value, to reflect
changes in the pricing assumptions with respect to (i) the Delivery Date being
other than September 11, 1997, (ii) a different rate of interest or amortization
schedule assumed by the Owner Participant in calculating such percentages from
that assumed by the Owner Participant in originally calculating such
percentages, (iii) Transaction Costs being other than as assumed in Section
10.01 hereof, (iv) any change in the length of the Basic Term (but in no event
shall the Term exceed 23.25 years) and (v) a Change in Tax Law which occurs
after the date of the execution of this Agreement but on or prior to the
Delivery Date. Notwithstanding anything herein to the contrary, the Lessee
shall have no obligation to enter into the transaction contemplated by this
Agreement other than with respect to Transaction Costs as described in Section
2.03 below and its obligation to purchase the Aircraft as provided in Section
3.05(a) hereof if, as a result of a Change in Tax Law after the date of
execution of this Agreement but on or prior to the Delivery Date, the Net
Present Value of Rents is increased by 100 basis points or more.
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date. The Lessee agrees
to give the Owner Participant, the Indenture Trustee, the Owner Trustee and
the Pass Through Trustee at least three (3) Business Days' written or
facsimile notice prior to the Delivery Date (which notice shall be effective
only if received not later than 10:00 a.m. (New York City time) on the date
that is at least three (3) Business Days prior to the Delivery Date), which
Delivery Notice shall specify the amount of the Purchase Price, the amount of
the Owner Participant's Commitment, the Debt Portion, the Delivery Date for
the Aircraft, the serial number of the Airframe and each Engine, and the
Aeronautics Authority registration number for the Aircraft.
Section 3.02. Commitments to Participate in Purchase Price. (a)
Participation in Purchase Price. Subject to the terms and conditions of this
Agreement, on the Delivery Date, (i) subject to the proviso to this Section
3.02(a), the Indenture Trustee agrees to release the Debt Portion or such
lesser amount as may then be held in the Collateral Account together with the
Lessee Shortfall (as defined in clause (iii) below), if any, to the Owner
Trustee for application to the Purchase Price as provided below, (ii) the
Owner Participant agrees to participate in the Lessor's payment of the
Purchase Price by making an investment in the beneficial ownership of the
Lessor's Estate in an amount equal to the amount set forth in Ancillary
Agreement II, (iii) subject to the proviso to this Section 3.02(a), the Lessee
agrees to pay to the Indenture Trustee the excess, if any, of (I) the Debt
Portion over (II) such amount as may then be held in the Collateral Account
(the "Lessee Shortfall") as provided in Section 17.02(a) hereof, and (iv)
pursuant to the Purchase Agreement as assigned pursuant to the Purchase
Agreement Assignment, AVSA shall sell the Aircraft to the Owner Trustee and
the Owner Trustee shall immediately thereafter lease the Aircraft to the
Lessee pursuant to the Lease. In consideration for the assignment to the
Owner Trustee by the Lessee under the Purchase Agreement Assignment of the
Lessee's right to purchase the Aircraft for the remaining balance due under
the Purchase Agreement and for the transfer of title to the Aircraft from
AVSA to the Owner Trustee, the following cash payments will be made by wire
transfer of immediately available funds on the Delivery Date: (A) by the
Owner Trustee to AVSA, an amount equal to the remaining balance due to AVSA
under the Purchase Agreement for the Aircraft, as evidenced by the Invoice,
or if the proviso to this Section 3.02(a) is applicable, such amount as it
shall have received from the Owner Participant not to exceed such remaining
balance due to AVSA, (B) by the Owner Trustee to the Lessee, an amount
equal to the Purchase Price (or if the proviso to this Section 3.02(a) is
applicable, the amount received from the Owner Participant) minus the cash
payment to AVSA pursuant to clause (A) above and (C) by the Indenture
Trustee, on behalf of the Owner Trustee, to the Lessee the excess of any
amounts as may then be held in the Collateral Account over the Debt
Portion; provided, however, that if (1) the Delivery Date has been
postponed, (2) the investments contemplated by Section 2.14(b) of the
Indenture have been made, (3) such investments do not mature on the
rescheduled Delivery Date and (4) the Lessee elects not to break such
investments, then the Indenture Trustee shall not release amounts in the
Collateral Account to the Owner Trustee and the Lessee shall instead pay to
AVSA any balance of the Purchase Price remaining after payment to AVSA by
the Owner Trustee as contemplated by clause (A) above and the Indenture
Trustee shall pay to the Lessee at the end of the applicable investment
period referred to in Section 2.14(b) of the Indenture all amounts then
held in the Collateral Account.
(b) Payment of Commitment. The Owner Participant agrees with the
Lessee and only with the Lessee on behalf of the Owner Trustee, subject to the
terms and conditions of this Agreement, to make the amount of its Commitment
available for and on account of the Owner Trustee on the Delivery Date
specified in the Delivery Notice pursuant to Section 3.03 hereof by wire
transfer, initiated by 10:00 a.m. (New York City time on such day) of such
amount in immediately available funds, to the Owner Trustee for deposit in its
account at State Street Bank and Trust Company, Boston, Massachusetts, ABA
No. ▇▇▇-▇▇▇-▇▇▇, A/C No. ▇▇▇▇-▇▇▇-▇, Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, Re: FedEx
Equity Payments Account. The amount of the Owner Participant's Commitment
shall be held for the account of the Owner Participant by the Owner Trustee
until released by the Owner Participant or its special counsel at closing or
until returned to the Owner Participant in accordance with Section 3.02(c)
hereof.
(c) No Obligation to Increase Commitments; Delayed Delivery. (i) If
the Indenture Trustee shall default in its obligation to make the amount of
its Debt Portion available pursuant hereto, the Owner Participant shall have
no obligation to make any portion of such Debt Portion available or to
increase the amount of its Commitment, and the obligations of the Owner
Participant shall remain subject to the terms and conditions of this
Agreement, until no later than September 30, 1997 (provided, however, if
the Delivery Date for the Aircraft is subsequent to the delivery date for
the aircraft bearing manufacturer's serial number 781 (and the actual
delivery date for that aircraft is on or prior to September 30, 1997) then
the foregoing date shall be December 31, 1997).
(ii) Subject to the provisions of Section 3.05 hereof, if the closing
of the transactions contemplated by the Operative Agreements shall not have
been consummated by 2:00 p.m. (New York City time), or such earlier time as
directed by the Lessee, on the Scheduled Delivery Date, the Owner Trustee
shall, if instructed in writing by the Lessee, at the risk and expense of the
Lessee, use its reasonable best efforts to cause the Owner Participant's
Commitment to be invested and reinvested to the extent practicable at the
direction received by it from the Lessee (with a copy to the Owner
Participant), at the risk of the Lessee, in Permitted Investments consisting
of either commercial paper or time deposits; provided, however, that in the
absence of instructions by 2:00 p.m. (New York City time) the Owner Trustee
shall use its reasonable best efforts to cause such amount or the proceeds
thereof to be invested and reinvested to the extent practicable in overnight
Eurodollar time deposits. Earnings on any such investments shall be applied
to the Lessee's payment obligations, if any, to such Owner Participant
pursuant to the next succeeding paragraph, and the balance, if any, of such
earnings remaining after such application shall be paid in accordance with the
Lessee's written instructions.
If for any reason (i) the Operative Agreements shall not be executed
and delivered by the respective parties thereto and/or the delayed Delivery
Date shall not occur (whether by reason of a failure to meet a condition
precedent thereto set forth in Article 4 hereof or otherwise) on or before the
third Business Day after the Scheduled Delivery Date (or earlier if requested
by the Owner Participant) or, if earlier, the Cut-Off Date, or (ii) the Lessee
has notified the Owner Trustee (with a copy to the Owner Participant) prior to
2:00 p.m. (New York City time) on any date after the Scheduled Delivery Date
that it does not intend to go forward to close the transactions contemplated
hereby for such Delivery Date, the Owner Participant may cancel any funding
arrangements made to fund its Commitment on the Scheduled Delivery Date but
the Owner Participant's Commitment hereunder with respect to the Aircraft
shall not be terminated thereby until September 30, 1997, or, in the
circumstances set forth in the proviso in paragraph (c)(i) above, December
31, 1997, whereupon the Owner Participant's Commitment hereunder shall
terminate. On such third Business Day (or such earlier date) or September
30, 1997 or December 31, 1997, as the case may be, or the earliest
practicable Business Day thereafter, the Owner Trustee shall return the
amounts held by it hereunder to the Owner Participant, provided that the
Owner Trustee shall have had a reasonable time to liquidate any Permitted
Investments it has been authorized to invest in pursuant to the preceding
paragraph and to obtain the proceeds therefrom in funds of the type
originally received, and the Lessee shall pay interest on such funds to the
Owner Participant at the Debt Rate, such interest to be payable for the
period from and including such Scheduled Delivery Date to but excluding the
date such funds are returned to the Owner Participant in accordance with
the terms hereof; provided that if any such funds are returned to the Owner
Participant after 2:00 p.m. (New York City time) on any such date, such
funds shall be deemed for purposes of this paragraph to have been returned
on the next succeeding Business Day.
The Lessee shall reimburse the Owner Trustee on demand for any loss
incurred by the Owner Trustee as a result of the investment of funds by the
Owner Trustee in accordance with the terms of this Section 3.02(c). Further,
the Lessee shall indemnify the Owner Trustee and hold it harmless from and
against any cost or expense the Owner Trustee may incur as a result of any
investment of funds or transfer of funds referred to herein in accordance with
the terms hereof. The Owner Trustee shall not be liable for failure to invest
such funds except as otherwise provided herein or for any losses incurred on
such investments except for any losses arising out of its own gross negligence
or willful misconduct.
Section 3.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the release of its Commitment in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the actions specified in Sections 1.01(a) and (c) of the Trust
Agreement and confirmation that all conditions to closing set forth in
Section 4.02 hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 3.04. Transaction Costs. If the transactions contemplated
by this Article 3 are consummated, as and when any portion of Transaction
Costs becomes due and payable, the Owner Participant shall, as soon as
practicable upon receipt of bills or invoices for the amounts payable make
such payments or, if the Lessee shall have already made such payment, shall
reimburse the Lessee therefor or shall, as soon as practicable, furnish the
Owner Trustee funds sufficient to, and the Owner Trustee shall, as soon as
practicable, make payment of such portion to the Person or Persons entitled to
payment upon presentation to the Owner Trustee of bills or invoices for the
amount of such payment. If such transactions are not consummated, the Lessee
shall pay or cause to be paid all the Transaction Costs; provided, however
that if the failure of such transactions to be consummated is due to (i) a
failure of the Owner Participant to obtain investment approval to proceed with
the transaction contemplated hereby, (ii) a failure to negotiate the Operative
Agreements in good faith by the Owner Participant or (iii) a wrongful act by
the Owner Participant, the Lessee shall have no obligation to pay those costs
and expenses incurred directly by the Owner Participant in connection with the
transactions contemplated by this Agreement described in Sections 10.01(a)(i)
and (xi) hereof, but the Lessee shall be obligated to pay all other
Transaction Costs.
Section 3.05. Postponement of Delivery Date. (a) If the Owner
Participant shall for any reason fail or refuse to make the full amount of its
Commitment available on the Scheduled Delivery Date in accordance with the
terms of Section 3.02 hereof, the Owner Trustee will promptly give each party
confirmed facsimile notice thereof and the Lessee shall postpone the Delivery
Date for a period of not more than five (5) Business Days, but in no event
later than September 30, 1997 or December 31, 1997, as the case may be. If
the Owner Participant shall for any reason fail or refuse to make the full
amount of its Commitment available in accordance with the terms of Section
3.02 hereof on such postponed Delivery Date, (i) if the Owner Participant
fails to make available its Commitment in breach of its obligations under
this Agreement, the Lessee shall cause the Owner Participant to assign to
another equity investor identified by the Lessee its interest in the
Lessor's Estate pursuant to Section 7.03(d) hereof and (ii) if no such
equity investor is identified, or if such equity investor fails to close
such transactions, or if the Owner Participant fails to make available its
Commitment for any other reason than as specified in clause (i) above, the
Owner Participant's interest in the Lessor's Estate shall be automatically
conveyed to the Lessee without any further action, and the parties hereto
shall take such actions as may be advisable or necessary to give effect to
such conveyance. From and after any such conveyance, the Owner
Participant's obligations hereunder and under the other Operative
Agreements shall cease. The exception to the Lessee's indemnity set forth
in clause (viii) of Section 9.01(b) hereof shall not be applicable to any
such conveyance other than a conveyance pursuant to clause (i) above. For
the avoidance of doubt, it is understood and agreed that if for any reason
other than the failure of the Manufacturer or AVSA to deliver the Aircraft,
the Lessee does not enter into the Lease Supplement with the Owner Trustee
on or prior to the Cut-Off Date, the Indenture Trustee and the Pass Through
Trustee agree that the Lessee shall purchase the Aircraft and assume all of
the obligations of the Owner Trustee under the Certificates upon
satisfaction of the requirements set forth in Section 4.02 hereof, as the
same may be modified by the provisions of Section 7.11 hereof and as
otherwise necessary to reflect a full recourse secured aircraft financing
of the Lessee. If the Lessee has identified an equity investor under the
circumstances set forth in clause (i) above, the Owner Participant agrees
to assign its interest in the Lessor's Estate as provided in said clause
(i). In case of any such conveyance pursuant to said clause (i) (but
subject to the satisfaction of the conditions precedent specified herein),
the Indenture Trustee shall release the Debt Portion or such lesser amount
as may then be held in the Collateral Account for application to the
payments contemplated in the last sentence of Section 3.02(a) hereof,
subject to the proviso to Section 3.02(a) hereof.
(b) Release of Obligations. If the Delivery Date has not occurred
on or prior to the Cut-Off Date (i) in the case of the Indenture Trustee and
the Pass Through Trustee, as a result of a failure of the Manufacturer or AVSA
to deliver the Aircraft, or (ii) in the case of the Owner Participant, for any
reason, then, in such event, the Owner Trustee shall not purchase the Aircraft
from AVSA, and the parties to the Operative Agreements shall have no further
obligations or liabilities under any of said Operative Agreements with respect
to the Aircraft, including the obligation of the Owner Participant to
participate in the payment of the Purchase Price, and such documents shall
terminate and have no further force or effect with respect to the Aircraft;
provided, however, that the Lessee shall provide, no later than the Cut-Off
Date, notice of prepayment to the Indenture Trustee and the Certificates shall
be prepaid on the 15th day following the Cut-Off Date as provided in Section
6.02(a)(vi) of the Indenture and Section 17.02(c) hereof and provided further,
that (i) the Lessee's obligation to pay any Transaction Costs as provided in
Section 3.04 hereof (to the extent such section is applicable) and to
indemnify such parties to the extent provided in such documents, shall not be
diminished or modified in any respect and (ii) the obligations of the Owner
Trustee, the Indenture Trustee and the Lessee to return funds and pay
interest, costs, expenses and other amounts thereon or in respect thereof as
provided in Section 3.02 hereof shall continue.
(c) Optional Postponement. Without limiting the provisions of
Section 3.02(c) hereof, the Scheduled Delivery Date may be postponed from time
to time (but in no event shall the Delivery Date be later than the Cut-Off
Date) for any reason, other than pursuant to Section 3.05(a) hereof, if the
Lessee gives the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Pass Through Trustee confirmed facsimile notice (or telephone notice
followed by written confirmation) of such postponement and notice of the date
to which the Delivery Date has been postponed, such notice of postponement to
be received by each party no later than 11:00 a.m. (New York City time) on the
Business Day preceding the Scheduled Delivery Date.
Section 3.06. Closing. The closing with respect to the purchase and
lease of the Aircraft on the Delivery Date shall take place at the offices of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date). The
obligations of the Owner Trustee, the Owner Participant, the Indenture
Trustee, the Subordination Agent and the Pass Through Trustee on behalf of
each Pass Through Trust to participate in the transactions contemplated hereby
on the Certificate Closing Date are subject to the fulfillment to the
satisfaction of such party (or waiver by such party), prior to or on the
Certificate Closing Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligations of any party):
(a) Certificates. (i) On the Certificate Closing Date, there shall
have been duly issued and delivered by the Owner Trustee to the
Subordination Agent on behalf of the Pass Through Trustee for each Pass
Through Trust, against payment therefor, a Certificate, substantially in
the form set forth in Exhibit B to the Indenture, duly authenticated, dated
the Certificate Closing Date and registered in the name of the
Subordination Agent, in the principal amounts, Series and Maturity, bearing
the interest rate and the other economic terms specified in the Series
Supplements and otherwise as provided in Section 2.04 of the Indenture.
The Pass Through Certificates shall be registered under the Securities Act,
any applicable state securities laws shall have been complied with, and the
Pass Through Agreement shall have been qualified under the Trust Indenture
Act, and (ii) on the Certificate Closing Date, the "Certificates" (as
defined in each of the Related Indentures) have been duly issued and
delivered by the "Owner Trustee" (as defined in each of the Related
Indentures) to the Subordination Agent on behalf of the Pass Through
Trustee for each Pass Through Trust.
(b) Legal Investment. On the Certificate Closing Date, no fact or
condition shall exist under applicable laws or regulations, or
interpretations of any such laws or regulations by applicable regulatory
authorities, which, in the opinion of the Owner Participant or its special
counsel, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee or their special counsel, would make it illegal for the Owner
Participant, the Lessee, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee, and no change in
circumstances shall have occurred which would otherwise make it illegal or
otherwise in contravention of guidance issued by regulatory authorities for
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through
Trustee, the Subordination Agent or the Indenture Trustee, to participate
in the transactions to be consummated on the Certificate Closing Date; and
no action or proceeding shall have been instituted nor shall governmental
action before any court, governmental authority or agency be threatened
which in the opinion of counsel for the Owner Participant, the Indenture
Trustee, the Subordination Agent or the Pass Through Trustee is not
frivolous, nor shall any order have been issued or proposed to be issued by
any court, or governmental authority or agency, as of the Certificate
Closing Date, to set aside, restrain, enjoin or prevent the consummation of
any of the transactions contemplated by this Agreement or by any of the
other Operative Agreements.
(c) Underwriters. The Underwriters shall have transferred the funds
specified in Section 2.01(a) hereof and all conditions thereunder shall
have been satisfied or waived.
(d) Documents. This Agreement and the following documents shall
have been duly authorized, executed and delivered by the respective
party or parties thereto, shall each be satisfactory in form and
substance to the Lessee, the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would
be a default thereunder, and copies executed or certified as requested
by the Lessee, the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee, the Subordination Agent or the Owner Participant, as
the case may be, of such documents shall have been delivered to the
Owner Participant, the Lessee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent and the Owner Trustee (provided that
the sole chattel-paper original of each of the Lease and each Ancillary
Agreement amendatory of the Lease, shall be delivered to the Indenture
Trustee):
(i) the Lease;
(ii) the Indenture;
(iii) in the case of the Owner Participant only, the Tax Indemnity
Agreement;
(iv) the Purchase Agreement and the Consent and Guaranty;
(v) the Purchase Agreement Assignment and the French Pledge
Agreement with respect thereto;
(vi) the GTA;
(vii) the Trust Agreement;
(viii) the Ancillary Agreement I;
(ix) the Ancillary Agreement II;
(x) the Owner Participant Guaranty;
(xi) the Intercreditor Agreement; and
(xii) the Liquidity Facility for each of the Pass Through Trusts for
the Series A Certificates and the Series B Certificates.
(e) Approvals. All approvals and consents of any trustees or
holders of any indebtedness or obligations of the Lessee, which in the
opinion of the Owner Participant, the Pass Through Trustee or the Indenture
Trustee are required in connection with any transaction contemplated by
this Agreement, shall have been duly obtained.
(f) Financing Statements. Uniform Commercial Code ("UCC") financing
statements covering all the security interests (and other interests)
intended to be created by or pursuant to the Granting Clause of the
Indenture shall have been executed and delivered by the Owner Trustee, as
debtor, and by the Indenture Trustee, as secured party, for and on behalf
of the Holders, and such financing statements shall have been duly filed or
duly submitted for filing in the State of Connecticut, and all other
actions shall have been taken which, in the opinion of the Owner
Participant, the Pass Through Trustee and the Underwriters, are necessary
to perfect and protect such security interests and other interests.
(g) Corporate Documents. Except when such Person is the delivering
party, the Owner Participant, the Owner Trustee, the Pass Through Trustee,
the Lessee and the Indenture Trustee (acting directly or by authorization
to its counsel) shall have received the following, in each case in form and
substance satisfactory to it:
(i) a copy of the certificate of incorporation and by-laws of the
Lessee, certified by the Secretary or an Assistant Secretary of the
Lessee as of the Certificate Closing Date, and a copy of the minutes
of the regular meeting of the board of directors of the Lessee,
certified as such as of the Certificate Closing Date by such
Secretary or Assistant Secretary, duly authorizing the lease by the
Lessee of the Aircraft under the Lease and the execution, delivery
and performance by the Lessee of this Agreement, the Lease, the Tax
Indemnity Agreement, the Pass Through Agreement, the Series
Supplements, the other Operative Agreements to which the Lessee is
or is to be a party and each other document to be executed and
delivered by the Lessee in connection with the transactions
contemplated hereby;
(ii) a copy of the articles of incorporation and bylaws of the
Owner Participant and the Owner Participant Guarantor, certified by
the Secretary or an Assistant Secretary of the Owner Participant or
the Owner Participant Guarantor as of the Certificate Closing Date,
and a copy of the resolutions of the board of directors of the Owner
Participant, certified as such as of the Certificate Closing Date by
such Secretary or an Assistant Secretary, authorizing the execution
and delivery by the Owner Participant of this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative
Agreements to which the Owner Participant is or is to be a party and
each other document to be executed and delivered by the Owner
Participant in connection with the transactions contemplated hereby,
and a copy of the resolutions of the board of directors of the Owner
Participant Guarantor, certified as such as of the Certificate
Closing Date by the Secretary or an Assistant Secretary, authorizing
the execution and delivery by the Owner Participant Guarantor of the
Owner Participant Guaranty and the other Operative Agreements to
which such Owner Participant Guarantor is or is to be a party and
each other document to be executed and delivered by the Owner
Participant Guarantor in connection with the transactions
contemplated hereby;
(iii) a copy of the articles of association and by-laws and other
instruments of the Owner Trustee, certified by the Secretary or an
Assistant Secretary of the Owner Trustee as of the Certificate
Closing Date (or other like instruments satisfactory to the Lessee
and the Owner Participant) and evidence authorizing the execution,
delivery and performance by the Owner Trustee in its individual
capacity or as Owner Trustee, as the case may be, of this Agreement,
the Trust Agreement and each of the other Operative Agreements to
which it is or is to be a party, whether in its individual capacity
or as Owner Trustee, and each other document to be executed and
delivered by the Owner Trustee in connection with the transactions
contemplated hereby;
(iv) a copy of the articles of association and by-laws and
other instruments of the Indenture Trustee, certified by the
Secretary or an Assistant Secretary of the Indenture Trustee as of
the Certificate Closing Date (or other like instruments
satisfactory to the Lessee and the Owner Participant) and evidence
authorizing the execution, delivery and performance by the
Indenture Trustee of each of this Agreement, the Indenture and
each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by
the Indenture Trustee in connection with the transactions
contemplated hereby;
(v) a copy of the articles of association and by-laws and other
instruments of the Pass Through Trustee, certified by the Secretary
or an Assistant Secretary of the Pass Through Trustee as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Pass Through Trustee of
this Agreement, the Pass Through Agreement, the Series Supplements
and each of the other Operative Agreements to which it is or is to be
a party, and each other document to be executed and delivered by the
Pass Through Trustee in connection with the transactions contemplated
hereby;
(vi) a copy of the articles of association and by-laws and other
instruments of the Subordination Agent, certified by the Secretary or
an Assistant Secretary of the Subordination Agent as of the
Certificate Closing Date (or other like instruments satisfactory to
the Lessee and the Owner Participant) and evidence authorizing the
execution, delivery and performance by the Subordination Agent of
this Agreement, the Intercreditor Agreement and each of the other
Operative Agreements to which it is or is to be a party, and each
other document to be executed and delivered by the Subordination
Agent in connection with the transactions contemplated hereby; and
(vii) such other documents, evidences, materials, and information
with respect to the Lessee, the Owner Trustee, the Indenture Trustee,
the Pass Through Trustee and the Owner Participant as the Indenture
Trustee, the Pass Through Trustee or the Owner Participant may
reasonably request in order to establish the consummation of the
transactions contemplated by this Agreement.
(h) Officer's Certificate of Lessee. On the Certificate Closing
Date, the following statements shall be true, and the Owner Participant,
the Owner Trustee, the Pass Through Trustee and the Indenture Trustee shall
have received a certificate signed by the Vice President and Treasurer or
any other duly authorized officer of the Lessee, dated the Certificate
Closing Date, stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(i) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Certificate Closing Date, the following statements shall
be true, and the Lessee, the Pass Through Trustee, the Owner Trustee and
the Indenture Trustee shall have received a certificate from (i) the Owner
Participant, signed by a duly authorized officer of the Owner Participant
dated the Certificate Closing Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto, are true and correct on and as of the Certificate Closing
Date as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date,
in which case such certificate shall state that such representations
and warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(j) Other Officer's Certificates. On the Certificate Closing Date,
the following statements shall be true, and the Lessee, the Pass Through
Trustee, the Owner Trustee, the Subordination Agent and the Indenture
Trustee shall have received a certificate from each of SSB and the Owner
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Indenture Trustee), FSB and the Indenture
Trustee (in the case of the Lessee, the Pass Through Trustee, the
Subordination Agent and the Owner Trustee), FSB and the Pass Through
Trustee (in the case of the Lessee, the Indenture Trustee, the
Subordination Agent and the Owner Trustee) and FSB and the Subordination
Agent (in the case of the Lessee, the Pass Through Trustee, the Indenture
Trustee and the Owner Trustee), signed by a duly authorized officer of SSB
and FSB, respectively, dated the Certificate Closing Date, stating with
respect to SSB and the Owner Trustee, with respect to FSB and the Indenture
Trustee, with respect to FSB and the Pass Through Trustee or with respect
to FSB and the Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Certificate
Closing Date as though made on and as of such date (except to the
extent that such representations and warranties relate solely to
an earlier date, in which case such certificate shall state that
such representations and warranties were true and correct on and
as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens.
(k) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Certificate Closing Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(a) hereto and the General Counsel's Office of the Owner
Participant and the Owner Participant Guarantor, in the form of
Exhibit A(2)(b) hereto, each addressed to the Underwriters, the Owner
Participant, the Indenture Trustee, the Owner Trustee, the Pass
Through Trustee, each Liquidity Provider and the Lessee;
(iii) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Indenture
Trustee, in the form of Exhibit A(3) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(iv) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(i) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(v) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(i) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(vi) Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the Pass Through
Trustee and the Subordination Agent, in the form of Exhibit A(5)
hereto and addressed to the Underwriters, the Owner Participant, the
Indenture Trustee, the Owner Trustee, the Pass Through Trustee, each
Liquidity Provider and the Lessee; and
(vii) ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal Department of
Kredietbank N.V., in the form of Exhibit A(6)(a) hereto, and Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel for the Liquidity Providers,
in the form of Exhibit A(6)(b) hereto, each addressed to the Pass
Through Trustee, the Subordination Agent, each Liquidity Provider and
the Lessee.
(l) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(m) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(n) Other Agreements. The Lessee and the Pass Through Trustee
shall have entered into the Pass Through Agreement and the Series
Supplements, all conditions to the effectiveness of each thereof shall
have been satisfied or waived, and the Pass Through Certificates shall
have been issued pursuant to the Series Supplements. The Lessee and the
Underwriters shall have entered into the Underwriting Agreement, all
conditions to the effectiveness thereof shall have been satisfied or
waived, and the Pass Through Certificates shall have been delivered
pursuant to the Underwriting Agreement. All conditions to the
effectiveness of each Liquidity Facility shall have been satisfied or
waived.
(o) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements
referred to in subparagraph (f) of this Section 4.01, or in connection with
the issuance of the Certificates shall have been duly paid or caused to be
paid in full; and (B) all sales or use taxes and duties related to the
consummation of the transactions contemplated by the Operative Agreements
on the Certificate Closing Date which are then due and payable shall have
been duly paid in full.
(p) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Certificate Closing Date in connection with the transactions contemplated
by this Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Certificate Closing Date in
connection with the transactions contemplated by this Agreement shall have
been issued, and all such permits shall be in full force and effect on the
Certificate Closing Date.
(q) Section 131.3 of the New York State Banking Law Filing. SSB
shall have delivered evidence of its filing made with the New York
Superintendent of Banking pursuant to Section 131.3 of the New York State
Banking Law.
Section 4.02. Conditions Precedent (Delivery Date). Subject to the
last paragraph of this Section 4.02, the obligations of the Owner Trustee, the
Owner Participant, the Indenture Trustee, the Subordination Agent and the Pass
Through Trustee on behalf of each Pass Through Trust to participate in the
transactions contemplated hereby on the Delivery Date are subject to the
fulfillment to the satisfaction of each party (or waiver by such party), prior
to or on the Delivery Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligation of any party):
(a) Notice, Etc. Each party hereto shall have received a Delivery
Notice pursuant to Section 3.01 hereof at least three (3) Business Days
prior to the Delivery Date.
(b) Legal Investment. No change shall have occurred after the
Certificate Closing Date and on or prior to the Delivery Date in applicable
laws or regulations, or interpretations of any such laws or regulations by
applicable regulatory authorities, which, in the opinion of the Owner
Participant or its special counsel, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee or their special counsel,
would make it illegal for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, and no change in circumstances shall have occurred which would
otherwise make it illegal or otherwise in contravention of guidance issued
by regulatory authorities for the Owner Participant, the Lessee, the Owner
Trustee, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee, to participate in the transactions to be consummated on the
Delivery Date; and no action or proceeding shall have been instituted nor
shall governmental action before any court, governmental authority or
agency be threatened which in the opinion of counsel for the Owner
Participant, the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee is not frivolous, nor shall any order have been issued or
proposed to be issued by any court, or governmental authority or agency, as
of the Delivery Date, to set aside, restrain, enjoin or prevent the
consummation of any of the transactions contemplated by this Agreement or
by any of the other Operative Agreements.
(c) Documents. The documents referred to in Section 4.01(d) hereof
shall each be in full force and effect and the following documents shall
have been duly authorized, executed and delivered by the respective party
or parties thereto, shall each be satisfactory in form and substance to the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee,
the Subordination Agent and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would be
a default thereunder, and copies executed or certified as requested by the
Lessee, the Owner Trustee, the Indenture Trustee, the Pass Through Trustee
or the Owner Participant, as the case may be, of such documents shall have
been delivered to the Owner Participant, the Lessee, the Indenture Trustee,
the Pass Through Trustee and the Owner Trustee (provided that the sole
chattel-paper original of the Lease Supplement shall be delivered to the
Indenture Trustee):
(i) the Lease Supplement covering the Aircraft, dated the Delivery
Date;
(ii) an Indenture and Security Agreement Supplement covering the
Aircraft, dated the Delivery Date;
(iii) the Invoice;
(iv) AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale and the
Airbus Guaranty;
(v) the Consent and Agreement and the AVSA Consent and Agreement;
and
(vi) the Engine Warranty Assignment and the Engine Consent.
(d) Legal Opinions. The Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee and the Indenture
Trustee (acting directly or by authorization to its special counsel) shall
have received from the following counsel their respective legal opinions in
each case satisfactory to the Owner Participant, the Underwriters, the
Lessee, the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be, as to scope and substance (and covering such
other matters as the recipient may reasonably request) and dated the
Delivery Date:
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of the Lessee, in the
form of Exhibit A(1)(a)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Indenture Trustee;
(ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel for the Lessee, in the
form of Exhibit A(1)(b)(ii) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee;
(iii) ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP, special counsel for the Owner
Trustee, in the form of Exhibit A(4)(a)(ii) hereto and addressed to
the Underwriters, the Owner Participant, the Indenture Trustee, the
Owner Trustee, the Pass Through Trustee, each Liquidity Provider and
the Lessee;
(iv) counsel for the Engine Manufacturer, in the form of Exhibit
A(7) hereto and addressed to the Underwriters, the Owner Participant,
the Indenture Trustee, the Owner Trustee, the Pass Through Trustee,
each Liquidity Provider and the Lessee;
(v) ▇▇▇▇▇▇▇▇ Chance, special counsel for AVSA and the
Manufacturer, in the form of Exhibit A(8) hereto and addressed to the
Underwriters, the Owner Participant, the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee, each Liquidity Provider and the
Lessee;
(vi) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special aviation counsel, in
the form of Exhibit A(9) hereto and addressed to the Underwriters,
the Owner Participant, the Indenture Trustee, the Owner Trustee, the
Pass Through Trustee, each Liquidity Provider and the Lessee; and
(vii) in the case of the Owner Participant only, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, tax counsel to the Owner Participant,
addressed to the Owner Participant, with respect to certain tax
matters.
(e) Title, Airworthiness and Registration. On the Delivery Date,
the following statements shall be true, and the Owner Participant, the
Indenture Trustee, the Pass Through Trustee and the Owner Trustee shall
have received evidence from the Lessee reasonably satisfactory to the
Owner Participant, the Indenture Trustee, the Pass Through Trustee and
the Owner Trustee to the effect that:
(i) the Owner Trustee has good and marketable title (subject to
filing and recording of AVSA's FAA ▇▇▇▇ of Sale with the Aeronautics
Authority) to the Aircraft, free and clear of Liens, except the
rights of the Owner Trustee and the Lessee under the Lease and the
Lease Supplement covering the Aircraft, the rights of the Indenture
Trustee under the Indenture and the beneficial interest of the Owner
Participant created by the Trust Agreement and the interest of the
Certificate Holders created by the Indenture and the Indenture and
Security Agreement Supplement covering the Aircraft, which evidence
shall include AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale
and the Airbus Guaranty;
(ii) the Aircraft has been duly certificated by the Aeronautics
Authority as to type and airworthiness in accordance with the terms
of the Operative Agreements;
(iii) AVSA's FAA ▇▇▇▇ of Sale, the Lease and Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft and the Trust Agreement
shall have been duly filed for recordation (or shall be in the
process of being so duly filed for recordation) with the Aeronautics
Authority pursuant to the Transportation Code; and
(iv) application to the Aeronautics Authority for registration of
the Aircraft in the name of the Owner Trustee shall have been duly
made and the Lessee shall have temporary or permanent authority to
operate the Aircraft.
(f) Financing Statements. A UCC notice filing describing the Lease
as a lease shall have been executed and delivered by the Owner Trustee, as
lessor, and the Lessee, as lessee (which filing shall name the Indenture
Trustee as assignee of the Owner Trustee) and shall have been duly filed in
the State of Tennessee.
(g) Payments. The Owner Participant shall have made available its
Commitment to the Owner Trustee and the other payments contemplated by
Section 3.02 hereof shall have been made.
(h) Report of Aircraft Expert. The Owner Participant shall have
received a report prepared by BK Associates, Inc. addressed to the Owner
Participant (with an abbreviated report to the Lessee) which report shall
be in form and substance satisfactory to the Owner Participant to the
effect, among other things, that on the Delivery Date:
(i) (A) the estimated fair market value of the Aircraft net of
any cost to the Owner Participant or the Owner Trustee of return at
the end of the Basic Term and any Fixed Renewal Term (determined
without including in such value any increase or decrease for
inflation or deflation during the Term) is equal to or greater than
20% of the Purchase Price for the Aircraft and (B) at least 20% of
the useful economic life of the Aircraft will be remaining at the end
of the Basic Term and any Fixed Renewal Term;
(ii) the estimated useful life of the Aircraft is at least 133% of
the Basic Term and any Fixed Renewal Term;
(iii) the Purchase Price of the Aircraft is no greater than the
fair market value of the Aircraft on the Delivery Date;
(iv) on the Delivery Date, the Aircraft will not require any
modifications, improvements or additions in order to be rendered
complete for its intended purpose by the Lessee;
(v) the amount payable by the Lessee upon the exercise of its
purchase option pursuant to Section 4.02(a)(F) of the Lease equals or
exceeds the currently estimated Fair Market Value of the Aircraft on
such date (taking into account inflation or deflation to such date);
and
(vi) the Aircraft is not limited use property.
(i) Insurance. Each of the Indenture Trustee, the Pass Through
Trustee, the Owner Trustee and the Owner Participant shall have received
such evidence as it deems appropriate, including, without limitation, an
independent insurance broker's report, together with certificates of
insurance from such broker, in form and substance satisfactory to the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee and the
Owner Participant to establish that the insurance required by Article 13 of
the Lease is in effect.
(j) Payment of Taxes. (A) All taxes, fees, charges, assessments,
costs and other expenses then due and payable in connection with the
execution, delivery, recording and filing of all financing statements and
the documents and instruments referred to in subparagraphs (e) and (f) of
this Section 4.02, or in connection with the purchase of the Aircraft by
the Owner Trustee and the making by the Owner Participant of its equity
investment shall have been duly paid or caused to be paid in full; and (B)
all sales or use taxes and duties related to the consummation of the
transactions contemplated by the Operative Agreements on the Delivery Date
which are then due and payable shall have been duly paid in full.
(k) No Indenture Event of Default. No Indenture Event of Default or
Indenture Default has occurred and is continuing.
(l) Event of Default; Default; Event of Loss. No Default or Event
of Default under the Lease (assuming, for this purpose, that the provisions
of Article 16 of the Lease had become operative on the Certificate Closing
Date and not the Delivery Date) or Event of Loss or event, which with the
passage of time or if continued unremedied or unaltered would constitute an
Event of Loss, shall have occurred or be in existence.
(m) Governmental Compliance. All appropriate action required to
have been taken by the FAA, the SEC, or any governmental or political
agency, subdivision or instrumentality of the United States, prior to the
Delivery Date in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals (collectively "permits") of such
entities required to be in effect on the Delivery Date in connection with
the transactions contemplated by this Agreement shall have been issued, and
all such permits shall be in full force and effect on the Delivery Date.
(n) Officer's Certificate of Lessee. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Owner
Trustee, the Pass Through Trustee and the Indenture Trustee shall have
received a certificate signed by the Vice President and Treasurer or any
other duly authorized officer of the Lessee, dated the Delivery Date,
stating that:
(i) the representations and warranties of the Lessee contained in
the Operative Agreements to which it is a party (excluding the Tax
Indemnity Agreement) and in any certificate delivered pursuant hereto
or thereto are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 (as updated by Note 7 to the financial
statements included in the Lessee's Quarterly Reports on Form 10-Q
for the fiscal quarters ended August 31, 1996, November 30, 1996 and
February 28, 1997) and (ii) in the Lessee's Current Reports on Form
8-K dated June 7, 1996, August 16, 1996 and March 4, 1997, as to
which such officer will make no certification concerning the
liability of the Lessee (if any), or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, no material adverse change has occurred in
the financial condition, business or operations of the Lessee from
that shown in the audited financial statements of the Lessee as of
May 31, 1996 and nothing has occurred which will, in the judgment of
such officer, materially adversely affect the ability of the Lessee
to carry on its business or to perform its obligations under this
Agreement and each other Operative Agreement to which it is or is to
be a party; and
(iii) no event has occurred and is continuing, or would result
from the purchase, sale, mortgage, or lease of the Aircraft, which
constitutes an Event of Loss (or event which with the passage of time
would become an Event of Loss) with respect to the Airframe or any
Engine, or a Default or an Event of Default under the Lease.
(o) Officer's Certificate of Owner Participant and Owner Participant
Guarantor. On the Delivery Date, the following statements shall be true,
and the Lessee, the Pass Through Trustee, the Owner Trustee and the
Indenture Trustee shall have received a certificate from the Owner
Participant, signed by a duly authorized officer of (i) the Owner
Participant dated the Delivery Date, stating that:
(i) the representations and warranties of the Owner Participant
contained in this Agreement, the Trust Agreement and any other
Operative Agreement (excluding the Tax Indemnity Agreement) to which
it is a party and in any certificate delivered pursuant hereto or
thereto, are true and correct on and as of the Delivery Date as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) no Lessor's Liens attributable to the Owner Participant
exist; and
(iii) no event has occurred and is continuing which constitutes
or, with notice or lapse of time or both would constitute, due to any
action or omission on the part of the Owner Participant, an Indenture
Event of Default other than an Indenture Event of Default
attributable to a Lease Event of Default.
and (ii) from the Owner Participant Guarantor, signed by a duly authorized
officer of such Owner Participant Guarantor dated the Certificate Closing
Date, stating that the representations and warranties of such Owner
Participant Guarantor contained in its Owner Participant Guaranty and in
any certificate delivered at the closing pursuant thereto are true and
correct on and as of the Certificate Closing Date as though made on and as
of such date (except to the extent that such representations and warranties
relate solely to an earlier date, in which case such certificate shall
state that such representations and warranties were true and correct on and
as of such earlier date).
(p) Other Officer's Certificates. On the Delivery Date, the
following statements shall be true, and the Owner Participant, the Lessee,
the Pass Through Trustee, the Owner Trustee, the Subordination Agent and
the Indenture Trustee shall have received a certificate from each of SSB
and the Owner Trustee (in the case of the Lessee, the Pass Through Trustee,
the Owner Participant, the Subordination Agent and the Indenture Trustee),
FSB and the Indenture Trustee (in the case of the Lessee, the Pass Through
Trustee, the Owner Participant, the Subordination Agent and the Owner
Trustee), FSB and the Pass Through Trustee (in the case of the Lessee, the
Indenture Trustee, the Owner Participant, the Subordination Agent and the
Owner Trustee) and FSB and the Subordination Agent (in the case of the
Lessee, the Indenture Trustee, the Owner Participant, the Pass Through
Trustee and the Owner Trustee) signed by a duly authorized officer of SSB
and FSB, respectively, dated the Delivery Date, stating with respect to SSB
and the Owner Trustee, with respect to FSB and the Indenture Trustee, with
respect to FSB and the Pass Through Trustee or with respect to FSB and the
Subordination Agent, as the case may be, that:
(i) the representations and warranties of SSB in its individual
capacity and as Owner Trustee, of FSB in its individual capacity and
as Indenture Trustee, of FSB in its individual capacity and as Pass
Through Trustee or of FSB in its individual capacity and as
Subordination Agent contained in this Agreement, the Lease, the Trust
Agreement and the Indenture and in any certificate delivered pursuant
hereto or thereto are true and correct on and as of the Delivery Date
as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date, in
which case such certificate shall state that such representations and
warranties were true and correct on and as of such earlier date);
(ii) to the best of its knowledge, no event has occurred and is
continuing, which constitutes or which, but for the lapse of time or
the giving of notice, or both, would constitute, due to any action or
omission on the part of SSB in its individual capacity or as Owner
Trustee, of FSB in its individual capacity or as Indenture Trustee,
of FSB in its individual capacity or as Pass Through Trustee, an
Event of Default or an Indenture Event of Default or of FSB in its
individual capacity or as Subordination Agent, an Event of Default or
an Indenture Event of Default; and
(iii) there are no Lessor's Liens attributable to the Owner
Trustee or SSB and no Indenture Trustee's Liens affecting the Trust
Indenture Estate or the Lessor's Estate or any part thereof.
(q) Release of Debt Portion. The Indenture Trustee shall have
released the Debt Portion from (or such lesser amount as may then be held
in) the Collateral Account or if the proviso to Section 3.02(a) is
applicable, then the Lessee shall have made the payment required to be made
to AVSA pursuant to such proviso.
Notwithstanding anything else to the contrary in this Section 4.02, it shall
not be a condition precedent to the obligations of the Indenture Trustee, the
Pass Through Trustee or the Subordination Agent that the conditions in Section
4.02(n) and (o) be satisfied if the Lessee certifies that the failure to
fulfill such condition precedent is not reasonably likely to materially
adversely affect the holders of Pass Through Certificates and, in the event of
such failure, there has been delivered to the Indenture Trustee written
confirmation from both ▇▇▇▇▇'▇ and S&P of the rating on any class of Pass
Through Certificates.
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.
Promptly upon the registration of the Aircraft and the filing and, where
appropriate, recordation pursuant to the Transportation Code, of AVSA's FAA
▇▇▇▇ of Sale, the Trust Agreement, the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security Agreement
Supplement covering the Aircraft attached as exhibits) and the Indenture (with
the Indenture and Security Agreement Supplement covering the Aircraft attached
as an exhibit), the Lessee shall cause Special Aviation Counsel to deliver to
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through Trustee
and the Indenture Trustee an opinion as to (i) the due registration of the
Aircraft in the name of the Owner Trustee, (ii) the due recording pursuant to
the Transportation Code of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Lease (with such Lease Supplement, the Indenture and such Indenture and
Security Agreement Supplement attached as exhibits), and the Indenture (with
such Indenture and Security Agreement Supplement attached as an exhibit), and
(iii), subject to customary qualifications, the lack of any intervening
documents with respect to the Aircraft.
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations. The
Lessee's obligation to participate in the transactions contemplated hereby on
the Certificate Closing Date is subject to the conditions that, prior to or on
the Certificate Closing Date, the Lessee shall have received the certificates
and other documents which are referred to in, or the opinions to be addressed
to it under, as the case may be, paragraphs (d), (g)(ii)-(v), (i), (j),
(k)(ii)-(vi) of Section 4.01 hereof and the Underwriters shall have made
available the amounts required to be paid by them pursuant to Section 2.01
hereof, and the Lessee's obligation to participate in the transactions
contemplated hereby on the Delivery Date, is subject to the conditions that,
on or prior to the Delivery Date, the Lessee shall have received the documents
which are referred to in, or the opinions to be addressed to it under, as the
case may be, paragraphs (c) and (d)(ii)-(v) of Section 4.02 hereof and the
Indenture Trustee shall have released the Debt Portion from (or such lesser
amount as may then be held in) the Collateral Account.
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties. The Lessee
represents and warrants to the Owner Participant, the Owner Trustee (in its
individual capacity and as Owner Trustee), the Pass Through Trustee (in its
individual capacity and as Pass Through Trustee), each Liquidity Provider and
the Indenture Trustee (in its individual capacity and as Indenture Trustee)
that, on the date hereof and as of the Certificate Closing Date and the
Delivery Date (unless any such representation is specifically made as of one
date):
(a) the Lessee is a corporation duly organized and validly existing
and is in good standing under the laws of the State of Delaware with its
principal place of business and chief executive office (as such terms are
used in Article 9 of the Uniform Commercial Code) in Memphis, Tennessee,
and is duly qualified to do business as a foreign corporation and is in
good standing in all jurisdictions in which it has intrastate routes, or
offices or major overhaul facilities or in which other activities of the
Lessee require such qualification;
(b) the Lessee has full power, authority and legal right to conduct
its business and operations as currently conducted and to own or hold under
lease its Properties and to enter into and perform its obligations under
this Agreement, the other Operative Agreements to which it is a party, the
Pass Through Agreement and the Series Supplements (the "Lessee Documents");
(c) the Lessee is an "air carrier" within the meaning of the
Transportation Code and a holder of a certificate under Sections 41102(a)
and 41103 of the Transportation Code and a "citizen of the United States"
within the meaning of Section 40102(a)(15) of the Transportation Code
holding an "air carrier operating certificate" issued under Chapter 447 of
the Transportation Code for aircraft capable of carrying ten (10) or more
individuals or 6,000 pounds or more of cargo, and each such certificate is
in full force and effect;
(d) the Lessee possesses all necessary certificates, franchises,
licenses, permits, rights and concessions and consents (collectively
"permits") which are material to the operation of the routes flown by it
and the conduct of its business and operations as currently conducted and
each such permit is in full force and effect;
(e) the execution, delivery and performance of the Lessee Documents
by the Lessee have been duly authorized by all necessary corporate action
on the part of the Lessee and do not require any stockholder approval, or
approval or consent of any trustee or holder of any indebtedness or
obligations of the Lessee, and each such document has been duly executed
and delivered or, in the case of the Operative Agreements identified in
Section 4.02(c) hereof, will on the Delivery Date be executed and delivered
by the Lessee and constitutes (or will constitute, as the case may be) the
legal, valid and binding obligations of the Lessee enforceable against it
in accordance with the terms thereof except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws or equitable principles of general application to or affecting
the enforcement of creditors' rights generally (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(f) no authorization, consent or approval of or other action by, and
no notice to or filing with, any United States federal or state
governmental authority or regulatory body (other than the SEC) is required
for the execution, delivery or performance by the Lessee of the Lessee
Documents or for the use and maintenance of the Aircraft except for such
registrations, applications and recordings referred to in the opinions of
Special Aviation Counsel delivered or to be delivered pursuant to Sections
4.02(d)(iii) and 4.03 hereof and except for the filings referred to in
Sections 4.01(f) and 4.02(f) hereof, all of which shall have been duly
obtained or made and shall be in full force and effect on and as of the
Certificate Closing Date or the Delivery Date, or as contemplated by said
Sections;
(g) neither the execution, delivery or performance by the Lessee of
the Lessee Documents nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent (other than the Consent and Agreement, the AVSA
Consent and Agreement, the Engine Consent and the Consent and Guaranty) or
approval under, any law, governmental rule or regulation or the charter
documents, as amended, or bylaws, as amended, of the Lessee or any order,
writ, injunction or decree of any court or governmental authority against
the Lessee or by which it or any of its Properties is bound or any
indenture, mortgage or contract or other agreement or instrument to which
the Lessee is a party or by which it or any of its Properties is bound, or
constitutes or will constitute a default thereunder or results or will
result in the imposition of any Lien upon any of its Properties;
(h) there are no pending or, to the knowledge of the Lessee,
threatened actions, suits, investigations or proceedings (whether or not
purportedly on behalf of the Lessee) against or affecting the Lessee or any
of its Property before or by any court or administrative agency which (A)
involve the Aircraft, (B) except for the matters described (i) under "Legal
Proceedings" in the Lessee's Annual Report on Form 10-K for the fiscal year
ended May 31, 1996 (as updated by Note 7 to the financial statements
included in the Lessee's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (ii) in the Lessee's Current Reports on Form 8-K dated June 7, 1996,
August 16, 1996 and March 4, 1997, as to which no representation is made
concerning the Lessee's liability (if any) or the effect of any adverse
determination upon the consolidated financial condition, business or
operations of the Lessee, if adversely determined, would materially and
adversely affect the consolidated financial condition, business or
operations of the Lessee, or (C) if adversely determined would adversely
affect the ability of the Lessee to perform its obligations under the
Lessee Documents;
(i) the Lessee has filed or caused to be filed all tax returns which
are required to be filed and has paid or caused to be paid all taxes shown
to be due and payable pursuant to such returns or pursuant to any
assessment received by the Lessee (other than assessments the payment of
which is being contested in good faith by the Lessee by appropriate
proceedings that do not involve any material danger of sale, forfeiture or
loss of the Aircraft or any part thereof), and the Lessee has no knowledge
of any related actual or proposed deficiency or additional assessment which
either in any case or in the aggregate would materially adversely affect
the Lessee's consolidated financial condition (other than, in any such case,
assessments, the payment of which is being contested in good faith by the
Lessee, as to which no representation is made concerning the Lessee's
liability (if any) or the effect of any adverse determination upon the
Lessee's consolidated financial condition);
(j) except for (A) the registration in the Owner Trustee's name of
the Aircraft pursuant to the Transportation Code to be accomplished by
filing with the FAA, of AVSA's FAA ▇▇▇▇ of Sale, the Trust Agreement, the
Affidavits and the Application, (B) the filing with and, where appropriate,
recordation by the FAA pursuant to the Transportation Code of the
Indenture, the Indenture and Security Agreement Supplement covering the
Aircraft, the Lease and the Lease Supplement covering the Aircraft, (C) the
filing of the financing statements referred to in Sections 4.01(f) and
4.02(f) hereof and (D)(x) on the Certificate Closing Date, the taking of
possession by the Indenture Trustee of the Liquid Collateral and
maintaining possession by the Indenture Trustee thereof as contemplated in
Section 2.14(a) of the Indenture and (y) on the Delivery Date, the taking
of possession by the Indenture Trustee of the original counterpart of the
Lease and the Lease Supplement covering the Aircraft, no further action,
including any filing or recording of any document, is necessary or
advisable in order (i) to establish the Owner Trustee's title to and
interest in the Aircraft and the Lessor's Estate as against the Lessee and
any third parties, or (ii) to perfect the first security interest in and
mortgage Lien on the Trust Indenture Estate in favor of the Indenture
Trustee;
(k) on the Delivery Date, the Owner Trustee has received good and
marketable title to the Aircraft, free and clear of all Liens, except the
rights of the Lessee under the Lease and the Lease Supplement, the rights
of the Indenture Trustee under the Indenture and the beneficial interest of
the Owner Participant created by the Trust Agreement;
(l) the Lessee has heretofore delivered to the Owner Participant
true and correct copies of the Lessee's Annual Report on Form 10-K for the
fiscal year ended May 31, 1996 and its Quarterly Reports on Form 10-Q for
the fiscal quarters ended August 31, 1996, November 30, 1996 and February
28, 1997, and of the audited consolidated balance sheet of the Lessee for
the fiscal year ended May 31, 1996 and the unaudited consolidated balance
sheets of the Lessee as of August 31, 1996, November 30, 1996 and February
28, 1997, and the related consolidated statements of income, changes in
common stockholders' investment and cash flows for the fiscal year and
interim reporting periods ended on such dates, accompanied (except in the
case of such interim reporting periods) by a report thereon containing
opinions without qualification, except as therein noted, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent public accountants; said financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and present fairly the financial position of the
Lessee as of such dates and the results of its operations and cash flows
for such periods and such Annual Report, Quarterly Reports and financial
statements did not, as of their respective dates of filing with the SEC,
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein not misleading;
(m) with respect to ERISA:
(i) none of the Pension Plans (as defined at the end of this
Section 6.01(m)) nor their related trusts have been terminated in a
distress termination pursuant to Section 4041(c) of ERISA or by the
Pension Benefit Guaranty Corporation (together with any successor
agency or instrumentality thereto, the "PBGC") pursuant to Section
4042 of ERISA, nor have any actions been taken to so terminate any
Pension Plan or related trust and neither the Lessee nor any ERISA
Affiliate (as defined at the end of this Section 6.01(m)) has
incurred or could reasonably be expected to incur any material
liability with respect to a Pension Plan under Section 4062, 4063,
4064 or 4069 of ERISA;
(ii) there have been no "reportable events" (as such term is
defined in Section 4043(b) of ERISA) with respect to any Pension Plan
which have resulted or could reasonably be expected to result in any
material liability of the Lessee or any ERISA Affiliate;
(iii) no "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA or Section 412 of the Code) exists with
respect to any Pension Plan, whether or not waived, nor has any
request for a waiver under Section 412(d) of the Code been, or is
reasonably likely to be, filed with respect to any of the Pension
Plans;
(iv) neither the Lessee nor any ERISA Affiliate has failed to make
any contribution or payment to any Pension Plan which has resulted or
could reasonably be expected to result in the imposition of a Lien
under Section 302(f) of ERISA or Section 412(n) of the Code;
(v) all Pension Plans are in compliance in all material respects
with all applicable provisions of ERISA and the Code;
(vi) neither the Lessee nor any ERISA Affiliate has incurred or is
reasonably likely to incur any material withdrawal liability pursuant
to Section 4201 or 4204 of ERISA or any material liability under
Section 515 of ERISA;
(vii) to the best of the Lessee's knowledge, neither the Lessee
nor any ERISA Affiliate has engaged in a "prohibited transaction"
(within the meaning of Section 4975 of the Code or Section 406 of
ERISA) which could reasonably be expected to subject the Lessee to
the tax or penalties on prohibited transactions imposed by Section
4975 of the Code or Section 502 of ERISA; and
(viii) assuming the truth of the representations contained in
Section 7.09 hereof and compliance with Section 10.06 of the
Indenture, the execution and delivery of this Agreement and the other
Operative Agreements and the consummation of the transactions
contemplated hereby and thereby will not involve any transaction
which is prohibited by Section 406 of ERISA or in connection with
which a tax could be imposed pursuant to Section 4975 of the Code.
No part of the funds to be used by the Lessee in satisfaction of its
obligations under this Agreement or any other of the Operative
Agreements to which the Lessee is a party or to which the Lessee is
bound are the assets of any employee benefit plan subject to Title I
of ERISA, or any individual retirement account or an employee benefit
plan subject to Section 4975 of the Code;
as used in this Section 6.01(m), the term "Pension Plan" means an employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA) which is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and which is maintained, or contributed to,
by the Lessee or any ERISA Affiliate, and the term "ERISA Affiliate" means
any entity which together with the Lessee would be treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code;
(n) the Lessee is a Citizen of the United States;
(o) except for the filings referred to in Sections 4.01(f), 4.02(e)
and 4.02(f) hereof, no governmental approval of any kind is required of the
Owner Participant or for the Owner Participant's execution of or
performance under this Agreement or any agreement contemplated hereby by
reason of any fact or circumstance of the Lessee, the nature of the
Aircraft or the Lessee's proposed operations or use of the Aircraft;
(p) on the Delivery Date, all premiums with respect to the insurance
required to be provided by the Lessee on or prior to the Delivery Date
under Article 13 of the Lease have been paid by the Lessee;
(q) on the Delivery Date, all sales or use taxes relating to the
sale of the Aircraft by AVSA to the Owner Trustee which are then or were
theretofore due shall have been paid;
(r) the Lessee is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Lessee is a
party or by which it or any of its Properties or assets may be bound, or in
violation of any applicable law, which default or violation would have a
material adverse effect on the financial condition, business or operations
of the Lessee or its ability to perform any of its obligations under the
Lessee Documents;
(s) no Default or Event of Default or Event of Loss or event, which
with the passage of time or if continued unremedied or unaltered would
constitute an Event of Loss, has occurred or exists;
(t) on the Delivery Date, the Aircraft will be in such condition so
as to enable the airworthiness certificate of such Aircraft to be in good
standing under the Transportation Code; the Aircraft will have been duly
certificated by the FAA as to type and airworthiness; there will be in
effect with respect to the Aircraft a current and valid airworthiness
certificate issued by the FAA pursuant to the Transportation Code; and
there is no fact known to the Lessee which materially adversely affects the
value, utility or condition of the Aircraft;
(u) on the Certificate Closing Date and the Delivery Date, the
Lessee shall not be in default in the performance of any term or condition
of the Purchase Agreement, the Purchase Agreement Assignment, the Engine
Warranty Assignment and the GTA and the aggregate amount of loans shall not
exceed the Debt Portion;
(v) neither the Lessee nor any subsidiary of the Lessee is an
"investment company" or a company "controlled by an investment company"
within the meaning of the Investment Company Act of 1940, as amended;
(w) on the Delivery Date, the Aircraft will, upon delivery, be fully
equipped to operate in commercial service and will comply with all
governmental requirements governing such service; and
(x) there are no broker's or underwriter's fees payable on behalf
of the Lessee in connection with the transactions contemplated in the
Operative Agreements other than those of the Underwriters and First
Chicago Leasing Corporation referred to in Article 10 hereof.
Section 6.02. Offering by Lessee. The Lessee represents and
warrants that it has authorized no one to act on its behalf in connection with
the offer or sale of any interest in the Lessor's Estate or the Trust
Agreement other than First Chicago Leasing Corporation. Neither the Lessee
nor, based on representations of First Chicago Leasing Corporation, anyone
acting on its behalf has directly or indirectly offered any interest in the
Lessor's Estate or the Trust Agreement, or similar interests, for sale to, or
solicited any offer to acquire any of the same from, anyone other than the
Owner Participant and no more than 15 other accredited investors (as such term
is defined in Regulation D promulgated under the Securities Act of 1933, as
amended).
Section 6.03. Certain Covenants of Lessee. The Lessee covenants and
agrees with the Owner Participant, the Owner Trustee (in its individual
capacity and as Owner Trustee), the Pass Through Trustee (in its individual
capacity and as Pass Through Trustee) and the Indenture Trustee (in its
individual capacity and as Indenture Trustee) as follows:
(a) The Lessee will cause to be done, executed, acknowledged and
delivered at the Lessee's cost and expense all such further acts,
conveyances and assurances as the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee or the Owner Participant shall reasonably require for
accomplishing the purposes of this Agreement, the Trust Agreement, the
Purchase Agreement, the Purchase Agreement Assignment, the GTA, the Engine
Warranty Assignment, the Indenture, the Indenture and Security Agreement
Supplement, the Tax Indemnity Agreement, the Lease and the Lease Supplement
and the other Operative Agreements to which it is a party. Without
limiting the generality of this Section 6.03(a), the Lessee will promptly
take, or cause to be taken, at the Lessee's cost and expense, such action
with respect to the recording, filing, re-recording and re-filing of the
Indenture, each Indenture and Security Agreement Supplement, the Lease,
each Lease Supplement and any financing statements or other instruments as
may be necessary, or as requested by the Indenture Trustee and appropriate,
to maintain the perfection of the first security interest and the Lien
created by the Indenture, and the Owner Trustee's title to and interest in
the Aircraft and the Lessor's Estate as against the Lessee and any third
parties or if the Lessee cannot take, or cause to be taken, such action,
will furnish to the Indenture Trustee and the Owner Trustee timely notice
of the necessity of such action, together with such instruments, in
execution form, and such other information as may be required to enable
either of them to take such action at the Lessee's cost and expense in a
timely manner.
(b) From and after the Delivery Date, the Lessee shall maintain the
certificates referred to in Section 7.01 of the Lease and shall cause the
Aircraft to be duly registered, and at all times to remain duly registered,
in the name of the Owner Trustee, under the Transportation Code, and shall
furnish to the Owner Trustee such information as may be required to enable
the Owner Trustee to make application for such registration; provided,
however, that the Owner Participant, the Owner Trustee and the Indenture
Trustee agree that if at any time after December 31, 2004, so long as no
Event of Default shall have occurred and be continuing, the Lessee has
requested their consent to the registration of the Aircraft in the name of
the Owner Trustee (or, if appropriate under the laws of such
jurisdiction of reregistration, in the name of the Lessee or a sublessee
as a "lessee" or a "sublessee"), at the Lessee's expense, in a country
listed in Schedule III hereto with which the United States then
maintains normal diplomatic relations (and which is not then
experiencing war or substantial civil unrest), the Owner Participant,
the Owner Trustee and the Indenture Trustee upon receipt by the Owner
Participant, the Owner Trustee and the Indenture Trustee of the
assurances and opinion described below, shall not unreasonably withhold
their consent to such change in registration (it being agreed, without
limitation, that the inability of the Lessee to deliver such assurances
or such opinion shall constitute reasonable grounds to withhold such
consent).
As a condition to any change in the registration of the Aircraft, the
Owner Participant, the Owner Trustee in its individual and trust capacities,
and the Indenture Trustee shall have received:
(i) assurances satisfactory to them:
(A) to the effect that the insurance provisions of the Lease have
been and will be complied with and are and shall be in full force and
effect upon such change of registry;
(B) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft;
(C) that the Owner Trustee's right, title and interest in and to
the Aircraft is recognized and fully enforceable in the new
jurisdiction of registry, that the rights of the Owner Trustee in and
to the Aircraft will not be impaired in such new jurisdiction of
registry and that the new jurisdiction of registry will give effect
to the title and registry of the Aircraft therein substantially to
the same extent as does the Government;
(D) that such new country of registry (x) would provide
substantially equivalent protection for the rights of owner
participants, lessors or lenders in similar transactions as provided
under United States law (except that, in the absence of restrictions
under the laws of such country on rights and remedies of lessors and
secured parties similar to those imposed by Sections 362 and 363 of
the Bankruptcy Code, rights and remedies similar to those available
under Section 1110 of the Bankruptcy Code shall not be required) and
(y)(i) if such change in registration is made other than in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards at least comparable to those of
the FAA, and (ii) if such change in registration is made in
connection with a sublease permitted under Section 7.02(a)(i) of the
Lease, imposes maintenance standards in conformity with those set
forth in Section 7.02(a)(i) of the Lease;
(E) that import and export certificates and any exchange permits
necessary to allow all Rent and other payments provided for under the
Lease, if required, shall have been procured at the Lessee's own cost
and expense by the Lessee;
(F) that the Lessee shall have effected or caused to be effected
at the Lessee's own cost and expense all recordings and filings that
are required to perfect the Lien of the Indenture;
(G) to the effect that the original indemnities (and any
additional indemnities for which the Lessee is then willing to
enter into a binding agreement to indemnify) in favor of the Owner
Participant, the Owner Trustee (in its individual capacity and as
trustee under the Trust Agreement), the Indenture Trustee (in its
individual capacity, and as trustee under the Indenture), the Pass
Through Trustee (in its individual capacity, and as trustee under
the Pass Through Agreement) and the other Indemnitees under this
Agreement, the Indenture, the Pass Through Agreement and (in the
case of the Owner Participant only) the Tax Indemnity Agreement,
afford each such party substantially the same protection as
provided prior to such change of registry;
(H) that such change will not result in the imposition of, or
increase in the amount of, any Tax (which, for this purpose, includes
the loss of any tax benefits assumed by the Owner Participant to be
available to it based upon the assumptions set forth in Section 2 of
the Tax Indemnity Agreement) for which the Lessee has not agreed to
indemnify the Owner Participant to its reasonable satisfaction, the
Indenture Trustee, the Pass Through Trustee, the Owner Trustee (or
any successor, assign or Affiliate thereof) and the Trust Estate;
(I) that any value added tax, customs duty, tariff or similar
governmental charge relating to the change in jurisdiction of
registration of the Aircraft shall have been paid in full or
adequately provided for by the Lessee to the satisfaction of the
Owner Trustee, the Indenture Trustee and the Owner Participant;
(J) of the payment by the Lessee of any reasonable fees and
expenses of the Owner Participant, the Owner Trustee, the Indenture
Trustee and the Pass Through Trustee in connection with such change
of registry, including any reasonable attorneys' fees and expenses;
(K) that duties and tariffs, if applicable, shall have been paid
for by the Lessee;
(L) as to the continuation of the Lien of the Indenture as a
first priority, duly perfected Lien on the Aircraft and the Trust
Indenture Estate, that all recordings and filings required to so
perfect the Lien of the Indenture have been duly effected, and that
no Liens (except Liens permitted under Section 6.01 of the Lease)
shall arise by reason of such registration; and
(M) that appropriate deregistration powers of attorney in favor of
the Owner Trustee and the Indenture Trustee have been executed and
delivered by the Lessee and any sublessee and, if necessary or
desirable for the effectiveness thereof, filed with the relevant
aeronautics authority; and
(ii) a favorable opinion of counsel (reasonably satisfactory to the
Owner Trustee, the Indenture Trustee and the Owner Participant) in the new
jurisdiction of registry, addressed and reasonably satisfactory to such
parties in scope, form and substance, to the effect:
(A) that the terms (including, without limitation, the governing
law, service-of-process and jurisdictional-submission provisions
thereof) of the Lease and the Indenture are legal, valid, binding and
enforceable in such jurisdiction against the Lessee, any sublessee,
the Owner Trustee and the Indenture Trustee, respectively;
(B) that it is not necessary for the Owner Participant, the Owner
Trustee, the Indenture Trustee or the Pass Through Trustee to
register or qualify to do business or meet other requirements not
already met in such jurisdiction in connection with the registration
in the new jurisdiction (and the filing and/or recordation therein of
the Indenture or the Lease) and the exercise of any rights or
remedies with respect to the Aircraft pursuant to the Lease or the
Indenture or in order to maintain such registration and the Lien of
the Indenture;
(C) that the courts of such jurisdiction would provide
substantially equivalent protection to the Lessor, the Owner
Participant, the Pass Through Trustee and the Indenture Trustee as
provided under United States law (with the exception described in
paragraph (b)(i)(D)(x) of this Section 6.03) in respect of the
transactions contemplated hereby, including, without limitation, the
remedies provided in the Indenture and the Lease;
(D) that there is no tort liability of the beneficial owner,
record owner, lessor or mortgagee of an aircraft not in possession
thereof under the laws of such jurisdiction, other than tort
liability which might reasonably have been imposed on such owner,
lessor or mortgagee under the laws of the United States or any state
thereof (it being understood that, in the event such latter opinion
cannot be given in a form satisfactory to the Owner Trustee, the
Owner Participant and the Indenture Trustee, such opinion shall be
waived, if insurance reasonably satisfactory to the Owner
Participant, the Indenture Trustee and the Owner Trustee, in its
individual capacity, is provided, at the Lessee's expense, to cover
such risk and the Lessee undertakes to keep such insurance in full
force and effect);
(E) that the laws of such jurisdiction will not impair the rights
of the Lessor in and to the Aircraft or under the Lease and (unless
the Lessee shall have agreed to provide insurance reasonably
satisfactory to the Indenture Trustee and the Owner Participant
covering the risk of requisition of use of the Aircraft by the
government of registry of the Aircraft) require fair compensation by
the government of such jurisdiction payable in currency freely
convertible into United States dollars for the loss of use of the
Aircraft in the event of such requisition;
(F) that the Owner Trustee's title to the Aircraft is recognized
and fully enforceable in such jurisdiction, that such jurisdiction
will give effect to the title of the Aircraft therein substantially
to the same extent as does the Government, and that the Lien of the
Indenture shall continue as a first priority, duly perfected lien on
the Aircraft;
(G) to such further effect with respect to such other matters as
the Owner Participant, the Owner Trustee, or the Indenture Trustee may
reasonably request; and
(H) the Lien of the Indenture continues to constitute a first
priority, duly perfected Lien on the Aircraft.
(c) The Lessee shall promptly file any reports, or furnish to the
Owner Trustee and the Owner Participant such information as may be required
to enable the Owner Trustee and the Owner Participant timely to file any
reports required to be filed by the Owner Trustee as the Lessor and the
Owner Participant under the Lease with any governmental authority.
(d) The Lessee will cause the Special Aviation Counsel to file, and
where appropriate record, on the Delivery Date, AVSA's FAA ▇▇▇▇ of Sale,
the Lease, the Lease Supplement, the Trust Agreement, the Indenture and the
Indenture and Security Agreement Supplement. The following documents shall
be filed and, where appropriate, recorded on the Delivery Date with the
Aeronautics Authority in the following order of priority: first, AVSA's
FAA ▇▇▇▇ of Sale, second, the Application, with the Trust Agreement and the
Affidavits, third, the Indenture with the Indenture and Security Agreement
Supplement attached thereto, and fourth, the Lease with the Lease
Supplement, the Indenture and the Indenture and Security Agreement
Supplement attached thereto.
(e) The Lessee will furnish to the Owner Participant, the Owner
Trustee and the Indenture Trustee annually after the execution of this
Agreement, by March 15 of each year, commencing with the year 1998, an
opinion, reasonably satisfactory to the Owner Participant and the Indenture
Trustee, of Special Aviation Counsel, or other counsel specified from time
to time by the Lessee acceptable to the Lessor and the Indenture Trustee:
(i) stating either (1) that in the opinion of such counsel such action has
been taken with respect to the recording, filing, re-recording and
re-filing of the Lease, the Indenture, the Trust Agreement, and any
supplements to any of them and any financing statements, continuation
statements or other instruments, and all other action has been taken, as is
necessary to maintain the Owner Trustee's title to and interest in the
Aircraft and the Lessor's Estate as against the Lessee and any third
parties and to maintain the perfection of the security interests created by
said documents and reciting the details of such action, or (2) that in the
opinion of such counsel no such action is necessary to maintain such title
or the perfection of such security interests; (ii) specifying all other
action which needs to be taken during the succeeding 14 months in order to
maintain such title and the perfection of such security interests (which
the Lessee agrees timely to take); and (iii) stating that the Owner Trustee
is the owner of legal title to the Aircraft, and the Aircraft is free and
clear of all Liens, except the security interest created by the Indenture
and such as are permitted by the Lease and the Indenture.
(f) The Lessee shall at all times maintain its corporate existence
except as permitted by Section 6.03(g) hereof and all of its rights,
privileges and franchises necessary in the normal conduct of its business,
except for any corporate right, privilege or franchise (i) that it
determines, in its reasonable, good faith business judgment, is no longer
necessary or desirable in the conduct of its business and (ii) the loss of
which will not materially adversely affect or diminish the rights of the
Holders or the Owner Participant.
(g) The Lessee shall not enter into any merger or consolidation, or
convey, transfer or lease all or substantially all of its assets as an
entirety to any Person, unless the surviving corporation or Person which
acquires by conveyance, transfer or lease all or substantially all of the
assets of the Lessee as an entirety (i) is a domestic corporation organized
and existing under the laws of the United States or a political subdivision
thereof, (ii) is a Citizen of the United States, (iii) is a U.S. Air
Carrier, (iv) expressly assumes by an instrument in writing in form and
substance satisfactory to the Owner Participant, the Indenture Trustee and
the Owner Trustee all of the Lessee's obligations hereunder and under the
other Operative Agreements, and each other document contemplated hereby or
thereby and the Lessee delivers such instrument to the Indenture Trustee,
the Owner Participant and the Owner Trustee, (v) provides an opinion from
outside counsel to the Lessee which counsel shall be reasonably
satisfactory to the Owner Participant and the Indenture Trustee and which
opinion shall be reasonably satisfactory to the Owner Participant and the
Indenture Trustee, and an officer's certificate, each stating that such
merger, consolidation, conveyance, transfer or lease and the instrument
noted in clause (iv) above comply with this Section 6.03(g), that such
instrument is a legal, valid and binding obligation of, and is enforceable
against, such survivor or Person, and that all conditions precedent herein
provided for relating to such transaction have been complied with, and (vi)
immediately after such merger, consolidation or conveyance, transfer or
lease, as the case may be, the surviving company (or Person which acquires
by conveyance, transfer or lease the assets of the Lessee) is in compliance
with all of the terms and conditions of this Agreement and the Lease and
each other Operative Agreement and each other document contemplated hereby
or thereby; provided that no such merger, consolidation or conveyance,
transfer or lease shall be permitted if the same gives rise to an Event of
Default.
Upon any consolidation or merger, or any conveyance, transfer or
lease of all or substantially all of the assets of the Lessee and the
satisfaction of the conditions specified in this Section 6.03(g), the
successor corporation formed by such consolidation or into which the Lessee
is merged or the Person to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Lessee under this Agreement and the Lease and each other
Operative Agreement and any other document contemplated hereby and thereby
to which the Lessee is a party with the same effect as if such successor
corporation had been named as the Lessee herein and therein. No such
conveyance, transfer or lease of all or substantially all of the assets of
the Lessee as an entirety shall have the effect of releasing the Lessee or
any successor corporation which shall theretofore have become the Lessee
hereunder in the manner prescribed in this Section 6.03(g) from its
liability hereunder or under the other Operative Agreements. Nothing
contained herein shall permit any lease, sublease, or other arrangement for
the use, operation or possession of the Aircraft except in compliance with
the applicable provisions of the Lease.
(h) The Lessee agrees to give prompt written notice to the Owner
Participant, the Owner Trustee and the Indenture Trustee of any change in
the address of its chief executive office (as such term is used in Section
9-103(3) of the Tennessee Uniform Commercial Code) or of any change in its
corporate name.
(i) The Lessee agrees to furnish to the Owner Participant, the
Lessor and the Indenture Trustee:
(A) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Lessee, a
consolidated balance sheet as of the end of such fiscal year, and the
related consolidated statements of income, common stockholders'
equity, retained earnings and cash flows of the Lessee for the fiscal
year then ended as prepared and certified by the Lessee's independent
certified public accountants, including their opinion;
(B) within sixty (60) days after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Lessee,
a consolidated balance sheet of the Lessee prepared by it as of the
close of the accounting period then ended, together with the related
consolidated statements of income, retained earnings and cash flows
for such accounting period certified by the chief accounting officer
or a financial vice president of the Lessee;
(C) promptly upon their general transmission, copies of all
reports and statements furnished by the Lessee to its stockholders;
(D) promptly after filing with the SEC, copies of the Lessee's
Annual Reports on Form 10-K (including all corresponding annual
reports to shareholders), Quarterly Reports on Form 10-Q and, if
requested, any registration statement or prospectus filed by the
Lessee with any securities exchange or with the SEC;
(E) promptly upon (and in any event within five (5) Business Days
after) any officer of the Lessee obtaining knowledge of any condition
or event which constitutes a Default or an Event of Default, an
officer's certificate specifying the nature and period of existence
thereof and what action the Lessee has taken or is taking or proposes
to take with respect thereto;
(F) from time to time, such other financial information as the
Lessor, the Owner Participant or the Indenture Trustee may
reasonably request.
Concurrently with the delivery of the financial statements referred
to in clause (A) above, the Lessee shall deliver to the Lessor, the Owner
Participant, the Indenture Trustee and the Pass Through Trustee a certificate
of the Lessee, signed by any one of the President, the Chief Financial
Officer, the General Counsel, the Treasurer or the principal accounting
officer of the Lessee, stating that the signer, or an employee reporting to
same, is familiar with the relevant terms of this Agreement and the Lease and
the signer has reviewed, or has caused to be made under such Person's
supervision a review, of the activities of the Lessee and that, to the best of
his or her knowledge, there does not exist any Default or any Event of Default
or if a Default or an Event of Default exists or did exist, specifying the
nature thereof, the period of existence thereof and what action the Lessee has
taken or proposes to take with respect thereto.
Section 6.04. Survival of Representations and Warranties. The
representations and warranties of the Lessee provided in Sections 6.01 and
6.02 hereof and in any other Operative Agreement shall survive the Closings
hereunder and the delivery of the Aircraft and the expiration or other
termination of this Agreement and the other Operative Agreements.
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate. (a) [Reserved]
(b) Owner Participant. The Owner Participant represents and
warrants that its interest in the Lessor's Estate and the Trust Agreement is
being acquired by it for its own account and not with a view to resale or
distribution thereof; provided, however, that the disposition by the Owner
Participant of its interest in the Lessor's Estate and the Trust Agreement
shall, subject to the terms and provisions of Section 7.03(d) hereof (except
as provided in clause (ii) of Section 3.05(a) hereof), at all times be within
its control and the foregoing representation shall not limit the Owner
Participant's right to transfer or sell such interests pursuant to the terms
of this Agreement. Neither the Owner Participant nor anyone authorized to act
on its behalf has directly or indirectly offered any interest in the Lessor's
Estate or the Trust Agreement, or in any similar security, for sale to, or
solicited any offer to acquire any of the same from, anyone. The Owner
Participant further represents and warrants that neither it nor anyone
authorized to act on its behalf has made or will make any offer, solicitation
or sale of any interest in the Lessor's Estate or the Trust Agreement in
violation of the provisions of Section 5 of the Securities Act of 1933, as
amended. No representation in this Section 7.01(b) shall include any action
or inaction of the Lessee, First Chicago Leasing Corporation, the
Subordination Agent, the Underwriters or any Affiliates of any thereof whether
or not such action or inaction is purportedly on behalf of the Owner Trustee,
the Owner Participant or any of their Affiliates.
Section 7.02. Citizenship. (a) Generally. Each of the Owner
Trustee, in its individual capacity and as Trustee, and the Owner Participant
severally represents and warrants that it is or will be a Citizen of the
United States on the Delivery Date. If the Owner Participant or the Owner
Trustee in its individual capacity does not comply with the requirements of
this Section 7.02, the Owner Trustee, the Indenture Trustee and the Owner
Participant hereby agree that a Default or an Event of Default shall not be
deemed to have occurred and be continuing under the Lease due to
non-compliance by the Lessee with the registration requirements in the Lease
occasioned by the noncompliance of the Owner Participant or the Owner Trustee.
(b) Owner Trustee. The Owner Trustee, in its individual capacity,
covenants that if at any time on or after the Delivery Date it shall have
actual knowledge that it has ceased to be a Citizen of the United States, it
will resign immediately as the Owner Trustee if such citizenship is necessary
under the Transportation Code as in effect at such time or, if it is not
necessary under the Transportation Code as in effect at such time, if it is
informed in writing by the Lessee, the Indenture Trustee or the Owner
Participant that such lack of United States citizenship would have any adverse
effect on the Lessee, the Indenture Trustee, the Holders or the Owner
Participant. The Owner Trustee, in its individual capacity, further covenants
that if at any time it appears reasonably probable that it will cease to be a
Citizen of the United States based on information that is (i) known to a
Responsible Officer or (ii) generally known to the public, it will promptly so
notify, to the extent permitted by law, all parties to this Agreement.
(c) Owner Participant. The Owner Participant agrees, solely for the
benefit of the Lessee, the Pass Through Trustee, the Indenture Trustee and the
Owner Trustee, that if at any time on or after the Delivery Date when the
Aircraft is registered or the Lessee proposes to register the Aircraft in the
United States (i) either it shall cease to be, or an event which has been
publicly disclosed has occurred of which the Owner Participant has knowledge
and which will cause the Owner Participant to cease to be, a Citizen of the
United States and (ii) the Aircraft shall or would therefore become ineligible
for registration in the name of the Owner Trustee under the Transportation
Code and regulations then applicable thereunder, then the Owner Participant
shall give notice thereof to the Lessee, the Owner Trustee and the Indenture
Trustee and shall (at its own expense and without any reimbursement or
indemnification from the Lessee) immediately (and in any event within a period
of 20 days) (x) effect a voting trust or other similar arrangement, (y)
transfer in accordance with the terms of this Agreement and the Trust
Agreement all its rights, title and interest in and to such Trust Agreement,
the Lessor's Estate and this Agreement, or (z) take any other alternative
action that would prevent any deregistration, or maintain or permit the United
States registration, of the Aircraft. It is agreed that the Owner Participant
shall be liable to pay promptly on request (A) to each of the other parties
hereto any actual damages (but not consequential damages) suffered by any such
other party to the extent the same shall result from the representation and
warranty of the Owner Participant in the first sentence of Section 7.02(a)
hereof proving to be untrue as of the Delivery Date; and (B) to the Lessee,
the Indenture Trustee or the Pass Through Trustee for any damages actually
(but not consequentially) incurred by the Lessee, the Indenture Trustee and
the Pass Through Trustee as a result of the Owner Participant's failure to
comply with its obligations pursuant to the first sentence of this Section
7.02(c); provided, that, the foregoing shall not restrict the Pass Through
Trustee or the Indenture Trustee from asserting against the Owner Participant
any damages actually incurred by the holders of any Pass Through Certificates.
Each party hereto agrees, upon the request and at the sole expense of the
Owner Participant, to cooperate with the Owner Participant in complying with
its obligations under the provisions of the first sentence of this Section
7.02(c), but without any obligation on the part of such other party to take
any action believed by it in good faith to be unreasonably burdensome to such
party or materially adverse to its business interests.
Section 7.03. Representations, Warranties and Covenants of Owner
Participant. (a) Representations, Warranties and Covenants. In addition to
and without limiting its other representations and warranties provided for in
this Article 7, the Owner Participant represents and warrants on the date
hereof and as of the Certificate Closing Date and the Delivery Date that:
(i) it is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware and it has full
corporate power, authority and legal right to carry on its present business
and operations, to own or lease its Properties and to enter into and to
carry out the transactions contemplated by this Agreement, the Tax
Indemnity Agreement, the Trust Agreement and the other Operative Agreements
to which it is party;
(ii) the execution, delivery and performance by it of this
Agreement, the Tax Indemnity Agreement, and the Trust Agreement and the
other Operative Agreements to which it is party have been duly authorized
by all necessary corporate action on its part and, assuming the accuracy of
the Lessee's representations in Section 6.01(o) hereof, do not require any
governmental approvals that would be required to be obtained by the Owner
Participant;
(iii) based on the representations, warranties and covenants
contained in Sections 6.01(m)(viii), 6.02 and 7.09 hereof and compliance
with Section 10.06 of the Indenture, neither the execution, delivery or
performance by the Owner Participant of this Agreement, the Tax Indemnity
Agreement, and the Trust Agreement and the other Operative Agreements to
which it is party nor compliance with the terms and provisions hereof or
thereof, conflicts or will conflict with or results or will result in a
breach or violation of any of the terms, conditions or provisions of, or
will require any consent or approval under any law, governmental rule or
regulation applicable to the Owner Participant or the charter documents,
as amended, or bylaws, as amended, of the Owner Participant or any
order, writ, injunction or decree of any court or governmental authority
against the Owner Participant or by which it or any of its Properties is
bound or any indenture, mortgage or contract or other agreement or
instrument to which the Owner Participant is a party or by which it or
any of its Properties is bound, or constitutes or will constitute a
default thereunder or results or will result in the imposition of any
Lien upon any of its Properties;
(iv) this Agreement, the Tax Indemnity Agreement and the Trust
Agreement and the other Operative Agreements to which it is party have been
or on the Certificate Closing Date will be duly executed and delivered by
the Owner Participant and constitute or on the Certificate Closing Date
will constitute the legal, valid and binding obligation of the Owner
Participant enforceable against it in accordance with their terms except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws or equitable principles of general
application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(v) it is not in default under any mortgage, deed of trust,
indenture, lease or other instrument or agreement to which the Owner
Participant is a party or by which it or any of its Properties may be
bound, or in violation of any applicable law, which default or violation
would have a material adverse effect on the financial condition, business
or operations of the Owner Participant or an adverse effect on the ability
of the Owner Participant to perform its obligations under this Agreement
and the other Operative Agreements to which it is or is to be a party;
(vi) there are no pending or, to the knowledge of the Owner
Participant, threatened actions, suits, investigations or proceedings
against the Owner Participant before any court, administrative agency or
tribunal which are expected to materially adversely affect the ability of
the Owner Participant to perform its obligations under this Agreement and
the other Operative Agreements to which it is or is to be a party and the
Owner Participant knows of no pending or threatened actions or proceedings
before any court, administrative agency or tribunal involving it in
connection with the transactions contemplated by the Operative Agreements;
(vii) neither the execution and delivery by it of this Agreement or
the other Operative Agreements to which it is a party nor the performance
of its obligations hereunder or thereunder requires the consent or approval
of or the giving of notice to, the registration with, or the taking of any
other action in respect of, any governmental authority or agency that would
be required to be obtained or taken by the Owner Participant except for
filings contemplated by this Agreement;
(viii) no part of the funds to be used by it to acquire the interests
to be acquired by the Owner Participant under this Agreement constitutes
assets (within the meaning of ERISA and any applicable rules and
regulations) of any employee benefit plan subject to Title I of ERISA or of
any plan or individual retirement account subject to Section 4975 of the
Code; and
(ix) it is a "U.S. Person" as defined in Section 7701(a)(30) of the
Code and is not a tax resident of another country.
Notwithstanding the foregoing or anything else contained in this
Agreement, the Owner Participant makes no representation or warranty in this
Agreement with respect to laws, rules or regulations relating to aviation or
to the nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship, design,
patent or trademark infringement, operation, merchantability or fitness for
use of the Aircraft, other than such laws, rules or regulations relating to
the citizenship requirements of the Owner Participant under applicable
aviation law.
(b) Lessor's Liens. The Owner Participant further represents,
warrants and covenants that there are no Lessor's Liens attributable to it (or
an Affiliate thereof) and that there will not be any Lessor's Lien
attributable to it (or an Affiliate thereof) on the Certificate Closing Date.
The Owner Participant agrees with and for the benefit of the Lessee, the Owner
Trustee, the Indenture Trustee and the Pass Through Trustee that the Owner
Participant will, at its own cost and expense, take such action as may be
necessary (by bonding or otherwise, so long as neither the Lessee's operation
and use of the Aircraft nor the validity and priority of the Lien of the
Indenture is impaired) to duly discharge and satisfy in full, promptly after
the same first becomes known to the Owner Participant, any Lessor's Lien
attributable to the Owner Participant (or an Affiliate thereof), provided,
however, that the Owner Participant shall not be required to discharge or
satisfy such Lessor's Lien which is being contested by the Owner Participant
in good faith and by appropriate proceedings so long as such proceedings do
not involve any material danger of the sale, forfeiture or loss of the
Aircraft or the Lessor's Estate or the Trust Indenture Estate or any interest
in any thereof or otherwise materially adversely affect the validity or
priority of the Lien of the Indenture.
(c) Reimbursement. Without limiting any other rights the parties
hereto may have as a result of any breach by the Owner Participant of its
obligations in Section 7.03(b) hereof, the Owner Participant agrees to
reimburse each other party hereto for all reasonable legal fees and expenses
of counsel that may be incurred by any such party as a result of the failure
of the Owner Participant to discharge and satisfy any such Lessor's Lien in
accordance with the terms of Section 7.03(b) hereof.
(d) Assignment of Interests of Owner Participant. At any time after
the Delivery Date (or upon the direction of the Lessee if Section 3.05(a)(i)
hereof shall be applicable), and subject to the conditions set forth in this
Section 7.03(d), the Owner Participant may assign, convey or otherwise
transfer to a single institutional investor or an Affiliate of an
institutional investor all (but not less than all) of the Beneficial Interest,
provided that it gives the Lessee and the Indenture Trustee at least 10
Business Days' notice of such assignment, conveyance or other transfer and
provided further that the Owner Participant and any Owner Participant
Guarantor shall remain liable for all obligations of the Owner Participant
under the Trust Agreement and the Operative Agreements to which the Owner
Participant is a party to the extent (but only to the extent) relating to the
period on or before the date of such transfer and provided that the transferee
agrees by a written instrument substantially in the form attached hereto as
Exhibit G-1 to assume primary liability for all obligations as an Owner
Participant under the Trust Agreement and the other Operative Agreements to
which such Owner Participant is a party relating to the period after the date
of transfer. Any such transferee shall (a) be (i) a bank, savings
institution, finance company, leasing company or trust company, national
banking association acting for its own account or in a fiduciary capacity as
trustee or agent under any pension, retirement, profit sharing or similar
trust or fund, insurance company, fraternal benefit society or corporation
acting for its own account having a combined capital and surplus (or, if
applicable, consolidated tangible net worth or its equivalent) of not less
than $75,000,000, (ii) a subsidiary of any Person described in clause (i)
where such Person provides (A) support for the obligations assumed by such
transferee subsidiary reasonably satisfactory to the Lessee, the Owner Trustee
and the Indenture Trustee or (B) an unconditional guaranty substantially in
the form of Exhibit G-2 attached hereto of such transferee subsidiary's
obligations, or (iii) an Affiliate of the transferring Owner Participant, so
long as such Affiliate has a combined capital and surplus (or, if applicable,
consolidated tangible net worth or its equivalent) of not less than
$75,000,000, (b) be legally capable of binding itself to the obligations of
the Owner Participant and shall expressly agree to assume all obligations of
the Owner Participant under the Trust Agreement and this Agreement and (c)
provide representations substantially similar to those contained in Sections
7.02(a) and 7.03(a) hereof. In the event of any such assignment, conveyance
or transfer, the transferee shall become a party to the Trust Agreement and
shall agree to be bound by all the terms of and will undertake all of the
obligations of the Owner Participant contained in the Trust Agreement and the
other Operative Agreements in the manner set forth in the form attached as
Exhibit G-1. A transferee hereunder shall be (i) a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (or any successor provision thereto) and
such transferee shall be personally liable for any debt service to the extent
that its receipt of rentals is reduced by reason of any withholding Taxes that
result from such transferee's failure to be such a "U.S. Person" and (ii) a
Citizen of the United States or has established a voting trust, voting powers
or other arrangement reasonably satisfactory to the Indenture Trustee and the
Lessee to permit the Owner Trustee to be the registered owner of the Aircraft
under the Transportation Code. A transferee hereunder shall not be, and in
acquiring the Beneficial Interest shall not use the assets of, an employee
benefit plan subject to Title I of ERISA or an individual retirement account
or a plan subject to Section 4975 of the Code. Assuming the truth of the
representations made in Sections 6.01(m) and 7.06 hereof and compliance with
Section 10.06 of the Indenture, no such assignment, conveyance or transfer
shall violate any provision of law or regulation or create a relationship
which would be in violation thereof. The Owner Trustee shall not be on notice
of or otherwise bound by any such assignment, conveyance or transfer unless
and until it shall have received an executed counterpart of the instrument of
such assignment, conveyance or transfer. Upon any such disposition by the
Owner Participant to a transferee as above provided, the transferee shall be
deemed the "Owner Participant" or "Trustor" for all purposes of the Operative
Agreements, and shall be deemed to have made all the payments previously made
by its transferor and to have acquired the same interest in the Lessor's
Estate as theretofore held by its transferor; and each reference therein to
the "Owner Participant" or "Trustor" shall thereafter be deemed a reference
to such transferee. Notwithstanding anything to the contrary contained in
this Section 7.03(d), in no event shall the Owner Participant transfer its
interest in the Beneficial Interest to any entity whose business is that of
a nationwide or worldwide overnight or expedited delivery small package air
courier, cargo or freight deliverer or which competes with the Lessee in
such lines of business. The Lessee agrees that it will reasonably
cooperate with the Owner Participant in effecting an assignment of the
Owner Participant's interests including, without limitation, providing
letters to any successor Owner Participant permitting such successor Owner
Participant to rely on any opinions provided by the Lessee on the Delivery
Date.
(e) Actions with Respect to Lessor's Estate, Etc. The Owner
Participant agrees that it will not take any action to subject the Lessor's
Estate or the trust established by the Trust Agreement, as debtor, to the
reorganization or liquidation provisions of the Bankruptcy Code or any other
applicable bankruptcy or insolvency statute.
Section 7.04. Representations, Covenants and Warranties of SSB and
the Owner Trustee. (a) In addition to and without limiting its other
representations and warranties provided for in this Article 7, SSB represents
and warrants, in its individual capacity with respect to items (i), (ii),
(iii)(A), (iv), (v), (vi) and (vii) below, and as the Owner Trustee with
respect to items (iii)(B) and (iv) on the date hereof and as of the
Certificate Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
with its principal place of business and chief executive office (as such
terms are used in Article 9 of the Uniform Commercial Code) at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department
and has full corporate power and authority, in its individual capacity or
(assuming the Trust Agreement has been duly authorized, executed and
delivered by the Owner Participant) as the Owner Trustee, as the case may
be, to carry on its business as now conducted, and to execute, deliver and
perform this Agreement and the Operative Agreements to which it is or is to
be a party;
(ii) the execution, delivery and performance by SSB, either in its
individual capacity or as the Owner Trustee, as the case may be, of this
Agreement and the Operative Agreements to which it is or is to be party
have been duly authorized by all necessary corporate action on its part,
and do not contravene its articles of association or by-laws; each of this
Agreement and the other Operative Agreements to which it is or is to be a
party has been duly authorized, and has been duly executed and delivered
or, in the case of the Operative Agreements identified in Section 4.02(c)
hereof, will on the Delivery Date be duly executed and delivered by SSB,
either in its individual capacity or as the Owner Trustee, as the case may
be, and neither the execution and delivery thereof nor SSB's performance
of or compliance with any of the terms and provisions thereof will violate
any Federal or Connecticut law or regulation governing SSB's banking or
trust powers;
(iii) (A) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or is
to be party when duly executed and delivered will, to the extent each such
document is entered into by SSB in its individual capacity, constitute the
legal, valid and binding obligation of SSB in its individual capacity
enforceable against it in such capacity in accordance with its respective
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law), and the performance by SSB in its individual capacity of
any of its obligations thereunder does not contravene any lease, regulation
or contractual restriction binding on SSB in its individual capacity;
(B) assuming due authorization, execution and delivery by each
other party thereto, each of the Operative Agreements to which it is or
is to be party when duly executed and delivered will, to the extent each
such document is entered into by the Owner Trustee in its trust
capacity, constitute the legal, valid and binding obligation of the
Owner Trustee enforceable against it in such capacity in accordance with
its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights (regardless of whether enforceability
is considered in a proceeding in equity or at law), and the performance
by the Owner Trustee of any of its obligations thereunder does not
contravene any lease, regulation or contractual restriction binding on
the Owner Trustee;
(iv) there are no pending or, to its knowledge, threatened actions
or proceedings against SSB before any court or administrative agency
which would materially and adversely affect the ability of SSB, either
in its individual capacity or as the Owner Trustee, as the case may be,
to perform its obligations under the Operative Agreements to which it is
or is to be party;
(v) it shall give the Lessee, the Indenture Trustee and the Owner
Participant at least thirty (30) days' prior written notice in the event of
any change in its chief executive office or name;
(vi) neither the execution and delivery by it, either in its
individual capacity or as the Owner Trustee, as the case may be, of any of
the Operative Agreements to which it is or is to be a party, requires on
the part of SSB in its individual capacity or any of its Affiliates the
consent or approval of or the giving of notice to, the registration with,
or the taking of any other action in respect of, any Federal or Connecticut
governmental authority or agency governing its banking or trust powers; and
(vii) on the Certificate Closing Date, the proceeds arising from the
issuance and sale of the Certificates shall be free of Lessor's Liens
attributable to SSB in its individual capacity and on the Delivery Date the
Owner Trustee shall be holding whatever title to the Aircraft as was
conveyed to it by AVSA, the Aircraft shall be free of Lessor's Liens
attributable to SSB in its individual capacity and SSB in its individual
capacity is a Citizen of the United States.
(b) Lessor's Liens. SSB, in its individual capacity, further
represents, warrants and covenants that there are no Lessor's Liens
attributable to it in its individual capacity and that there will not be any
such Lessor's Liens on the Certificate Closing Date or the Delivery Date. The
Owner Trustee, in its trust capacity, and at the cost and expense of the
Lessee, covenants that it will in its trust capacity promptly, and in any
event within 30 days after the same shall first become known to it, take such
action as may be necessary to discharge duly any Lessor's Liens attributable
to it in its trust capacity. SSB, in its individual capacity, covenants and
agrees that it will at its own expense take such action as may be necessary to
duly discharge and satisfy in full, promptly, and in any event within 30 days
after the same shall first become known to it, any Lessor's Liens attributable
to it in its individual capacity which may arise at any time after the date of
this Agreement.
(c) Indemnity for Lessor's Liens. SSB, in its individual capacity,
agrees to indemnify and hold harmless the Lessee, the Indenture Trustee, the
Owner Participant and the Pass Through Trustee and the Owner Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Pass Through Trustee or the
Owner Trustee as a result of the failure of SSB to discharge and satisfy any
Lessor's Liens attributable to it in its individual capacity, as described in
Section 7.04(b) hereof.
(d) Securities Act. None of SSB, the Owner Trustee or any Person
authorized by either of them to act on its behalf has directly or indirectly
offered or sold or will directly or indirectly offer or sell any interest in
the Lessor's Estate, or in any similar security relating to the Lessor's
Estate, or in any security the offering of which for purposes of the
Securities Act of 1933, as amended, would be deemed to be part of the same
offering as the offering of the aforementioned securities to, or solicited any
offer to acquire any of the same from, any Person.
(e) Actions With Respect to Lessor's Estate, Etc. Neither SSB, in
its individual capacity, nor the Owner Trustee will take any action to subject
the Lessor's Estate or the trust established by the Trust Agreement, as
debtor, to the reorganization or liquidation provisions of the Bankruptcy Code
or any other applicable bankruptcy or insolvency statute.
Section 7.05. Representations, Warranties and Covenants of the
Indenture Trustee. (a) The Indenture Trustee in its individual capacity (other
than as the Pass Through Trustee) represents on the date hereof and as of the
Certificate Closing Date and the Delivery Date as follows:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Indenture, this Agreement and the other Operative Agreements to
which it is a party and to authenticate the Certificates to be delivered on
the Certificate Closing Date;
(ii) the Indenture and this Agreement and the other Operative
Agreements to which it is or is to be a party, and the authentication of
the Certificates to be delivered on the Certificate Closing Date, have been
duly authorized by all necessary corporate action on its part, and neither
the execution and delivery thereof nor its performance of any of the terms
and provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under, its articles of association or
by-laws;
(iii) each of the Indenture and this Agreement, and the other
Operative Agreements to which it is or is to be a party, has been duly
executed and delivered or, in the case of the Operative Agreements
identified in Section 4.02(c) hereof, will on the Delivery Date be executed
and delivered by it and, assuming that each such agreement is the legal,
valid and binding obligation of each other party thereto, is (or will be,
as the case may be), the legal, valid and binding obligation of the
Indenture Trustee, enforceable against the Indenture Trustee in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles of
general application to or affecting the enforcement of creditors' rights
(regardless of whether enforceability is considered in a proceeding in
equity or at law);
(iv) neither the execution and delivery by it of the Indenture and
this Agreement and the other Operative Agreements to which it is or is to
be a party, nor the performance by it of any of the transactions
contemplated hereby or thereby, requires the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any Federal or state governmental authority or agency
governing its banking and trust powers; and
(v) on the Certificate Closing Date, the Indenture Trustee holds
the Liquid Collateral on behalf of the Owner Trustee and on the Delivery
Date, the Indenture Trustee will hold the original counterparts of the
Lease and the Lease Supplement.
(b) Indenture Trustee's Liens. The Indenture Trustee, in its
individual capacity, further represents, warrants and covenants that there are
no Indenture Trustee's Liens attributable to it in its individual capacity and
that there will not be any Indenture Trustee's Liens on the Certificate
Closing Date or, as at and following the Delivery Date, the Aircraft. The
Indenture Trustee, in its individual capacity, covenants and agrees that it
will at its own expense take such action as may be necessary to duly discharge
and satisfy in full, promptly, and in any event within 30 days, after the same
shall first become known to it, any Indenture Trustee's Liens.
(c) Indemnity for Indenture Trustee's Liens. The Indenture Trustee,
in its individual capacity, agrees to indemnify and hold harmless the Lessee,
the Owner Participant, the Owner Trustee and the Pass Through Trustee from and
against any loss, cost, expense or damage which may be suffered by the Lessee,
the Indenture Trustee, the Owner Participant, the Owner Trustee or the Pass
Through Trustee as a result of the failure of the Indenture Trustee to
discharge and satisfy any Indenture Trustee's Liens attributable to it in its
individual capacity, as described in Section 7.05(b) hereof.
Section 7.06. Indenture Trustee's Notice of Default. The Indenture
Trustee agrees to give the Owner Participant notice of any Default or Event of
Default promptly upon a Responsible Officer of the Indenture Trustee having
actual knowledge thereof.
Section 7.07. Releases from Indenture. The Indenture Trustee
covenants and agrees, for the benefit of the Lessee and the Owner Participant,
to execute and deliver the instruments of release from the Lien of the
Indenture which it is required to execute and deliver in accordance with the
provisions of Article XIV of the Indenture, and the Owner Participant agrees,
for the benefit of the Lessee, to cause the Owner Trustee to request the
Indenture Trustee to execute and deliver such instruments of release upon
written notice from the Lessee to make such request.
Section 7.08. Covenant of Quiet Enjoyment. Each of the Owner
Participant, the Indenture Trustee, the Pass Through Trustee and the Owner
Trustee covenants and agrees as to itself only that, so long as no Event of
Default under the Lease has occurred and is continuing, neither the Owner
Participant (or the Owner Trustee, the Pass Through Trustee or the Indenture
Trustee, as the case may be) nor any Person lawfully claiming through the
Owner Participant (or the Owner Trustee, the Pass Through Trustee or the
Indenture Trustee, as the case may be) shall interfere with the Lessee's right
quietly to enjoy the Aircraft during the Term without hindrance or disturbance
by the Owner Participant (or the Owner Trustee, the Pass Through Trustee or
the Indenture Trustee, as the case may be).
Section 7.09. Pass Through Trustee's Representations and Warranties.
The Pass Through Trustee, in its individual capacity (except with respect to
clause (iii) below), represents and warrants as of the date hereof (except as
otherwise provided), as of the Pass Through Closing Date, the Certificate
Closing Date and the Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the power and authority to enter into and perform its obligations
under the Pass Through Agreement, the Series Supplements, the Intercreditor
Agreement and this Agreement and to execute and authenticate the Pass
Through Certificates to be delivered on the Pass Through Closing Date;
(ii) the execution, delivery and performance of this Agreement,
the Pass Through Agreement and the Series Supplements and the
performance of its obligations hereunder and thereunder (including the
execution and authentication of the Pass Through Certificates to be
delivered on the Pass Through Closing Date) have been fully authorized
by all necessary corporate action on its part, and, subject to (A) the
registration of the issuance and sale of the Pass Through Certificates
under the Securities Act, (B) compliance with any applicable state
securities laws and (C) the qualification of the Pass Through Agreement
under the Trust Indenture Act, neither the execution and delivery
thereof nor its performance of any of the terms and provisions thereof
will violate any Federal or Utah law or regulation relating to its
banking or trust powers or contravene or result in any breach of, or
constitute any default under its articles of association, or bylaws or
the provisions of any indenture, mortgage, contract or other agreement
to which it is a party or by which it or its properties may be bound or
affected; and
(iii) each of this Agreement and the Pass Through Agreement has
been, and as of the Pass Through Closing Date the Series Supplements
will be, duly executed and delivered by it (in its individual and trust
capacities) and, assuming that each such agreement is the legal, valid
and binding obligation of each other party thereto, is or will be, as
the case may be, the legal, valid and binding obligation of the Pass
Through Trustee (in its individual and trust capacities), enforceable in
accordance with its respective terms except as limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the
enforcement of creditors' rights generally (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 7.10. Survival of Representations, Warranties and Covenants.
The representations, warranties and covenants of the Owner Participant, the
Owner Trustee (in its individual or trust capacity), the Pass Through Trustee
(in its individual or trust capacity), the Indenture Trustee (in its
individual or trust capacity) and the Subordination Agent (in its individual
or trust capacity) provided for in this Article 7, and their respective
obligations under any and all of them, shall survive the Closings, the
delivery of the Aircraft and the expiration or other termination of this
Agreement, and the other Operative Agreements.
Section 7.11. Lessee's Assumption of the Certificates. (a) Subject
to compliance by the Lessee with all of its obligations under the Operative
Agreements, each of the Owner Participant, the Owner Trustee, the Indenture
Trustee, the Pass Through Trustee and the Lessee covenants and agrees that if
the Lessee elects to terminate the Lease and to purchase the Aircraft pursuant
to Section 4.02(a)(A), (D) or (E) of the Lease, and so long as no Event of
Default shall have occurred and be continuing then, upon compliance with the
applicable provisions of said Section 4.02(a) of the Lease, the Owner Trustee
will transfer to the Lessee, without recourse or warranty (except as to the
absence of Lessor's Liens attributable to the Owner Trustee) but subject to
the Lien of the Indenture, all of the Owner Trustee's right, title and
interest in and to the Aircraft, and if the Lessee, in connection with such
purchase, elects pursuant to Section 4.02(a)(A), (D) or (E) of the Lease to
assume the obligations of the Owner Trustee to the Indenture Trustee and the
Holders under the Indenture, the Certificates and hereunder, then the Lessee
shall so notify the Indenture Trustee (such notice to be given at least 30 and
not more than 60 days prior to the effective date of such assumption), and
each of the parties shall execute and deliver appropriate documentation
permitting the Lessee to assume such obligations on the basis of full recourse
to the Lessee, maintaining for the benefit of the Holders the security
interest in the Aircraft created by the Indenture, and upon compliance with
the provisions of this Section 7.11 releasing the Owner Participant and the
Owner Trustee from all obligations in respect of the Certificates, the
Indenture, this Agreement and the other Operative Agreements, except any
obligations relating to the period prior to such assumption and take all
such other actions, at the Lessee's expense, as are reasonably necessary to
permit such assumption by the Lessee.
(b) In connection with such assumption:
(i) the Lessee shall execute and deliver an instrument satisfactory
in form and substance to the Indenture Trustee (A) pursuant to which the
Lessee irrevocably and unconditionally assumes and undertakes, with full
recourse to the Lessee, to pay, satisfy and discharge when and as due (at
the stated maturity thereof, by acceleration or otherwise) the principal
of, Make-Whole Premium, if any, interest and all other sums owing on all
Outstanding Certificates (or on the Lessee's substituted obligations) in
accordance with their terms and to punctually perform and observe all of
the covenants and obligations hereunder and under the Indenture and the
Certificates (as the same may be amended in connection with such
assumption) to be performed or observed by the Owner Trustee and (B) which
contains amendments to the Indenture, in form and substance satisfactory to
the Holders and the Indenture Trustee, that incorporate therein such
provisions from the Lease and this Agreement as may be appropriate,
including, without limitation, events of default substantially identical in
scope and effect to those set forth in the Lease and covenants
substantially identical to the covenants of the Lessee hereunder and under
the Lease;
(ii) the instrument referred to in paragraph (i) of this Section
7.11(b), any Uniform Commercial Code financing statements relating thereto,
and any other documents which shall be necessary (or reasonably requested
by the Indenture Trustee) to establish the Lessee's title to and interest
in the Aircraft or to reflect the substitution of the Lessee for the Owner
Trustee under the Operative Agreements or to continue the perfection of the
security interests in the Aircraft and the other rights, Property and
interests included in the Trust Indenture Estate for the benefit of the
Holders (or the Lessee's substituted obligations) shall be filed in such
form, manner and places as are necessary or, in the reasonable opinion of
the Indenture Trustee, advisable for such purpose;
(iii) the Indenture Trustee shall have received an insurance report
dated the effective date of such assumption of an independent insurance
broker and certificates of insurance, each in form and substance
satisfactory to the Indenture Trustee, as to the due compliance as of the
effective date of such assumption with the terms of Article 13 of the Lease
(as it relates to the Indenture Trustee) relating to the insurance with
respect to the Aircraft;
(iv) the Indenture Trustee shall have received evidence that as of
the effectiveness of the assignment on the date of such assumption the
Aircraft is free and clear of all Liens other than the Lien of the
Indenture and other Permitted Liens;
(v) the Indenture Trustee shall have received a certificate from
the Lessee that no Event of Default shall have occurred and be continuing
as of the effective date of such assumption; and
(vi) the Indenture Trustee shall have received (A) from counsel for
the Lessee (who may be the Lessee's General Counsel) a legal opinion, in
form and substance satisfactory to the Indenture Trustee (w) with respect
to the compliance of the assumption contemplated hereby with the terms,
provisions and conditions hereof, (x) with respect to the due
authorization, execution, delivery, validity and enforceability of the
instrument referred to in paragraph (i) of this Section 7.11(b), (y)
with respect to the continued perfection of the first and prior Lien and
security interest in the Aircraft for the benefit of the Holders of the
Certificates (or the Lessee's substituted obligations) referred to in
paragraph (ii) of this Section 7.11(b) and (z) with respect to the
continued availability of the benefits of Section 1110 of the Bankruptcy
Code to the Indenture Trustee for the benefit of the Holders with
respect to the Aircraft after giving effect to such assumption, (B) from
counsel to the Indenture Trustee and Special Aviation Counsel, a legal
opinion comparable to the respective opinions delivered on the
Certificate Closing Date or the Delivery Date, as the case may be, with
such changes therein as may be appropriate in light of such assumption,
and (C) in the case of each opinion described in clause (A) or (B)
above, covering such additional matters as the Indenture Trustee shall
reasonably request.
(c) The Lessee shall pay all reasonable expenses (including
reasonable fees and expenses of counsel) of the Indenture Trustee, the Owner
Trustee, the Pass Through Trustee and the Owner Participant in connection with
such assumption.
Section 7.12. Indebtedness of Owner Trustee. So long as the
Indenture is in effect, the Owner Trustee, not in its individual capacity, but
solely as trustee under the Trust Agreement, shall not incur any indebtedness
for borrowed money except as expressly contemplated herein or in any other
Operative Agreement (excluding the Tax Indemnity Agreement) and shall not
engage in any business or other activity other than the transactions
contemplated herein or in any other Operative Agreement (excluding the Tax
Indemnity Agreement) and all necessary or appropriate activity related
thereto.
Section 7.13. Compliance with Trust Agreement, Etc. Each of the
Owner Participant, SSB and the Owner Trustee agrees with the Lessee, the
Indenture Trustee and the Pass Through Trustee that so long as the Lien of the
Indenture shall be in effect it will (i) comply with all of the terms of the
Trust Agreement applicable to it in its respective capacity, the noncompliance
with which would materially adversely affect any such party and (ii) not take
any action, or cause any action to be taken, to amend, modify or supplement
any other provision of the Trust Agreement in a manner that would materially
adversely affect any such party without the prior written consent of such
party. The Owner Trustee confirms for the benefit of the Lessee, the
Indenture Trustee and the Pass Through Trustee that it will comply with the
provisions of Article 2 of the Trust Agreement. Notwithstanding anything else
to the contrary in the Trust Agreement, so long as the Lease remains in
effect, the Owner Participant agrees not to terminate or revoke the trust
created by the Trust Agreement without the consent of the Lessee. If and so
long as the Indenture shall not have been discharged the consent of the
Indenture Trustee shall also be required prior to any termination or
revocation of such trust and in addition, the Owner Participant will, at the
Lessee's expense, promptly and duly execute and deliver to the Indenture
Trustee such documents and assurances including, without limitation,
conveyances, financing statements and continuation statements with respect to
financing statements and take such further action as the Indenture Trustee may
from time to time reasonably request and furnish in order to protect the
rights and remedies created or intended to be created in favor of the
Indenture Trustee under the Indenture and to create for the benefit of the
Certificate Holders a valid first priority Lien with respect to, and a first
and prior perfected security interest in, the Trust Indenture Estate.
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants. (a) Representations and Warranties. The Subordination Agent
represents and warrants as of the date hereof (except as otherwise provided),
as of the Pass Through Closing Date, the Certificate Closing Date and the
Delivery Date that:
(i) it is a national banking association duly organized and validly
existing in good standing under the laws of the United States of America
and has the corporate power and authority to enter into and perform its
obligations under this Agreement, the Liquidity Facilities and the
Intercreditor Agreement;
(ii) the execution, delivery and performance of this Agreement, each
of the Liquidity Facilities and the Intercreditor Agreement and the
performance of its obligations hereunder and thereunder have been fully
authorized by all necessary corporate action on its part, and, neither the
execution and delivery thereof nor its performance of any of the terms and
provisions thereof will violate any Federal or Utah law or regulation
relating to its banking or trust powers or contravene or result in any
breach of, or constitute any default under its articles of association, or
bylaws or the provisions of any indenture, mortgage, contract or other
agreement to which it is a party or by which it or its properties may be
bound or affected;
(iii) each of this Agreement, the Liquidity Facilities and the
Intercreditor Agreement has been duly executed and delivered by it and,
assuming that each such agreement is the legal, valid and binding
obligation of each other party thereto, is or will be, as the case may be,
the legal, valid and binding obligation of the Subordination Agent,
enforceable in accordance with its respective terms except as limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws or
equitable principles of general application to or affecting the enforcement
of creditors' rights generally (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(iv) there are no Taxes payable by the Subordination Agent imposed
by the State of Utah or any political subdivision or taxing authority
thereof in connection with the execution, delivery and performance by
the Subordination Agent of this Agreement, any of the Liquidity
Facilities or the Intercreditor Agreement (other than franchise or other
taxes based on or measured by any fees or compensation received by the
Subordination Agent for services rendered in connection with the
transactions contemplated by the Intercreditor Agreement or any of the
Liquidity Facilities), and there are no Taxes payable by the
Subordination Agent imposed by the State of Utah or any political
subdivision thereof in connection with the acquisition, possession or
ownership by the Subordination Agent of any of the Certificates other
than franchise or other taxes based on or measured by any fees or
compensation received by the Subordination Agent for services rendered
in connection with the transactions contemplated by the Intercreditor
Agreement or any of the Liquidity Facilities);
(v) there are no pending or threatened actions or proceedings
against the Subordination Agent before any court or administrative agency
which individually or in the aggregate, if determined adversely to it,
would materially adversely affect the ability of the Subordination Agent to
perform its obligations under this Agreement, the Intercreditor Agreement
or any Liquidity Facility;
(vi) the Subordination Agent has not directly or indirectly offered
any Certificate for sale to any Person or solicited any offer to acquire
any Certificates from any Person, nor has the Subordination Agent
authorized anyone to act on its behalf to offer directly or indirectly any
Certificate for sale to any Person, or to solicit any offer to acquire any
Certificate from any Person; and the Subordination Agent is not in default
under any Liquidity Facility; and
(vii) the Subordination Agent is not directly or indirectly
controlling, controlled by or under common control with the Owner
Participant, the Owner Trustee, any Underwriter or the Lessee.
(b) Covenants. (i) The Subordination Agent agrees not to amend any
Liquidity Facility without the consent of the Lessee (so long as no Event of
Default shall have occurred and be continuing) and of the Owner Participant
(such consents not to be unreasonably withheld).
(ii) In connection with the deposit in the applicable Cash
Account of amounts drawn pursuant to any Downgrade Drawing under a
Liquidity Facility, the Subordination Agent agrees, so long as no Event of
Default shall have occurred and be continuing, to pay to the Lessee
promptly following each Regular Distribution Date any Investment Earnings
on the amount so deposited which remain after application of such
Investment Earnings pursuant to Section 2.06 of such Liquidity Facility to
the interest payable on such Downgrade Drawing under Section 3.07 of such
Liquidity Facility. Capitalized terms used in this Section shall have the
meanings specified in the Intercreditor Agreement.
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes. (a) Generally. The
Lessee agrees promptly to pay when due, and to indemnify and hold each
Indemnitee harmless from all license, recording, documentary, registration and
other fees and all taxes (including, without limitation, income, gross
receipts, sales, rental, use, value added, property (tangible and intangible),
ad valorem, excise and stamp taxes), fees, levies, imposts, recording duties,
duties, charges, assessments or withholdings of any nature whatsoever,
together with any assessments, penalties, fines, additions to tax or interest
thereon (individually, a "Tax," and collectively called "Taxes"), however
imposed or asserted (whether imposed upon any Indemnitee, the Lessee, all or
any part of the Aircraft, Airframe, any Engine or any Part or the Lessor's
Estate, the Trust Indenture Estate, Rent, the Certificates or otherwise upon
or with respect to any Operative Agreement, any payments thereunder or
otherwise in connection therewith), by any Federal, state or local government
or taxing authority in the United States, or by any government or taxing
authority of a foreign country or of any political subdivision or taxing
authority thereof or by a territory or possession of the United States or an
international taxing authority relating to or measured by:
(i) the construction, mortgaging, financing, refinancing, purchase,
acceptance, rejection, delivery, nondelivery, transport, location, ownership,
registration, reregistration, deregistration, insuring, assembly, possession,
repossession, operation, use, non-use, condition, maintenance, repair,
improvement, conversion, sale, return, abandonment, preparation, installation,
storage, redelivery, replacement, manufacture, leasing, subleasing,
sub-subleasing, modification, alteration, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application or
disposition of, or the imposition of any Lien (or the incurrence of any
liability to refund or pay over any amount as a result of any Lien) on, the
Aircraft, the Airframe, any Engine or any Part or any interest therein;
(ii) amounts payable under the Operative Agreements;
(iii) the Property, or the income or other proceeds received with
respect to the Property attributable to the transactions contemplated by
the Operative Agreements, held by the Owner Trustee under the Trust
Agreement or after an Event of Default under the Lease, or by the Indenture
Trustee under the Indenture;
(iv) otherwise with respect to any Operative Agreement, any
interest therein or by reason of the transactions described in or
contemplated by the Operative Agreements;
(v) the principal or interest or other amounts payable with respect
to the Certificates;
(vi) the Pass Through Certificates or the Certificates or the
issuance, sale, acquisition, reoptimization, or refinancing thereof or the
beneficial interests in the Trust Estate or the Trust Indenture Estate or
the creation thereof under the Trust Agreement or the Indenture, or the
security interest created or perfected thereby or by any filing thereof;
(vii) any assumption by the Lessee pursuant to Section 7.11 of this
Agreement and Section 2.12 of the Indenture;
(viii) the Aircraft, the Airframe, any Engine or any Part; or
(ix) the rentals (including Basic Rent, Renewal Rent and
Supplemental Rent), receipts or earnings arising from the Operative
Agreements.
(b) Exceptions. The indemnity provided for in Section 8.01(a) shall
not extend to any of the following:
(i) With respect to an Indemnitee, Taxes based upon, measured by or
with respect to the net or gross income, items of tax preference or minimum
tax or excess profits, receipts, value-added taxes, capital, franchise, net
worth (whether denominated income, excise, capital stock, or doing
business taxes) or other similarly-based taxes (other than sales, use,
transfer, rental, ad valorem, stamp, property, or similar taxes) ("Income
Taxes"), provided, however, that this clause (i) shall not exclude from the
indemnity described in Section 8.01(a) above any such Income Taxes to the
extent such taxes are imposed by any jurisdiction in which the Indemnitee
would not be subject to such taxes but for, or would be subject to such
taxes solely as a result of, (x) the operation, registration, location,
presence, or use of the Aircraft, Airframe, any Engine or any Part thereof,
in such jurisdiction or (y) the place of incorporation or principal office
or the activities of the Lessee or any sublessee in such jurisdiction (it
being understood that (A) any such indemnity would be payable only to the
extent of the net harm incurred by the Indemnitee from such Income Taxes,
taking into account any incremental current Tax benefit in another tax
jurisdiction resulting from payment of such Income Taxes and (B) this
sentence would require indemnification in a jurisdiction in which the
Indemnitee is already subject to an Income Tax (an "Existing Income Tax")
only if an event set forth in Clause (x) or (y) of this sentence causes the
Indemnitee to be subject to an Income Tax in that jurisdiction (a "New
Income Tax") other than an Existing Income Tax, and such New Income Tax
would have been imposed even if the activities contemplated by the
Operative Agreements were the Indemnitee's sole nexus to the jurisdiction);
provided, further, that the provisions of this paragraph (b)(i) relating to
Income Taxes shall not exclude from the indemnity described in Section
8.01(a) hereof any Income Taxes for which the Lessee would be required to
indemnify an Indemnitee (x) so that any payment under the Operative
Agreements, otherwise required to be made on an After-Tax Basis, is made on
an After-Tax Basis or (y) pursuant to the last sentence of Section 8.02,
8.05, 9.02 or 9.05 of this Agreement;
(ii) [Reserved];
(iii) Taxes imposed with respect to the Aircraft and arising out
of or measured by acts, omissions, events or periods (or any combination
of the foregoing) which occur after the later of (A) the payment in full
of all amounts payable by the Lessee pursuant to and in accordance with
the Operative Agreements, or the earlier discharge in full of the
Lessee's payment obligations under and in accordance with the Lease and
the Operative Agreements, and (B) the earliest of (x) the expiration of
the Term of the Lease and return of the Aircraft in accordance with
Article 12 of the Lease, (y) the termination of the Lease in accordance
with the applicable provisions of the Lease and return of the Aircraft
in accordance with the Lease, or (z) the termination of the Lease in
accordance with the applicable provisions of the Lease and the transfer
of all right, title and interest in the Aircraft to the Lessee pursuant
to its exercise of any of its purchase options set forth in Section
4.02(a) of the Lease, provided that this exclusion (iii) shall not apply
in respect of any payment made after the dates set forth in clauses (A)
and (B) above unless such payment is made with respect to any event or
circumstance occurring on, with or prior to such return or transfer or
period prior to such return or transfer, or Taxes incurred in connection
with the exercise of any remedies pursuant to Article 17 of the Lease
following the occurrence of an Event of Default;
(iv) As to the Owner Trustee, Taxes imposed against the Owner
Trustee upon or with respect to any fees for services rendered in its
capacity as Owner Trustee under the Trust Agreement or, as to the
Indenture Trustee, Taxes imposed against the Indenture Trustee upon or
with respect to any fees received by it for services rendered in its
capacity as Indenture Trustee under the Indenture;
(v) Taxes imposed on an Indemnitee that would not have been imposed
but for the willful misconduct or gross negligence of such Indemnitee
(other than gross negligence or willful misconduct not actually committed
by but instead imputed to such Indemnitee by reason of such Indemnitee's
participation in the transactions contemplated by the Operative Agreements)
or the breach by such Indemnitee of: (i) in the case of an Indemnitee other
than the Owner Participant, any representation, warranty or covenant
contained in the Operative Agreements or any document delivered in
connection therewith and (ii) in the case of the Owner Participant, the
representations or covenants in Sections 7.02(a), (c); 7.03(a)(i), (ii),
(iii), (iv), (vii), (ix); and 7.03(b), (c), (d), (e) of this Agreement (in
either case unless attributable to a breach of representation, warranty or
covenant of the Lessee);
(vi) Taxes imposed on, and not collected by withholding from
payments of Rent, the Owner Trustee or the Owner Participant or any
successor, assign or Affiliate thereof which became payable by reason of
any voluntary or involuntary transfer or disposition by such Indemnitee
subsequent to the Delivery Date, including revocation of the Trust, of any
interest in some or all of the Aircraft, Airframe, Engines or Parts thereof
or its interest in the Lessor's Estate (not including any transfers of any
Certificates pursuant to Section 15.01(a) hereof) or a disposition in
connection with a bankruptcy or similar proceedings involving either the
Lessor or the Owner Participant other than (A) transfers resulting from a
loss, substitution or modification of the Aircraft, Engines or any Part,
(B) any transfer of the Aircraft, Engines or any Part (in each case other
than at Fair Market Value) to the Lessee or other person in possession
thereof, (C) transfers attributable to an Event of Default or (D) a
transfer pursuant to the Lessee's exercise of its rights under Section
10.01 of the Lease; the parties agree to cooperate to minimize any such
Taxes covered by this provision;
(vii) Taxes imposed on the Owner Participant for which the Lessee is
obligated to indemnify the Owner Participant pursuant to the Tax Indemnity
Agreement;
(viii) Taxes imposed on a successor, assign or other transferee
of the Owner Participant or the Owner Trustee that is not a U.S. Person
or an Indemnitee as of the date hereof under the Operative Agreements
(including, without limitation, a transferee which is a new lending
office of an original Indemnitee) which on the Certificate Closing Date
is an Indemnitee (for purposes of this clause (viii), an "original
Indemnitee") or such original Indemnitee to the extent that such Taxes
exceed the amount of Taxes that would have been imposed and would have
been indemnifiable pursuant to Section 8.01(a) hereof had there not been
a succession, assignment or other transfer by such original Indemnitee
of any such interest of such Indemnitee in the Aircraft or any Part, any
interest in or under any Operative Agreement, or any proceeds thereunder
(it being understood that for purposes of determining the amount of
indemnification that would have been due to such original Indemnitee
with respect to a net income Tax, it shall be assumed that such original
Indemnitee would be subject to taxation on its income at the highest
marginal statutory rate applicable to it), provided, however, that the
exclusion provided by this clause (viii) shall not apply in the case of
a succession, transfer or disposition (A) that occurs after the Lease
has been declared in default or if such transfer or disposition is
pursuant to the exercise of remedies under Article 17 of the Lease, (B)
which is an actual or deemed transfer pursuant to Section 7.11 hereof or
as a consequence of a Refinancing under Section 15.01 hereof, or any
actual or deemed transfer of a Certificate that as part of a Refinancing
under Section 15.01 hereof is not retired, but only to the extent the
Taxes attributable to such transfer exceed the amount of Taxes that
would have been imposed on such transferor if the debt had instead been
retired, (C) to the extent necessary to make payments with respect to
such Taxes on an After-Tax Basis, (D) to the extent such Taxes are
directly attributable to the failure of the Lessee to take
administrative actions as have been reasonably requested of it in
writing in a timely manner and which will result in no after-tax cost or
expense to the Lessee or (E) in the case of the Owner Participant or the
Lessor, to any Tax other than an Income Tax;
(ix) [Reserved];
(x) Any Taxes which have been included in the Purchase Price and
which have been paid to the applicable taxing authorities;
(xi) Any Taxes which would not have been imposed but for a Lessor's
Lien or an Indenture Trustee's Lien; and
(xii) Any Taxes imposed on the Owner Participant arising under or in
connection with any prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975(c)(1) of the Code ("Prohibited Transaction");
provided, however, that in the event any prohibited transaction arises
which is not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually or
collectively, a "PTE") then the indemnity provided for herein shall extend
to any Taxes incurred by the Owner Participant (or any Affiliate thereof)
as the result of any Prohibited Transaction arising out of the purchase or
holding of any Loan Certificates by an employee benefit plan subject to
Title I of ERISA or by a plan subject to Section 4975 of the Code
(individually or collectively, an "ERISA Plan") with respect to which the
Owner Participant is a party in interest, within the meaning of Section
3(14) of ERISA, or a disqualified person,within the meaning of Section 4975
of the Code, except, however, that such Indemnity shall not extend to any
Taxes incurred by the Owner Participant (or any Affiliate thereof) as the
result of any Prohibited Transaction occurring with respect to the purchase
or holding of any Loan Certificates (A) over which purchase or holding the
Owner Participant (or an Affiliate thereof) has discretion or control
(other than in the capacity of a custodian, directed trustee or other
similar nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan sponsor"
within the meaning of Section 3(16)(B) of ERISA.
(c) Withholding. The Pass Through Trustee shall withhold any Taxes
required to be withheld on payments to any holder of a Pass Through
Certificate who is a Non-U.S. Person except to the extent that such a holder
of a Pass Through Certificate has furnished evidence to the Pass Through
Trustee sufficient under applicable law to entitle such holder of a Pass
Through Certificate to any exemption from or reduction in the rate of
withholding on interest claimed by such holder of a Pass Through Certificate.
The Indenture Trustee shall withhold any Taxes required to be withheld on any
payment to a Holder pursuant to Section 5.09 of the Indenture. If the
Indenture Trustee or the Pass Through Trustee fails to withhold a Tax required
to be withheld with respect to any Holder of a Certificate or any holder of a
Pass Through Certificate or any claim is otherwise asserted by a taxing
authority against the Owner Trustee or Owner Participant for any withholding
tax, the Lessee will indemnify the Owner Trustee and the Owner Participant
(without regard to the exclusions set forth in Section 8.01(b) hereof) on an
After-Tax Basis against any such Taxes required to be withheld and any
interest and penalties with respect thereto, along with any other costs
(including reasonable attorney's fees) incurred in connection with any such
claim. The Indenture Trustee or the Pass Through Trustee, as the case may be,
in its individual capacity (and without recourse to the Trust Indenture
Estate), shall indemnify the Lessee (without regard to the exclusions set
forth in Section 8.01(b) hereof) on an After-Tax Basis for any payment the
Lessee shall have made pursuant to the preceding sentence.
Section 8.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Tax indemnified against under Section 8.01
shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Tax not
been incurred, provided that the calculation of any additional amounts owing
to any Indemnitee as a result of the Lessee's obligation to indemnify on an
After-Tax Basis shall be made without regard to the exclusions set forth in
Section 8.01(b). If any Indemnitee actually realizes a tax benefit by
reason of the payment of any Tax paid or indemnified against by the Lessee,
such Indemnitee shall promptly pay to the Lessee, to the extent such tax
benefit was not previously taken into account in computing such payment,
but not before the Lessee shall have made all payments then due to such
Indemnitee under this Agreement, the Tax Indemnity Agreement and any other
Operative Agreement, an amount equal to the lesser of (x) the sum of such
tax benefit plus any other tax benefit actually realized by such Indemnitee
that would not have been realized but for any payment made by such
Indemnitee pursuant to this sentence and not already paid to the Lessee,
and (y) the amount of the payment made under Section 8.01 hereof and this
Section 8.02 by the Lessee to such Indemnitee plus the amount of any other
payments by the Lessee to such Indemnitee theretofore required to be made
under this Section 8.02 and Sections 8.01 and 8.05 hereof (and the excess,
if any, of the amount described in clause (x) above over the amount
described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments
to such Indemnitee pursuant to Section 8.01 hereof); provided, however,
that notwithstanding the foregoing portions of this sentence, such
Indemnitee shall not be obligated to make any payment to the Lessee
pursuant to this sentence as long as an Event of Default shall have
occurred and be continuing under the Lease. The Lessee shall reimburse on
an After-Tax Basis such Indemnitee (and without regard to Section 8.01(b)
hereof, except for clause (v) thereof) for any payment of a tax benefit
pursuant to the preceding sentence (or a tax benefit otherwise taken into
account in calculating the Lessee's indemnity obligation hereunder) to the
extent that such tax benefit is subsequently disallowed or reduced
(including the expiration of any tax credit carryovers or carrybacks of
such Indemnitee that would not otherwise have expired).
Section 8.03. Time of Payment. Any amount payable to an Indemnitee
pursuant to this Article 8 shall be paid promptly, but in any event within 30
days after receipt of a written demand therefor from such Indemnitee
accompanied by a written statement describing in reasonable detail the basis
for such indemnity and the computation of the amount so payable, provided that
in the case of amounts which are being contested by the Lessee in good faith
or by the Indemnitee in either case pursuant to Section 8.04 hereof, such
amount shall be payable within 30 days after the time such contest is finally
resolved.
Section 8.04. Contests. If a written claim is made against any
Indemnitee for Taxes with respect to which the Lessee is liable for a payment
or indemnity hereunder, such Indemnitee shall promptly (but in any event
within 30 days of receipt thereof) give the Lessee notice in writing of such
claim and shall furnish the Lessee with copies of any written requests for
information sent to such Indemnitee (and not the Lessee) from any taxing
authority to the extent relating to such Taxes with respect to which the
Lessee may be required to indemnify hereunder and with respect to which it
would be necessary or beneficial to have information provided by the Lessee;
provided, however, that the failure of an Indemnitee to give such notice or
furnish such copy shall not terminate any of the rights of such Indemnitee
under this Article 8, except to the extent that the Lessee's contest rights
have been materially and adversely impaired by the failure to provide such
notice or copy. The Lessee may, at its option, contest in its own name or, if
required by law, require the Indemnitee to contest in good faith, with due
diligence and at the Lessee's expense, if timely requested in writing by the
Lessee, the validity, applicability or amount of such Taxes by:
(i) resisting payment thereof if lawful and practicable or not
paying the same except under protest if protest is necessary and proper in
each case so long as non-payment will not result in a material risk of the
sale, forfeiture or loss of, or the creation of a Lien other than a
Lessor's Lien on the Aircraft, Airframe or any Engine or any risk of
criminal liability; or
(ii) if the payment be made, using reasonable efforts to obtain a
refund thereof in appropriate administrative and judicial proceedings.
Notwithstanding the foregoing, the Lessee shall not be permitted or entitled
to contest any such Tax in its own name unless the Tax is reflected in a
report or a return of the Lessee or raised in an audit or other proceeding of
the Lessee and the Lessee is allowed to directly contest such Tax under
applicable law of the taxing jurisdiction provided, that if the Lessee is so
permitted under applicable law to contest a Tax asserted against the Lessee
and the same or similar Tax is also asserted against the Indemnitee, each of
the Lessee and such Indemnitee shall conduct its contest in its own name and
the Lessee and such Indemnitee will cooperate in a reasonable manner with
respect to the respective contests of such Tax.
If the Indemnitee, after reasonable discussion with the Lessee and
consideration in good faith of any suggestion made by the Lessee as to the
method of pursuing such contest, elects to conduct the contest, such
Indemnitee shall control the contest and shall determine the manner in which
to contest such Taxes and shall periodically or upon the Lessee's request
advise the Lessee of the progress of such contest; provided, however, that the
Lessee shall have the right to be consulted in good faith with respect to any
contest of claims subject to indemnification hereunder, including governmental
and judicial conferences and the right to be consulted in good faith regarding
the relevant portions of all related submissions to any governmental or other
authority, provided, however, that the Lessee shall be permitted to
participate in any such contest only (x) with respect to issues that can be
separated on audit from any Taxes for which the Lessee is not required to
indemnify the Indemnitee hereunder, and (y) if the Indemnitee shall have
determined that in its judgment, exercised in its sole discretion, neither
such participation nor the separation of issues will adversely affect the
Indemnitee. The Indemnitee will not settle a contest that results in a final
determination without consent of the Lessee, unless the Indemnitee waives its
right to indemnification with respect to such contest and any related contest.
Notwithstanding the preceding sentences of this Section 8.04, such Indemnitee
shall not be required to take or continue any action unless the Lessee shall
have (i) agreed in writing to pay and shall pay the Indemnitee on a current
basis and on an After-Tax Basis the after-tax cost of all reasonable fees and
expenses (including reasonable attorneys' fees and accountants' fees) which
such Indemnitee may incur as a result of contesting such Taxes, (ii) made all
payments and indemnities (other than contested payments and indemnities) then
due to the Indemnitee hereunder or with respect to any of the transactions
contemplated by or under the Operative Agreements and (iii) acknowledged in
writing the Lessee's obligation to such Indemnitee pursuant to this Agreement
to the extent that the contest is not successful, unless it is reasonably
clear from the resolution of the contest that an exclusion set forth in
Section 8.01(b) hereof applies. In no event shall such Indemnitee be required
or the Lessee be permitted to contest pursuant to this Section 8.04 the
imposition of any Tax for which the Lessee is obligated to indemnify any
Indemnitee hereunder unless (i) such Indemnitee shall have received, at the
Lessee's expense, an opinion of its tax counsel, such counsel to be reasonably
satisfactory to the Lessee ("Tax Counsel"), to the effect that there exists a
reasonable basis for contesting such claim, (ii) such Indemnitee (and, if such
Indemnitee is not the Owner Participant, the Owner Participant and such
Indemnitee) shall have determined that such contest will not result in any
material risk of loss, sale or forfeiture of, or the creation of a Lien (other
than Lessor's Liens) on, the Aircraft or any part thereof or interest thereon
or in a risk of criminal liability, or adversely affect the Trust Indenture
Estate, (iii) if a Payment Default, Bankruptcy Default or an Event of Default
shall have occurred and be continuing, the Lessee shall have provided security
for its obligations hereunder reasonably satisfactory to the Indemnitee, (iv)
if such contest shall be conducted in a manner requiring payment of the claim
in advance, the Lessee shall have advanced sufficient funds, on an interest
free basis, to make the payment required, and agreed to indemnify the
Indemnitee against any additional net adverse tax consequences on an After-Tax
Basis to such Indemnitee of such advance, (v) the issue shall not be the same
as an issue previously contested hereunder and decided adversely, unless the
Indemnitee shall have received at the Lessee's sole expense, a written
opinion, in form and substance reasonably satisfactory to such Indemnitee, of
Tax Counsel to the effect that the applicable circumstances or law has changed
and that in light thereof, there is substantial authority for contesting such
claim and (vi) the amount of the indemnity payments the Lessee would be
required to make with respect to such adjustment, when aggregated with similar
adjustments that could be raised in other taxable years of such Indemnitee
exceeds $50,000; provided, that in the event that such Indemnitee is not
required under this paragraph to contest any Tax liability for which the
Lessee is obligated to indemnify any Indemnitee, the Lessee may contest such
Tax liability in the name of the Lessee, if permitted by law. The Lessee may
appeal or require the Indemnitee to appeal any judicial decision provided the
foregoing requirements of this Section 8.04 are met and the Indemnitee shall
have received, at the Lessee's expense, an opinion of Tax Counsel, to the
effect that there is substantial authority for such appeal.
Nothing contained in this Section 8.04 shall require any
Indemnitee to contest or continue to contest, or permit Lessee to contest,
a claim which such Indemnitee would otherwise be required to contest
pursuant to this Section 8.04, if such Indemnitee shall waive payment by
Lessee of any amount that might otherwise be payable by Lessee under this
Article 8 in connection with such claim.
Section 8.05. Refunds. Upon receipt by an Indemnitee of a refund of
all or any part of any Taxes which the Lessee shall have paid for such
Indemnitee or for which the Lessee shall have reimbursed or indemnified such
Indemnitee, and provided there shall not have occurred and be continuing any
Payment Default, Bankruptcy Default or Event of Default by the Lessee
hereunder or under the Lease (in which case payment shall not be made to the
Lessee until such Payment Default, Bankruptcy Default or Event of Default
shall have been cured), such Indemnitee shall pay to the Lessee an amount
equal to the amount of such refund less (x) any expenses not previously
reimbursed, (y) all payments then due to such Indemnitee under this Article
8 and (z) Taxes imposed with respect to the accrual or receipt thereof,
including interest received attributable thereto, plus any tax benefit
actually realized by such Indemnitee as a result of any payment by such
Indemnitee made pursuant to this sentence; provided, however, that such amount
shall not be payable (a) before such time as the Lessee shall have made all
payments or indemnities then due and payable to such Indemnitee under this
Article 8 and (b) to the extent that the amount of such payment would exceed
(i) the amount of all prior payments by the Lessee to such Indemnitee pursuant
to this Article 8 less (ii) the amount of all prior payments by such
Indemnitee to the Lessee pursuant to this Article 8.
Any subsequent loss of such refund or tax benefit shall be treated as
a Tax subject to indemnification under the provisions of this Article 8 (in
the case of any such tax benefit, without regard to Section 8.01(b) hereof).
Section 8.06. Lessee's Reports. In case any report or return is
required to be made with respect to any Taxes against which the Lessee is or
may be obligated to indemnify the Indemnitees under this Article 8, the Lessee
shall make such report or return, except for any such report or return that
the Indemnitee has notified the Lessee that it intends to file, in such manner
as will show the ownership of the Aircraft in the Owner Trustee and shall send
a copy of the applicable portions of such report or return to the Indemnitee
and the Owner Trustee or will notify the Indemnitee of such requirement and
make such report or return in such manner as shall be satisfactory to such
Indemnitee and the Owner Trustee. The Lessee will provide such information
reasonably available to the Lessee as the Indemnitee may reasonably require
from the Lessee to enable the Indemnitee to fulfill its tax filing
requirements with respect to the transactions contemplated by the Operative
Agreements (without duplication of the requirements of Section 3 of the Tax
Indemnity Agreement) and any audit information request arising from any such
filing. The Indemnitee will provide such information reasonably available to
it as the Lessee may reasonably require from such Indemnitee to enable the
Lessee to fulfill its tax filing requirements with respect to the transactions
contemplated by the Operative Agreements and any audit information request
arising from such filing; provided that in no event shall any Indemnitee be
required to provide copies of any of its tax returns or other confidential
information. The Lessee shall hold the Indemnitee harmless on an After-Tax
Basis from and against any liabilities, including penalties, additions to tax,
fines and interest, imposed upon or incurred by such Indemnitee to the extent
directly attributable to any insufficiency or inaccuracy in any return,
statement, or report prepared by the Lessee or information supplied by the
Lessee, or directly attributable to the Lessee's failure to supply reasonably
available information to such Indemnitee as required by this Section 8.06.
Section 8.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 8 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of the Operative Agreements.
Section 8.08. Payment of Taxes. With respect to any Tax otherwise
indemnifiable hereunder by the Lessee and applicable to the Aircraft,
Airframe, any Engine or Parts, to the extent permitted by the applicable
federal, state, local or foreign law, the Lessee shall pay such tax directly
to the relevant Taxing authority and file any returns or reports required with
respect thereto to the extent legally entitled to do so in its own name;
provided, however, that the Lessee shall not make any statements or take any
action which would indicate that the Lessee or any Person other than the Owner
Trustee or Owner Participant is the owner of the Aircraft, the Airframe, any
Engine or any Part or which would otherwise be inconsistent with the terms of
the Lease or the Tax Indemnity Agreement and the position thereunder of the
Owner Trustee and the Owner Participant. Copies of such returns or reports,
together with evidence of payment of any tax due, shall be sent by the Lessee
to the Owner Participant within thirty (30) days after the date of each
payment by the Lessee of any Tax.
Section 8.09. Reimbursements by Indemnitees Generally. To the
extent the Lessee is required to pay or withhold any Tax imposed on or with
respect to an Indemnitee in respect of the transactions contemplated by the
Operative Agreements, which Tax is not otherwise the responsibility of the
Lessee under the Operative Agreements, or any other written agreements between
the Lessee and such Indemnitee, then such Indemnitee shall pay to the Lessee
within 30 days of the Lessee's demand therefor an amount which equals the
amount actually paid by the Lessee with respect to such Taxes.
Section 8.10. Special Indemnity. Notwithstanding anything in this
Article 8 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally. (a) The Lessee agrees to indemnify each
Indemnitee against and agrees to protect, defend, save and keep harmless each
Indemnitee from any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, disbursements and expenses
(including legal fees and expenses and all costs and expenses relating to
amendments, supplements, adjustments, consents, refinancings and waivers under
the Operative Agreements except as otherwise provided in Section 10.01(c)(i)
or Article 15 hereof) of every kind and nature, including without limitation
Make-Whole Premium (unless excluded pursuant to Section 3.03 of the Lease)
(whether or not any of the transactions contemplated by this Agreement are
consummated) (individually, an "Expense," collectively, "Expenses"), which
may be imposed on, incurred or suffered by or asserted against any Indemnitee,
in any way relating to, based on or arising out of:
(i) this Agreement (including, without limitation, the execution,
delivery and performance hereof by the Owner Participant prior to the
delivery of the Aircraft), the Lease, the Indenture, the Trust Agreement,
the Intercreditor Agreement, the Liquidity Facilities, the Pass Through
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale or any
other Operative Agreement or any other document entered into in connection
herewith or any sublease or transfer or any transactions contemplated
hereby or thereby;
(ii) the operation, possession, use, non-use, maintenance, storage,
overhaul, delivery, non-delivery, control, repair or testing of the
Aircraft, Airframe, or any Engine or any engine used in connection with the
Airframe, or any part thereof by the Lessee, any sublessee or any other
Person whatsoever, whether or not such operation, possession, use, non-use,
maintenance, storage, overhaul, delivery, non-delivery, control, repair or
testing is in compliance with the terms of the Lease, including without
limitation, claims for death, personal injury or property damage or other
loss or harm to any Person whatsoever, including, without limitation, any
passengers, shippers or other Persons wherever located, and claims relating
to any laws, rules or regulations, including, without limitation,
environmental control, noise and pollution laws, rules or regulation;
(iii) the manufacture, design, sale, return, purchase, acceptance,
rejection, delivery, non-delivery, condition, repair, modification,
servicing, rebuilding, airworthiness, registration, reregistration, import,
export, performance, non-performance, lease, sublease, transfer,
merchantability, fitness for use, alteration, substitution or replacement
of any Airframe, Engine, or Part under the Lease, the Purchase Agreement,
the Purchase Agreement Assignment, the GTA or the Engine Warranty
Assignment or other transfer of use or possession, or other disposition of
the Aircraft, the Airframe, any Engine or any Part including, without
limitation, latent and other defects, whether or not discoverable, strict
tort liability, and any claims for patent, trademark or copyright
infringement;
(iv) any breach of or failure to perform or observe, or any other
non-compliance with, any condition, covenant or agreement to be performed,
or other obligations of the Lessee under any of the Operative Agreements,
or the falsity or inaccuracy of any representation or warranty of the
Lessee in any of the Operative Agreements (other than representations and
warranties in the Tax Indemnity Agreement);
(v) the Collateral Account and the Liquid Collateral;
(vi) the enforcement of the terms of the Operative Agreements and
the administration of the Trust Indenture Estate; and
(vii) the offer, issuance, sale or delivery of any Certificate or any
Pass Through Certificate, or any refunding or refinancing thereof, or
interest in the Lessor's Estate or the Trust Agreement or any similar
interest or in any way relating to or arising out of the Trust Agreement
and the Lessor's Estate, the Indenture or the Trust Indenture Estate
(including, without limitation, any claim arising out of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, or
any other federal or state statute, law or regulation, or at common law or
otherwise relating to securities), or the action or inaction of the Owner
Trustee or Indenture Trustee as trustees, in the manner contemplated by
this Agreement, the Indenture, the Indenture and Security Agreement
Supplement or the Trust Agreement and in the case of the Owner Participant,
its obligations arising under Section 6.01 of the Trust Agreement.
The foregoing indemnity by the Lessee is intended to include and cover, but is
not limited to, any Expense to which the Indemnitees may be subject as a
result of their respective ownership or leasing of any interest in or holding
of any Lien on the Aircraft, Airframe, any Engine or Part during the Term,
whether or not in the Lessee's possession or control, insofar as such Expense
relates to any activity or event whatsoever involving such item while it is
under lease to the Lessee (or after termination of the Lease in connection
with the exercise of remedies thereunder to the extent that such Expense is
attributable to the transactions contemplated hereby and by the other
Operative Agreements), and such Expense does not fall within any of the
exceptions listed in Section 9.01(b) hereof.
(b) Exceptions. The indemnity provided for in Section 9.01(a) shall
not extend to any Expense of any Indemnitee to the extent it:
(i) would not have occurred but for the willful misconduct or gross
negligence of such Indemnitee;
(ii) after the Delivery Date, is in respect of the Aircraft, and is
attributable to acts or events which occur after the Aircraft is no longer
part of the Lessor's Estate or, if the Aircraft remains a part of the
Lessor's Estate, after the expiration of the Term (unless the Aircraft is
being returned at such time, in which case after return of physical
possession; provided that if the Lease has been terminated pursuant to
Article 17 thereof, the indemnity provided in Section 9.01(a) hereof shall
survive for so long as Lessor or the Indenture Trustee shall be exercising
remedies under such Article 17), or to acts or events which occur after
return of possession of the Aircraft by the Lessee in accordance with the
provisions of the Lease (subject to the foregoing proviso if the Lessor has
terminated the Lease pursuant to Article 17 of the Lease) but in any such
case only to the extent not fairly attributable to acts or omissions of the
Lessee prior to expiration of the Term, including without limitation the
Lessee's failure to fully discharge all of its obligations under the Lease
or the other Operative Agreements;
(iii) is a Tax, whether or not the Lessee is required to indemnify
therefor pursuant to Article 8 hereof or pursuant to the Tax Indemnity
Agreement;
(iv) is a cost or expense required to be paid by the Owner
Participant or its permitted transferees (and not by the Lessee) pursuant
to this Agreement or any other Operative Agreement and for which the Lessee
is not otherwise obligated to reimburse the Owner Participant, directly or
indirectly pursuant to the terms of this Agreement or such other Operative
Agreement;
(v) would not have been incurred by such Indemnitee if such
Indemnitee had not been in breach of its representations or warranties, or
had not defaulted in the observance and performance of the terms and
provisions required to be observed and performed by it, in this Agreement,
the Purchase Agreement Assignment, the Lease, the Indenture, the Trust
Agreement or any other Operative Agreement to which it is a party unless
such breach or default shall be a result of the breach or default by the
Lessee of any of its obligations under the Operative Agreements or by
another Indemnitee of any of the foregoing;
(vi) [reserved];
(vii) is, in the case of the Owner Participant, Lessor's Liens to the
extent attributable to the Owner Participant; in the case of the Owner
Trustee, Lessor's Liens to the extent attributable to the Owner Trustee; in
the case of SSB, Lessor's Liens to the extent attributable to SSB; and in
the case of the Indenture Trustee, Indenture Trustee's Liens;
(viii) is, in the case of the Owner Participant or the Owner Trustee,
attributable to the offer or sale by such Indemnitee after the Certificate
Closing Date of any interest in the Aircraft, the Lessor's Estate or the
Trust Agreement or any similar interest (including an offer or sale
resulting from bankruptcy or other proceedings for the relief of debtors in
which such Indemnitee is the debtor), unless in each case such offer or
sale shall occur (x) in connection with a Refinancing, (y) as a result of
the occurrence of an Event of Default provided that either the Lease has
been declared in default or the transfer is pursuant to the exercise of
remedies under Article 17 of the Lease or (z) in connection with the
Lessee's exercise of its early termination option under Article 10 of the
Lease or its purchase options under Article 4 of the Lease or in connection
with Article 11 of the Lease;
(ix) is an Expense arising under or in connection with any
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code ("Prohibited Transaction"); provided,
however, that in the event any prohibited transaction arises which is
not exempt under any class prohibited transaction exemption or any
individual or statutory prohibited transaction exemption (individually
or collectively, a "PTE") then the indemnity provided for herein shall
extend to any Expenses incurred by the Owner Participant (or any
Affiliate thereof) as the result of any Prohibited Transaction arising
out of the purchase or holding of any Certificates by an employee
benefit plan subject to Title I of ERISA or by a plan subject to Section
4975 of the Code (individually or collectively, an "ERISA Plan") with
respect to which the Owner Participant is a party in interest, within
the meaning of Section 3(14) of ERISA, or a disqualified person,within
the meaning of Section 4975 of the Code, except, however, that such
Indemnity shall not extend to any Expenses incurred by the Owner
Participant (or any Affiliate thereof) as the result of any Prohibited
Transaction occurring with respect to the purchase or holding of any
Certificates (A) over which purchase or holding the Owner Participant
(or an Affiliate thereof) has discretion or control (other than in the
capacity of a custodian, directed trustee or other similar
nondiscretionary capacity), or (B) by an ERISA Plan with respect to
which the Owner Participant (or any Affiliate thereof) is a "plan
sponsor" within the meaning of Section 3(16)(B) of ERISA.
Section 9.02. After-Tax Basis. The amount which the Lessee shall be
required to pay with respect to any Expense indemnified against under Section
9.01 shall be an amount sufficient to restore the Indemnitee, on an After-Tax
Basis, to the same position such party would have been in had such Expense not
been incurred. If any Indemnitee actually realizes a permanent Tax benefit by
reason of the payment of such Expense paid or indemnified against by the
Lessee which was not considered in the computation thereof, such Indemnitee
shall promptly pay to the Lessee, but not before the Lessee shall have made
all payments theretofore due such Indemnitee under this Agreement, the Tax
Indemnity Agreement and any other Operative Agreement, an amount equal to the
lesser of (x) the sum of such Tax benefit plus any other permanent Tax benefit
actually realized by such Indemnitee as the result of any payment made by such
Indemnitee pursuant to this sentence and (y) the amount of such payment
pursuant to this Section 9.02 by the Lessee to such Indemnitee plus the amount
of any other payments by the Lessee to such Indemnitee theretofore made
pursuant to this Section 9.02 less the amount of any payments by such
Indemnitee to the Lessee theretofore made pursuant to this Section 9.02 (and
the excess, if any, of the amount described in clause (x) above over the
amount described in clause (y) above shall be carried forward and applied to
reduce pro tanto any subsequent obligations of the Lessee to make payments to
such Indemnitee pursuant to this Section 9.02), it being intended that no
Indemnitee should realize a net Tax benefit pursuant to this Section 9.02
unless the Lessee shall first have been made whole for any payments by it to
such Indemnitee pursuant to this Section 9.02; provided, however, that
notwithstanding the foregoing portions of this sentence, such Indemnitee shall
not be obligated to make any payment to the Lessee pursuant to this sentence
so long as an Event of Default shall have occurred and be continuing. Any
Taxes that are imposed on any Indemnitee as a result of the disallowance or
reduction of such Tax benefit referred to in the next preceding sentence in a
taxable year subsequent to the year of allowance and utilization by such
Indemnitee (including the expiration of any tax credit carryovers or
carrybacks of such Indemnitee that would not otherwise have expired) shall be
indemnifiable pursuant to the provisions of Section 8.01 hereof without regard
to Section 8.01(b) hereof.
Section 9.03. Subrogation. Upon the payment in full of any
indemnity pursuant to this Article 9 by the Lessee (but not earlier), the
Lessee shall be subrogated to any right of the Indemnitee, other than with
respect to any of such Indemnitee's insurance policies or in connection
with any indemnity claim the Person indemnified may have against any other
Indemnitee in respect of the matter against which such indemnity has been
made.
Section 9.04. Notice and Payment. Each Indemnitee and the Lessee
shall give prompt written notice one to the other of any liability of which
such party has received notice for which the Lessee is, or may be, liable
under this Article 9; provided, however, that failure to give such notice
shall not terminate any of the rights of the Indemnitees under this Article 9,
except (with respect to such Indemnitee) to the extent that the Lessee has
been materially prejudiced by the failure to provide such notice. Unless
otherwise provided in the Operative Agreements, any amount payable to an
Indemnitee pursuant to this Article 9 shall be paid within 30 days after
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the basis for such indemnity
and the computation of the amount so payable.
Section 9.05. Refunds. If any Indemnitee shall obtain a recovery of
all or any part of any amount which the Lessee shall have paid to such
Indemnitee or for which the Lessee shall have reimbursed such Indemnitee under
this Article 9, and provided there shall not have occurred a Payment Default
or an Event of Default (in which case payment shall not be made to the Lessee
until such Payment Default or Event of Default shall have been cured) such
Indemnitee shall pay to the Lessee the amount of any such recovery, including
interest received with respect to the recovery, net of any Taxes paid or
payable as a result of the receipt of the recovery and interest, plus any net
additional permanent income tax benefits actually realized by Indemnitee as
the result of any payment made pursuant to this sentence less any reasonable
costs and expense of any Indemnitee not reimbursed by the Lessee; provided,
however, that such amount shall not be payable (a) before such time as the
Lessee shall have made all payments or indemnities then due and payable to
such Indemnitee under this Article 9 or (b) to the extent that the amount of
such payment would exceed the amount of all prior payments by the Lessee to
such Indemnitee pursuant to this Article 9, less the amount of all prior
payments by such Indemnitee to the Lessee pursuant to this Article 9. Any
subsequent loss of such recovery or tax benefit shall be subject to
indemnification under Article 8 or this Article 9, as the case may be, but
without regard to Section 8.01(b) hereof, other than Section 8.01(b)(v)
hereof.
Section 9.06. Defense of Claims. The Lessee or its insurers shall
have the right (in each such case at the Lessee's sole expense) to investigate
or, provided that (i) the Lessee or its insurers shall not reserve the right
to dispute liability with respect to any insurance policies pursuant to which
coverage is sought, (ii) in the case of the Lessee, no Payment Default or
Event of Default shall have occurred and be continuing or shall arise at any
time during the claim and (iii) the Lessee shall have first acknowledged in
writing to such Indemnitee the Lessee's obligation to indemnify such
Indemnitee hereunder in respect of such claim, defend any such claim
covered by insurance for which indemnification is sought pursuant to this
Article 9 and each Indemnitee shall cooperate with the Lessee or its
insurers with respect thereto, and provided, further, the Lessee shall not
be entitled to assume and control the defense of any such claim if and to
the extent (A) such Indemnitee reasonably objects to such control on the
ground that an actual or potential material conflict of interest exists
where it is advisable for such Indemnitee to be represented by separate
counsel or on the grounds that such proceeding involves the potential
imposition of criminal liability on such Indemnitee or (B) such proceeding
will involve any material danger of the sale, forfeiture or loss of, or the
creation of any Lien on the Aircraft or the Trust Estate (unless the Lessee
posts a bond or other security reasonably acceptable in form and substance
to such Indemnitee) or involve any material risk of civil liability to such
Indemnitee for which it is not indemnified hereunder. Subject to the
immediately foregoing sentence, where the Lessee or the insurers under a
policy of insurance maintained by the Lessee undertake the defense of an
Indemnitee with respect to such a claim, no additional legal fees or
expenses of such Indemnitee in connection with the defense of such claim
shall be indemnified hereunder unless the fees or expenses were incurred at
the written request of the Lessee or such insurers. Subject to the
requirement of any policy of insurance applicable to a claim, an Indemnitee
may participate at its own expense at any judicial proceeding controlled by
the Lessee or its insurers pursuant to the preceding provisions, to the
extent that such party's participation does not, in the opinion of the
independent counsel appointed by the Lessee or its insurers to conduct such
proceedings, interfere with such control; and such participation shall not
constitute a waiver of the indemnification provided in this Section 9.06.
No Indemnitee shall enter into any settlement or other compromise with
respect to any claim described in this Section 9.06 without the prior
written consent of the Lessee, which consent shall not unreasonably be
withheld or delayed, unless such Indemnitee waives its right to be
indemnified under this Article 9 with respect to such claim. The Lessee
shall not enter into any settlement or compromise which the Lessee has not
agreed to discharge or with respect to which the Lessee has not agreed to
indemnify such Indemnitee to such Indemnitee's satisfaction or which admits
any criminal violation, gross negligence or willful misconduct on the part
of any Indemnitee without the prior written consent of such Indemnitee.
Section 9.07. Survival of Obligations. The representations,
warranties, indemnities and agreements of the Lessee provided for in this
Article 9 and the Lessee's obligations under any and all of them shall survive
the expiration or other termination of this Agreement, the Tax Indemnity
Agreement, the Trust Agreement, the Indenture, the Purchase Agreement
Assignment, the Engine Warranty Assignment, the Lease and the other Operative
Agreements but, as to such indemnities after the expiration or other
termination of the Lease, only with respect to losses, liabilities,
obligations, damages, penalties, claims, actions, suits, costs, Expenses and
disbursements caused by events occurring or existing (or fairly attributable
to the Lessee's acts or omissions) prior to such termination or expiration or
incurred in the process of (i) the return or disposition of the Aircraft under
Article 12 or Article 17 of the Lease, or (ii) the termination of the Lease or
the Indenture or, if later, the return of the Aircraft.
Section 9.08. Effect of Other Indemnities. The Lessee's obligations
under the indemnities provided for in this Agreement shall be those of a
primary obligor whether or not the Person indemnified shall also be
indemnified with respect to the same matter under the terms of this Agreement,
the Lease, the Indenture, the Trust Agreement, or any other document or
instrument, and the Person seeking indemnification from the Lessee pursuant to
any provision of this Agreement may proceed directly against the Lessee
without first seeking to enforce any other right of indemnification.
Section 9.09. Interest. The Lessee will pay to each Indemnitee on
demand, to the extent permitted by applicable law, interest on any amount of
indemnity not paid when due pursuant to this Article 9 until the same shall be
paid, at the Past Due Rate.
Section 9.10. Special Indemnity. Notwithstanding anything in this
Article 9 to the contrary, the Lessee shall hold the Owner Participant
harmless on an After-Tax Basis from any Taxes or losses arising from or in
connection with the transactions contemplated by Section 17.02 hereof.
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs. (a) Transaction
Costs. The Owner Participant shall pay (or reimburse the Lessee if the Lessee
shall have previously made such payment) all fees and expenses of the
following persons relating to the public offering of the Pass Through
Certificates contemplated by the Underwriting Agreement and related to the
transactions contemplated hereby on the Certificate Closing Date and the
Delivery Date: (i) the fees and expenses of counsel for the Owner Participant;
(ii) the fees and expenses of the transaction documentation counsel for the
Lessee and counsel for the Owner Trustee, the Indenture Trustee, the
Subordination Agent, the Pass Through Trustee, each Liquidity Provider and the
Underwriters (other than those fees, expenses and disbursements payable by the
Underwriters pursuant to the Underwriting Agreement); (iii) the fees and
expenses of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇; (iv) any initial fees and expenses
of the Pass Through Trustee and each Liquidity Provider and the fees and
expenses of the Owner Trustee, the Subordination Agent and the Indenture
Trustee; (v) any compensation, commissions and discounts payable to the
Underwriters pursuant to the Underwriting Agreement; (vi) the fees, if any,
incurred in printing the Pass Through Certificates; (vii) the fees and
expenses incurred in connection with printing any amendment to the
Registration Statement on Form S-3 bearing Registration No. 333-07691,
printing any Preliminary Prospectus or Prospectus (as such terms are defined
in the Underwriting Agreement) for the offering of the Pass Through
Certificates; (viii) the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP; (ix) the
fees and expenses of ▇▇▇▇▇'▇ and S&P; (x) the fees and expenses (including
computer time-sharing charges) of First Chicago Leasing Corporation; (xi) the
reasonable out-of-pocket expenses of the Owner Participant, including, without
limitation, any amounts paid in connection with any appraisal report prepared
on behalf of the Owner Participant; (xii) reimbursement to the Owner
Participant, the Owner Participant Guarantor, the Owner Trustee, the Indenture
Trustee, the Subordination Agent, each Liquidity Provider and the Pass Through
Trustee for any and all fees, expenses and disbursements of the character
referred to above or otherwise incurred in connection with the negotiation,
preparation, execution and delivery, filing and recording of the Operative
Agreements and the documents contemplated thereby, including, without
limitation, travel expenses and disbursements which shall have been paid by
such party; (xiii) printing and duplicating expenses and all fees, taxes and
other charges payable in connection with the recording or filing on or
before the Delivery Date of the instruments described in this Agreement;
(xiv) initial fees, initial expenses, initial disbursements and the initial
costs of distributing the Certificates (but not the continuing fees,
expenses, disbursements and costs of distribution) of SSB, as lessor under
the Lease and as Owner Trustee under the Trust Agreement and with respect
to the administration of the Lease and the Lessor's Estate, of the
Indenture Trustee as trustee under the Indenture with respect to the
administration of the Trust Indenture Estate and of the Subordination Agent
acting under the Intercreditor Agreement; and (xv) any other amounts
approved by the Lessee and the Owner Participant. The fees and expenses
described in clauses (ii) through (x) of this paragraph shall be allocable
to the Owner Participant under this Agreement (1) to the extent incurred
specifically with respect to the Owner Participant, and (2) to the extent
such fees and expenses are incurred but are not specifically attributable
to the Owner Participant, in the proportion that the principal amount of
the Certificates bears to the total amount of the Pass Through
Certificates.
The Owner Participant, the Owner Trustee and the Lessee acknowledge
that the percentages for Basic Rent, Stipulated Loss Value and Termination
Value set forth in the Lease have been prepared assuming the aggregate amount
payable by the Owner Participant pursuant to the preceding paragraph is 1.15%
of the Purchase Price (the "Estimated Expense Amount"). Transaction Costs
shall be paid in the manner provided in Section 3.04 hereof.
(b) Continuing Expenses. The continuing fees, expenses and
disbursements (including reasonable counsel fees and expenses) of the entity
acting as Owner Trustee, as lessor under the Lease and as Owner Trustee under
the Trust Agreement with respect to the administration of the Lease and the
Lessor's Estate and the continuing fees, expenses and disbursements (including
reasonable counsel fees and expenses and initial fees relating to the
establishment of any replacement trustee) of the Indenture Trustee, as trustee
under the Indenture with respect to the administration of the Trust Indenture
Estate, the continuing fees, expenses and disbursements (including reasonable
counsel fees and initial fees relating to the establishment of a replacement
trustee) of the Pass Through Trustee and the Subordination Agent and the
continuing fees, expenses and disbursements (including reasonable counsel fees
and initial fees relating to the establishment of a replacement liquidity
provider) of the Liquidity Providers under each Liquidity Facility shall be
paid as Supplemental Rent by the Lessee, including without limitation any
amounts payable to the Indenture Trustee or on account of requests by the
Indenture Trustee for indemnification under Article XI of the Indenture.
(c) Amendments, Supplements and Appraisal. Without limitation of
the foregoing, the Lessee agrees:
(i) to pay as Supplemental Rent to the Owner Trustee, the Owner
Participant, Owner Participant Guaranty, the Indenture Trustee, the
Subordination Agent, the Liquidity Providers and the Pass Through Trustee
all costs and expenses (including reasonable legal fees and expenses)
incurred by any of them in connection with (a) any Default or Event of
Default and any enforcement or collection proceedings resulting therefrom,
or (b) the enforcement of the obligations of the Lessee hereunder or under
the other Operative Agreements, including, without limitation, the entering
into or giving or withholding of any amendments or supplements or waivers
or consents (whether or not consummated), including without limitation, any
amendment, supplement, waiver or consent resulting from any work-out,
restructuring or similar proceeding relating to the performance or
nonperformance by the Lessee of its obligations under the Operative
Agreements or (c) any amendment, supplement, waiver or consent (whether or
not entered into) under this Agreement, the Lease, the Indenture, the
Certificates, the Tax Indemnity Agreement, the Purchase Agreement
Assignment or any other Operative Agreement or document or instrument
delivered pursuant to any of them, which amendment, supplement, waiver or
consent is required by any provision of any Operative Agreement (including
any adjustment pursuant to Section 3.04 of the Lease) or is requested by
the Lessee or necessitated by the action or inaction of the Lessee;
provided, however, that the Lessee shall not be responsible for fees and
expenses incurred in connection with the offer, sale or other transfer
(whether pursuant to Section 7.03(d) hereof or otherwise) by the Owner
Participant after the Certificate Closing Date of any interest in the
Aircraft, the Lessor's Estate, the Beneficial Interest or the Trust
Agreement or any similar interest (and the Owner Participant shall be
responsible for all such fees and expenses), unless such offer, sale or
transfer shall occur (A) after the Lease has been declared in default or if
the transfer is pursuant to the exercise of remedies under Article 17 of
the Lease or (B) in connection with the termination of the Lease or action
or direction of the Lessee pursuant to Section 4.02, Article 10 or Article
11 of the Lease; and
(ii) to pay the fees, costs and expenses of all appraisers involved
in an independent appraisal of the Aircraft to the extent required under
Section 4.03 of the Lease.
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee. (a)
Resignation and Removal. The Owner Trustee or any successor Owner Trustee may
resign or may be removed by the Owner Participant, and a successor Owner
Trustee may be appointed and a Person may become Owner Trustee under the Trust
Agreement only in accordance with the provisions of Section 3.11 of the Trust
Agreement and the provisions of paragraphs (b) and (c) of this Section 11.01.
(b) Conditions to Appointment. The appointment in any manner of a
successor Owner Trustee pursuant to Section 3.11 of the Trust Agreement shall
be subject to the following conditions:
(i) Such successor Owner Trustee shall be a Citizen of the United
States;
(ii) Such successor Owner Trustee shall be a bank or a trust company
having combined capital, surplus and undivided profits of at least
$100,000,000 or a bank or trust company fully guaranteed by a direct or
indirect parent thereof having a combined capital, surplus and undivided
profits of at least $100,000,000;
(iii) Such appointment shall not violate any provisions of the
Transportation Code or any applicable rule or regulation of the applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered or create a relationship which would be in violation
of the Transportation Code or any applicable rule or regulation of the
applicable regulatory agency or body of any other jurisdiction in which the
Aircraft may then be registered;
(iv) Such successor Owner Trustee shall enter into an agreement
or agreements, in form and substance reasonably satisfactory to the
Lessee, the Owner Participant, the Pass Through Trustee and the
Indenture Trustee whereby such successor Owner Trustee confirms that it
shall be deemed a party to this Agreement, the Trust Agreement, the
Lease, the Lease Supplement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, the Indenture, the Indenture Supplement and
any other Operative Agreement to which the Owner Trustee is a party and
agrees to be bound by all the terms of such documents applicable to the
Owner Trustee and makes the representations and warranties contained in
Section 7.04 hereof (except that it may be duly incorporated, validly
existing and in good standing under the laws of the United States of
America or any State thereof); and
(v) All filings of Uniform Commercial Code financing and continuation
statements, filings in accordance with the Transportation Code and
amendments thereto shall be made and all further actions taken in
connection with such appointment as may be necessary in connection with
maintaining the validity, perfection and priority of the Lien of the
Indenture and the valid and continued registration of the Aircraft in
accordance with the Transportation Code.
(c) Appointment. For so long as the Aircraft remains registered
under the Transportation Code, the Owner Participant agrees to appoint
promptly a successor Owner Trustee meeting the requirements of Section
11.01(b) hereof in the event the Owner Participant has knowledge that the
Owner Trustee at any time shall not be a Citizen of the United States.
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant. The Owner
Participant shall have no obligation or duty to the Lessee or to any Holder
with respect to the transactions contemplated by this Agreement, except those
obligations or duties expressly set forth in this Agreement, the Indenture,
the Trust Agreement, the Tax Indemnity Agreement, AVSA's FAA ▇▇▇▇ of Sale,
AVSA's Warranty ▇▇▇▇ of Sale, the Lease or any other Operative Agreement to
which the Owner Participant is a party and the Owner Participant shall not be
liable for the performance by any party hereto of such other party's
obligations or duties hereunder. Under no circumstances shall the Owner
Participant as such be liable to the Lessee, nor shall the Owner
Participant be liable to any Holder, for any action or inaction on the part
of the Owner Trustee or the Indenture Trustee in connection with this
Agreement, the Indenture, the Lease, the Trust Agreement, the Purchase
Agreement Assignment, the Engine Warranty Assignment, any other Operative
Agreement, the ownership of the Aircraft, the administration of the
Lessor's Estate or the Trust Indenture Estate or otherwise, whether or not
such action or inaction is caused by the willful misconduct or gross
negligence of the Owner Trustee or the Indenture Trustee.
Section 12.02. Interest of Holders of Certificates. A Holder of a
Certificate shall have no further interest in, or other right with respect to,
the Trust Indenture Estate when and if the principal and interest on all
Certificates held by such Holder and all other sums payable to such Holder
under this Agreement, under the Indenture and under such Certificates shall
have been paid in full.
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents. The Lessee
hereby consents in all respects to the execution and delivery of the
Indenture, the Intercreditor Agreement and the Liquidity Facilities and to all
of the terms of said documents, and the Lessee acknowledges receipt of an
executed counterpart of such documents; it being agreed that such consent
shall not be construed to require the Lessee's consent to any future
supplement to, or amendment, waiver or modification of the terms of the
Indenture, the Intercreditor Agreement or the Liquidity Facilities or the
Certificates, except that prior to the occurrence and continuance of an Event
of Default, no section of the Indenture, the Trust Agreement, the
Intercreditor Agreement or the Liquidity Facilities shall be amended or
modified in any manner materially adverse to the Lessee without its consent.
Section 13.02. Further Assurances. The Lessee hereby confirms to
the Owner Participant its covenants set forth in and obligations under the
Lease. The Lessee agrees that, except as otherwise provided in the
Indenture, the Owner Trustee may not enter into any amendment, modification
or supplement of, or give any waiver or consent with respect to, or approve
any matter or document as being satisfactory under the Lease without the
prior consent of the Indenture Trustee and the Owner Participant and that,
except as otherwise provided in the Indenture, upon an Indenture Event of
Default, the Indenture Trustee may act as the Lessor under the Lease to the
exclusion of the Owner Trustee. The Lessee further agrees to deliver to
the Indenture Trustee and the Owner Participant a copy of each notice,
statement, request, report or other communication given or required to be
given to the Owner Trustee under the Lease.
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment. The Pass Through Trustee and the Subordination Agent hereby
acknowledge and agree to be bound by all of the terms and conditions of the
Indenture, including without limitation, Section 8.01 thereof regarding the
rights of the Owner Participant to purchase the Certificates under
circumstances specified therein.
ARTICLE 14
NOTICES
Section 14.01. Notices. All notices, demands, declarations and
other communications required by this Agreement shall be in writing and
shall be deemed received (a) if given by telecopier, when transmitted and
the appropriate telephonic confirmation received if transmitted on a
Business Day and during normal business hours of the recipient, and
otherwise on the next Business Day following transmission, (b) if given by
certified mail, return receipt requested, postage prepaid five Business
Days after being deposited in the United States mail and (c) if given by
FedEx service (or, if a Default or Event of Default shall have occurred and
be continuing, by other comparable courier service), when received or
personally delivered, addressed:
(a) If to the Lessee, to its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President and Treasurer with a
copy to Senior Vice President and General Counsel at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, facsimile
(▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessee shall from time to
time designate in writing to the Lessor, the Indenture Trustee and the
Owner Participant;
(b) If to the Lessor or the Owner Trustee, to it ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (617)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the Lessor
shall from time to time designate in writing to the Lessee and the
Indenture Trustee, with a copy to the Owner Participant;
(c) If to the Owner Participant, to its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President Leasing with
a copy to Director, Portfolio Administration, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
facsimile ▇▇▇ ▇▇▇-▇▇▇▇, or to such other address as the Owner Participant
may from time to time designate in writing to the Lessee and the Indenture
Trustee;
(d) If to the Indenture Trustee, the Subordination Agent or the Pass
Through Trustee, to its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department, telephone (801)
▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as the
Indenture Trustee or the Pass Through Trustee, as the case may be, shall
from time to time designate in writing to the Lessor, the Lessee and the
Owner Participant; and
(e) If to a Liquidity Provider, to its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Manager, telephone
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address as a
Liquidity Provider shall from time to time designate in writing to the
Lessor, the Lessee and the Indenture Trustee.
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing. (a) Subject to the terms and
conditions of this Section 15.01, the Lessee may request the Owner Participant
to participate in up to two refinancings in whole but not in part, of the
Certificates prior to the end of the Basic Term (a "Refinancing"). Such
Refinancings may be placed in either the private or public markets and shall
be denominated in United States dollars (or in any other foreign currency so
long as the Owner Participant is satisfied there is no foreign currency risk
to it), and shall be on terms that do not materially adversely affect the
Owner Participant. The Owner Participant agrees to negotiate promptly in good
faith to conclude an agreement with the Lessee as to the terms of any such
Refinancing transaction (including the terms of any debt to be issued in
connection with such refinancing and the documentation to be executed in
connection therewith). Without the prior written consent of the Owner
Participant, the prospectus and other offering materials relating to any
Refinancing in the form of a public offering shall not identify the Owner
Participant and shall not include any financial statements of the Owner
Participant or any Affiliate thereof. In connection with any such Refinancing
in the form of a public offering, the Lessee shall indemnify the Owner
Participant in a manner satisfactory to it for any liabilities under federal,
state or foreign securities laws resulting from such offering. The aggregate
principal amount of the new Certificates issued in connection with each
Refinancing shall be the same as the aggregate principal amount outstanding on
the Certificates being refinanced.
(b) Notwithstanding anything herein to the contrary, no Refinancing
will be permitted unless the Owner Participant and the Indenture Trustee shall
have received at least 15 days' prior written notice of the scheduled closing
date of such Refinancing and the Owner Participant shall have been provided
such longer period as it shall have required for a reasonable opportunity to
review the relevant documentation and the Owner Participant shall have
determined in good faith that neither it nor the Owner Trustee shall suffer
any loss or expense or bear any increased risk as a result of such Refinancing
(including, without limitation, any risk with respect to taxes or other
adverse consequences to the Owner Participant including the application of
Revenue Procedures 75-21 and 75-28 and Section 467 of the Code) for which it
has not been or will not have been indemnified by the Lessee in a manner
reasonably satisfactory to the Owner Participant, nor shall its rights against
all other parties taken as a whole be adversely affected compared to such
rights in effect under the Operative Agreements prior to such proposed
Refinancing.
Prior to the consummation of any Refinancing pursuant to this Section
15.01, the Owner Participant and the Lessee shall agree upon a schedule
setting forth each installment of Basic Rent and setting forth Stipulated Loss
Values and Termination Values payable pursuant to the Lease as a result of the
Refinancing in accordance with Section 3.04 of the Lease, and thereafter the
amounts set forth in such schedule shall become the amounts payable under the
Lease. Upon the consummation of the Refinancing, the evidence of indebtedness
issued pursuant to the Refinancing shall be considered "Certificates" for
purposes of this Agreement, the Lease and the Indenture.
(c) Notwithstanding the foregoing, the Owner Participant shall have
no obligation to proceed with any Refinancing transaction as contemplated by
this Section 15.01 unless the Lessee indemnifies the Owner Trustee and the
Owner Participant by agreement in form and substance satisfactory to each of
them, for any liability, obligation (other than the obligation to pay
principal and interest in respect of the refinanced indebtedness), cost or
expense (including, without limitation, reasonable attorneys' fees and
Make-Whole Premium or other amounts due under the Indenture), including any
adverse tax consequences or impact, related to or arising out of any such
Refinancing transaction.
(d) Without the prior written consent of the Owner Participant,
which consent may be withheld in its sole discretion, no such refinancing
shall (1) cause the aggregate principal amount of the indebtedness to be
substituted for the Certificates to exceed the aggregate principal amount
of the then outstanding Certificates, (2) cause the weighted average life
of such indebtedness to be different by more than 6 months than the
remaining weighted average life of the then outstanding Certificates, or
(3) cause the date of maturity of such indebtedness to be later than the
date of maturity of the Certificates being refinanced.
(e) Each party agrees to take or cause to be taken all requested
action, including, without limitation, the execution and delivery of any
documents and instruments, including, without limitation, amendments or
supplements to the Lease, which may be reasonably necessary or desirable to
effect such Refinancing, including, in the case of the Owner Participant,
direction to the Owner Trustee by the Owner Participant to prepay the
Certificates then outstanding; provided, however, that such Refinancing shall
be subject to the satisfaction of each of the following conditions:
(i) Payment of principal, accrued interest, Make-Whole Premium
and breakage costs, if any, and all other sums due and owing on the
Certificates payable under the Indenture;
(ii) Payment in full of all other amounts then due and owing by the
Lessee under this Agreement, the Indenture, the Lease, the Trust Agreement,
and the Certificates then outstanding shall have been made by the Lessee;
(iii) Such party shall have received such opinions of counsel
(including, without limitation, an opinion received by the Owner
Participant from independent tax counsel reasonably satisfactory to the
Lessee that such Refinancing shall not result in any adverse tax
consequences to such Owner Participant, unless the Lessee shall have agreed
to provide an indemnity in respect thereof reasonably satisfactory in form
and substance to the Owner Participant), certificates and other documents
as it may reasonably request, each in form and substance reasonably
satisfactory to such party;
(iv) All authorizations, approvals and consents which in the
reasonable judgment of the Owner Participant are necessary for such
Refinancing shall have been obtained;
(v) The Lessee shall have provided or agreed to provide to the
Owner Participant, as Supplemental Rent under the Lease, sufficient
funds to pay any breakage costs, Make-Whole Premium and any other
amounts due under the Indenture;
(vi) The satisfaction or waiver by each other party to this
Agreement of the conditions set forth in this Section 15.01 to such
party's obligations under this Section 15.01;
(vii) No Payment Default, Bankruptcy Default or Event of Default
shall have occurred and be continuing or would occur immediately after
giving effect to such Refinancing;
(viii) In the event the Lessee shall not prohibit the purchase of
the Refinancing loan certificates by, or with the assets of, an employee
benefit plan, as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA or a plan or individual retirement account, which is
subject to Section 4975(c) of the Code, (individually or collectively, an
"ERISA Plan"), the Lessee will permit the placement of the Refinancing loan
certificates with an ERISA Plan only if either (A) if such placement is in
the form of pass through certificates, the sole underwriter or the manager
or co-manager of the underwriting syndicate or the selling or placement
agent of the Refinancing loan certificates represents to the Lessee that it
has a prohibited transaction exemption from the U.S. Department of Labor
with respect to pass through certificates (such as Prohibited Transaction
Exemption 89-88 or any other comparable exemption) or (B) purchasers of the
Refinancing loan certificates provide a representation (which may be in the
form of a deemed representation) regarding their source of funds used in
acquiring the Refinancing loan certificates and, if such purchasers
represent that they are using funds of an ERISA Plan in acquiring the
Refinancing loan certificates, such purchasers further represent that (1)
either they are relying on a prohibited transaction exemption from the U.S.
Department of Labor with respect to their purchase and holding of the
Refinancing loan certificates and they provide representations regarding
the satisfaction of the relevant conditions of such an exemption or (2)
their purchase and holding of the Refinancing loan certificates will not
constitute a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code. The reliance on any such exemption
will not be conditional on the Owner Participant's representation
concerning its party in interest or other status with respect to ERISA
Plans. If neither exemption referred to in clause (A) or (B) of this
paragraph (viii) is valid or applicable in any respect to the purchase
and holding of the Refinancing loan certificates, or if the
representation in clause (B) of this paragraph (viii) that such purchase
and holding will not constitute a non-exempt prohibited transaction is
not correct, whichever is applicable, then the Lessee shall indemnify
the Owner Participant pursuant to, and to the extent provided for, under
Sections 8 and 9 hereof for Taxes and Expenses resulting from any
"prohibited transaction", within the meaning of Section 406 of ERISA or
Section 4975(c)(1) of the Code, occurring with respect to the placement
of the Refinancing loan certificates with, or the holding of the
Refinancing loan certificates by, any ERISA Plan with respect to which
the Owner Participant is a party in interest, within the meaning of
Section 3(14) of ERISA, or a disqualified person, within the meaning of
Section 4975 of the Code, provided, however, that if the Lessee shall
fail to obtain either of the representations set forth in clause (A) or
(B) of this paragraph (viii), such indemnity shall not be subject to the
exceptions set forth under Sections 8.01(b)(xii)(A) and (B) and
9.01(b)(ix)(A) and (B) hereof; and
(ix) The Lessee shall pay all costs and expenses (including legal
fees) incurred in connection with any proposed or actually consummated
Refinancing.
Section 15.02. Reoptimization. (a) If a Change in Tax Rate occurs
prior to the end of the Basic Term, then, subject to the terms and conditions
of this Section 15.02 and Section 3.04 of the Lease, the Owner Participant
may, upon 30 days' prior notice to the Lessee, the Indenture Trustee, the
Owner Trustee and the Holders, elect to modify the schedule of payments of
principal of the certificates issued ("Refinancing Certificates") in
connection with any Refinancing using private debt (not including debt issued
pursuant to an exemption from registration under the Securities Act relying on
Rule 144A promulgated thereunder but otherwise marketed in a manner
substantially similar to securities registered under the Securities Act, and
not including debt issued in connection with any offering of securities
registered under the Securities Act) due on each remaining Rent Payment Date
on or commencing on the Rent Payment Date next succeeding the date mutually
agreed to by the Owner Participant, the Lessee and the Indenture Trustee on
which the Owner Participant shall make such modification (the "Reoptimization
Date"). Promptly after making such modification, the Owner Participant shall
furnish each party hereto written notice of the amounts so recalculated.
(b) Adjustments to Refinancing Certificates. On the Reoptimization
Date, subject to the satisfaction on or before the Reoptimization Date of the
conditions set forth in Section 15.02(c), the Owner Trustee will issue and
deliver and the Indenture Trustee will authenticate, and each holder of a
Refinancing Certificate will accept delivery of, a new Refinancing Certificate
or Refinancing Certificates (in replacement of each Refinancing Certificate
then held by such holder, which Refinancing Certificates shall be surrendered
to the Indenture Trustee for cancellation) containing such changed principal
installments (expressed as a percentage of the original principal amount of
such Refinancing Certificate) as shall have been recalculated by the Owner
Participant, but in the same principal amount as, and containing terms
identical to, except as otherwise contemplated by Section 15.02(d) hereof, the
Refinancing Certificates originally issued in connection with the Operative
Agreements.
(c) Conditions to the Obligations of the Holders of the Refinancing
Certificates on the Reoptimization Date. The obligation of each holder of a
Refinancing Certificate to accept delivery of a new Refinancing Certificate on
the Reoptimization Date, and to surrender on such Reoptimization Date any
Refinancing Certificate then held by it, is subject to the following
conditions precedent having been satisfied on or before the Reoptimization
Date:
(i) the requirements of Section 15.02(d) hereof shall have been
satisfied;
(ii) the following documents, in form and substance satisfactory to
such Holder, shall have been duly authorized, executed and delivered by the
party or parties thereto and shall be in full force and effect: (A) if the
payments of Basic Rent, Stipulated Loss Values and Termination Values with
respect to the Term have been changed, an amendment to the Lease, dated the
Reoptimization Date, (B) an amendment to the Indenture setting forth any
changed repayment schedule to the Refinancing Certificates, dated the
Reoptimization Date and duly filed (or in the process of being so duly
filed) for recordation with the Aeronautics Authority and (C) replacement
Refinancing Certificates; and
(iii) in connection with any Reoptimization the Owner Participant
shall pay or agree to pay all reasonable costs and expenses incurred by the
Lessee, the Owner Trustee, the Indenture Trustee and each Holder of a
Refinancing Certificate (including, without limitation, reasonable legal
fees and expenses) in connection with any such reoptimization.
(d) Payment Schedules. Except as otherwise provided in this
Section 15.02 as long as the Refinancing Certificates remain outstanding,
the payment schedules for the Refinancing Certificates shall not be
modified.
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes. It is hereby agreed
between the Owner Participant and the Lessee (but the Lessee makes no
representation to such effect) that it is the intent of the parties for
Federal, state, local and foreign income tax purposes that the Owner
Participant will be treated as the owner of the Aircraft and the Lessee will
be treated as the lessee of the Aircraft.
Section 17.02. Collateral Account. (a) The Indenture Trustee shall
notify the Owner Trustee and the Lessee of any losses incurred on the
Specified Investments in the Collateral Account promptly upon the realization
thereof, as well as any fees, commissions and other costs, Taxes (other than
income taxes) and expenses, if any, incurred by the Indenture Trustee in
connection with its administration of the Collateral Account (collectively,
"Losses"). Promptly upon receipt of such notification but, in any event, no
later than the earlier of the Delivery Date (or, if later, the last day of any
investment period referred to in Section 2.14(b) of the Indenture during which
the Delivery Date occurs) and the 15th day after the Cut-Off Date, the Lessee
shall pay to the Indenture Trustee, on behalf of the Owner Trustee, for
deposit into the Collateral Account, an amount equal to such Losses (net of
any investment earnings).
(b) The Lessee shall pay to the Indenture Trustee, on behalf of the
Owner Trustee (A) on each Payment Date prior to the Delivery Date an amount
equal to the aggregate amount of interest accrued on the Certificates from
(and including) the Certificate Closing Date or previous Payment Date, as the
case may be, to, but excluding, such Payment Date and (B) on the first Payment
Date subsequent to the Delivery Date, interest accrued on the Certificates
from and including the last Payment Date (or, if none, the Certificate Closing
Date), to, but excluding, the Delivery Date. In addition, the Lessee will pay
to the Indenture Trustee on behalf of the Owner Trustee all amounts owed by
the Owner Trustee pursuant to clause (b) of the last paragraph of Section 2.04
of the Indenture.
(c) If the Aircraft has not been purchased by the Owner Trustee
on the Delivery Date, the Lessee agrees to pay to the Indenture Trustee, on
behalf of the Owner Trustee, on the 15th day following the Cut-Off Date the
excess, if any, of the amounts payable under Section 6.02(b)(1) of the
Indenture over the amounts released from the Collateral Account under
Section 2.16 of the Indenture.
(d) All amounts payable by the Lessee pursuant to this Section 17.02
shall be paid to the Indenture Trustee at its principal office at ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust
Department, or as the Indenture Trustee may otherwise direct within the United
States, by wire transfer of immediately available funds in U.S. Dollars no
later than 10:30 a.m., New York City time, on the due date of such payment.
Section 17.03. Counterparts. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section 17.04. No Oral Modifications. Neither this Agreement nor
any of its terms may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification is sought. No such written termination, amendment, supplement,
waiver or modification shall be effective unless a signed copy shall have been
delivered to and executed by the Owner Trustee and the Indenture Trustee. A
copy of each such termination, amendment, supplement, waiver or modification
shall also be delivered to each other party to this Agreement.
The consent of each of the Pass Through Trustee and the Subordination
Agent, in its capacity as a party to this Agreement and not as a Holder, shall
not be required to modify, amend or supplement this Agreement or to give any
consent, waiver, authorization or approval with respect to this Agreement
under the circumstances in which the consent of the Indenture Trustee would
not be required for such modification, amendment, supplement, consent, waiver
or approval in accordance with Section 8.01(b) of the Indenture, provided that
the Pass Through Trustee shall be entitled to receive an Opinion of Counsel
(as defined in the Pass Through Agreement) necessary, in its sole discretion,
to establish that the Indenture Trustee's consent would not be required under
such circumstances.
Section 17.05. Captions. The table of contents preceding this
Agreement and the headings of the various Articles and Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions of this Agreement.
Section 17.06. Successors and Assigns. The terms of this Agreement
shall be binding upon, and shall inure to the benefit of, the Lessee and its
successors and permitted assigns, the Subordination Agent and its successors
and permitted assigns, including without limitation each Holder of a
Certificate, the Owner Participant and its successors and permitted assigns,
the Owner Trustee and its successors as Owner Trustee (and any additional
owner trustee appointed) under the Trust Agreement, the Indenture Trustee and
its successors as Indenture Trustee (and any additional indenture trustee
appointed) under the Indenture and the Pass Through Trustee and its successors
as Pass Through Trustee (and any additional pass through trustee appointed).
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and
the Pass Through Trustee. Each of SSB and FSB is entering into this Agreement
solely in their respective capacities (except to the extent otherwise
expressly indicated), in the case of SSB, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement, in the case of FSB, not in
its individual capacity but solely as Indenture Trustee under the Indenture
and as Pass Through Trustee under the Pass Through Agreement, and except as
otherwise expressly provided in this Agreement or in the Lease, the Indenture,
the Pass Through Agreement or the Trust Agreement, neither SSB, nor FSB,
shall be personally liable for or on account of its statements,
representations, warranties, covenants or obligations under this Agreement;
provided, however, that each of SSB and FSB accepts the benefits running to it
under this Agreement, and each agrees that (except as otherwise expressly
provided in this Agreement or any other Operative Agreement to which it is a
party) it shall be liable in its individual capacity for (a) its own gross
negligence or willful misconduct (whether in its capacity as trustee or in its
individual capacity), (b) any breach of representations and warranties or any
breach of covenants made in its individual capacity pursuant to or in
connection with this Agreement or the other Operative Agreements to which
it is a party, (c) any breach, in the case of the Owner Trustee, of its
covenants contained in Sections 3.05 and 3.08 of the Indenture, (d) the
failure to use ordinary care in receiving, handling and disbursing funds,
(e) in the case of the Owner Trustee, Lessor's Liens attributable to it in
its individual capacity, (f) in the case of the Indenture Trustee,
Indenture Trustee's Liens and (g) taxes, fees or other charges on, or based
on, or measured by, any fees, commissions or compensation received by it in
connection with the transactions contemplated by the Operative Agreements.
Section 17.08. Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 17.09. Public Release of Information. Subject to applicable
legal requirements (including, without limitation, securities laws
requirements, other regulatory requirements and other legally compelled
disclosures), so long as there shall not have occurred an Event of Default or
Indenture Event of Default, each party to this Agreement shall in each
instance obtain the prior written approval of each other party to this
Agreement concerning the exact text and timing of news releases, articles and
other information releases to the public media concerning any Operative
Agreements.
Section 17.10. Certain Limitations on Reorganization. The Indenture
Trustee and the Pass Through Trustee agree that, if (i) the Owner Trustee
becomes or all or any part of the Lessor's Estate or the trust created by the
Trust Agreement becomes the property of, a debtor subject to the
reorganization provisions of the Bankruptcy Code or any other applicable
bankruptcy or insolvency statutes, (ii) pursuant to any such reorganization
provisions, the Owner Participant is held to have recourse liability to the
debtor, the Owner Trustee or the trustee of the debtor directly or indirectly
on account of any amount payable as Make-Whole Premium, principal or interest
on the Certificates, or any other amount payable on any Certificate that is
provided in the Operative Agreements to be nonrecourse to the Owner
Participant and (iii) the Indenture Trustee actually receives any Recourse
Amount which reflects any payment by the Owner Participant on account of (ii)
above, then the Indenture Trustee, as the case may be, shall promptly refund
to the Owner Participant such Recourse Amount. For purposes of this Section
17.10, "Recourse Amount" means the amount by which the portion of such payment
by the Owner Participant on account of clause (ii) above received by the
Indenture Trustee exceeds the amount which would have been received by the
Indenture Trustee if the Owner Participant had not become subject to the
recourse liability referred to in (ii) above. Nothing contained in this
Section shall prevent the Indenture Trustee from enforcing any individual
obligation (and retaining the proceeds thereof) of the Owner Participant under
this Agreement or any other Operative Agreement to the extent herein or
therein provided, for which the Owner Participant has expressly agreed by the
terms of this Agreement to accept individual responsibility.
Section 17.11. GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS AND IS BEING DELIVERED IN NEW
YORK.
Section 17.12. Section 1110 Compliance. The parties hereto agree
that the transactions contemplated by the Operative Agreements are expressly
intended to be, shall be and should be construed so as to be entitled to the
benefits and protection of Section 1110 of the Bankruptcy Code.
Section 17.13. Reliance of Liquidity Providers. Each of the parties
hereto agrees and acknowledges that each Liquidity Provider shall be a third
party beneficiary of each of the representations and warranties made herein by
such party, and that each Liquidity Provider may rely on such representations
and warranties to the same extent as if such representations and warranties
were made to such Liquidity Provider directly. The terms of this Agreement
shall inure to the benefit of each Liquidity Provider, their respective
successors and permitted assigns.
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality. Each party hereto agrees (on behalf
of itself and each of its Affiliates, agents, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature, any non-public information supplied to it pursuant to this
Agreement which is identified by the Person supplying the same as being
confidential at the time the same is delivered to such party, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any of the parties hereto, (iii) to bank examiners or similar
regulatory authorities, auditors or accountants, (iv) in connection with any
litigation to which any one or more of the parties hereto is a party relating
to the transactions contemplated hereby or by any of the Operative Agreements,
(v) to an Affiliate of the parties hereto, (vi) to any assignee or participant
(or prospective assignee or participant) or other transferee so long as such
assignee or participant (or prospective assignee or participant) or other
transferee first executes and delivers to the respective party making such
assignment or participation an agreement in writing to be bound by the
provisions of this Section 18.01 or (vii) in the case of the Owner Participant
or the Owner Trustee (in its individual or trust capacity) to the Owner
Trustee (in its individual or trust capacity) or to the Owner Participant, as
the case may be.
IN WITNESS WHEREOF, the parties have caused this Participation
Agreement to be executed by their respective, duly authorized officers and
this Participation Agreement shall be effective this 22nd day of May, 1997.
LESSEE:
FEDERAL EXPRESS CORPORATION
By:__________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Treasurer and Managing
Director - Structured Finance
OWNER PARTICIPANT:
PMCC LEASING CORPORATION
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Manager, Structured Finance
OWNER TRUSTEE:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity,
except as otherwise expressly provided herein,
but solely as Owner Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
INDENTURE TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Indenture Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PASS THROUGH TRUSTEE:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Pass Through Trustee
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SUBORDINATION AGENT:
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity except as
otherwise expressly provided herein,
but solely as Subordination Agent
By:__________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
CERTIFICATE INFORMATION
1. Federal Express Corporation 1997-1 Pass Through Trust Class A
Federal Express Corporation Trust No. N673FE
Interest Rate: 7.50%
Maturity: January 15, 2018
Principal Amount: $33,382,000
2. Federal Express Corporation 1997-1 Pass Through Trust Class B
Federal Express Corporation Trust No. N673FE
Interest Rate: 7.52%
Maturity: January 15, 2018
Principal Amount: $12,408,000
3. Federal Express Corporation 1997-1 Pass Through Trust Class C
Federal Express Corporation Trust No. N673FE
Interest Rate: 7.65%
Maturity: January 15, 2014
Principal Amount: $16,023,000
SCHEDULE II
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N673FE)
GENERAL PROVISIONS
The following terms shall have the following meanings for all
purposes of the Operative Agreements (other than the Pass Through Agreement,
the Series Supplements, the Intercreditor Agreement and the Liquidity
Facilities) referred to below, unless otherwise defined in an Operative
Agreement or the context thereof shall otherwise require. In the case of any
conflict between the provisions of this Schedule and the provisions of any
Operative Agreement, the provisions of such Operative Agreement shall control
the construction of such Operative Agreement.
Unless the context otherwise requires, (i) references to agreements
shall be deemed to mean and include such agreements as amended and
supplemented from time to time, and (ii) references to parties to agreements
shall be deemed to include the successors and permitted assigns of such
parties.
DEFINED TERMS:
Additional Insured. As defined in Article 13 of the Lease.
Aeronautics Authority. As appropriate, the Federal Aviation
Administration and/or the Administrator of the Federal Aviation
Administration, any successor to the former United States Civil Aeronautics
Board, or any Person, governmental department, bureau, commission or agency
located in the United States succeeding to the functions of any of the
foregoing.
Affidavits. The affidavits of citizenship of the Owner Trustee and
the Owner Participant.
Affiliate. With respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" (including "controlled
by" and "under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether through the ownership of voting securities or by contract
or otherwise. In no event shall the Owner Trustee or the Lessor be deemed an
Affiliate of the Owner Participant.
After-Tax Basis. A basis such that any payment to be received by a
Person shall be supplemented by a further payment to such Person so that the
sum of the two payments, after deduction of all Taxes resulting from the
receipt or accrual of such payments, shall be equal to the payment to be
received. In the case of amounts payable to the Lessor, the Owner Participant,
or any corporate Affiliate of the Owner Participant, it shall be presumed that
such Person is at all times subject to Federal income tax at the maximum
marginal rate generally applicable to corporations from time to time and
actual state, local and foreign income taxes.
Air Carrier. Any U.S. Air Carrier and any "foreign air carrier" (as
defined in the Transportation Code) as to which there is in force a permit
granted under Section 41302 of the Transportation Code.
Airbus Guaranty. The Guaranty to be dated the Delivery Date executed
by the Manufacturer and guaranteeing AVSA's Warranty ▇▇▇▇ of Sale.
Aircraft. The Airframe to be sold by AVSA to the Owner Trustee as
provided in the Participation Agreement and to be leased under the Lease (or
any permitted substitute airframe thereunder) together with two Engines
(whether either is an initial Engine or a Replacement Engine) whether or not
any of such initial or Replacement Engines may from time to time be installed
on such Airframe or may be installed on any other airframe or on any other
aircraft, including any aircraft substituted pursuant to Section 11.03 of the
Lease. Prior to delivery of the initial Lease Supplement, references in the
Operative Agreements (including Section 3.05 of the Participation Agreement)
to Aircraft shall mean the Airbus A300F4-605R airframe bearing FAA
Registration Number N673FE and Manufacturer's serial number 780, together with
two General Electric CF6-80C2-A5F engines.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) to be leased by the Lessor to the
Lessee pursuant to the Lease and the initial Lease Supplement and having the
United States FAA Registration Number initially and manufacturer's serial
number specified in the initial Lease Supplement, including (i) all Parts in
respect thereof and (ii) any Replacement Airframe which may be substituted
pursuant to Section 11.03 of the Lease.
Ancillary Agreement. Any written agreement of the Lessee to which the
Lessor is a party or to which the Lessor has consented in writing entered into
on or prior to the Delivery Date or any date thereafter in connection with the
transactions contemplated by the Operative Agreements, as such agreement may
be amended and supplemented from time to time with the consent of the Lessor
and delivered to the Owner Trustee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent, each Liquidity Provider and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N673FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Ancillary Agreement II. The Ancillary Agreement II (Federal Express
Corporation Trust No. N673FE), dated the Certificate Closing Date, among the
Lessee, the Owner Trustee, not in its individual capacity, but solely as Owner
Trustee, the Owner Participant and the Indenture Trustee not in its individual
capacity, but solely as Indenture Trustee, as originally executed or as
amended, modified or supplemented with the consent of all the parties thereto.
Application. The application for registration of the Aircraft with
the FAA in the name of the Owner Trustee.
Appraisal. The report prepared by BK Associates, Inc. and to be
delivered to the Owner Participant (with an abbreviated report to the Lessee)
on the Delivery Date pursuant to Section 4.02(h) of the Participation
Agreement.
Assignment and Assumption Agreement. Any agreement delivered in
compliance with Section 7.03(d) of the Participation Agreement.
Average Life Date. For any Certificate, the date which follows the
prepayment date by a period equal to the Remaining Weighted Average Life of
such Certificate.
AVSA. AVSA S.A.R.L., a societe a responsabilite limitee, organized
and existing under the laws of France.
AVSA Consent and Agreement. The Consent and Agreement dated as of
May 1, 1997, executed by AVSA.
AVSA's FAA ▇▇▇▇ of Sale. The ▇▇▇▇ of sale for the Airframe on AC
Form 8050-2, or such other form as may be approved by the Aeronautics
Authority, executed by AVSA in favor of the Owner Trustee and to be dated the
Delivery Date.
AVSA's Warranty ▇▇▇▇ of Sale. The full warranty ▇▇▇▇ of sale
covering the Aircraft (and specifically referring to each Engine) executed by
AVSA as owner of the Aircraft in favor of the Owner Trustee and to be dated
the Delivery Date.
Bankruptcy Code. The Federal Bankruptcy Code of 1978, as amended, and
any successor thereto.
Bankruptcy Default. An event specified in Section 16.01(e), (f) or
(g) of the Lease which either does or, with the giving of notice or lapse of
time or both, would constitute an Event of Default.
Basic Rent. The aggregate periodic rent payable for the Aircraft
throughout the Basic Term pursuant to Section 3.02 of the Lease, adjusted
pursuant to Article 3 of the Lease.
Basic Term. The period commencing at the beginning of the day on the
Delivery Date and ending at the end of the day on December 11, 2020, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant under the
Trust Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Memphis, Tennessee and the city in the
United States in which the office or agency is maintained by the Pass Through
Trustee for the payment of the Pass Through Certificates, and after the Lien
of the Indenture is discharged, Boston, Massachusetts.
Certificate Closing Date. The date of the closing with respect to the
purchase of Certificates by the Pass Through Trustee contemplated by Section
2.01(b) of the Participation Agreement.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N673FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
Change in Tax Law. Any change to the Code or the Treasury regulations
promulgated thereunder or the publication of any revenue ruling, revenue
procedure or any informational release by the Internal Revenue Service or the
Department of Treasury either of which would change or would allow a change in
the tax assumptions or structure upon which the lease economics were based,
provided that the Owner Participant or the Lessee has notified the other party
of such change in writing prior to the Delivery Date.
Change in Tax Rate. Any amendment, modification, deletion, addition,
or change to the Code which is enacted into law after the Delivery Date which
changes the highest marginal statutory rate of Federal income tax applicable
to the Owner Participant (other than a change which is in the nature of a
minimum tax).
Citizen of the United States. A citizen of the United States as
defined in Section 40102(a)(15) of the Transportation Code, or any analogous
part of any successor or substituted legislation or regulation at the time in
effect.
Class A Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Class B Liquidity Provider. Has the meaning specified in Section
1.01 of the Intercreditor Agreement.
Closings. The closing with respect to the acquisition of the Pass
Through Certificates by the Underwriters and the closing with respect to the
acquisition of Certificates by the Pass Through Trustee.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Collateral Account. The deposit account established and maintained
pursuant to Section 2.13 of the Indenture.
Collateral Account Control Agreement. The Collateral Account Control
Agreement dated as of May 1, 1997 among State Street Bank and Trust Company,
the Indenture Trustee and the Owner Trustee.
Commitment. The amount of the Owner Participant's participation in
the Purchase Price required to be made available or paid as provided in
Section 3.02 of the Participation Agreement.
Consent and Agreement. The Consent and Agreement dated as of May 1,
1997 executed by the Manufacturer.
Consent and Guaranty. The Consent and Guaranty of the Manufacturer
attached to the Purchase Agreement.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporation Trust Administration, or such other office at
which the Owner Trustee's corporate trust business shall be administered which
the Owner Trustee shall have specified by notice in writing to the Lessee, the
Owner Participant and the Indenture Trustee.
Corporate Trust Department. The Corporate Trust Department office of
the Indenture Trustee located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Department, or such other office at which
the Indenture Trustee's corporate trust business shall be administered which
the Indenture Trustee shall have specified by notice in writing to the Lessee,
the Owner Participant and the Owner Trustee.
CRAF Program. Has the meaning specified in Section 7.01(f) of the
Lease.
Cut-Off Date. December 10, 1997.
Debt Portion. The amount specified as such on Schedule IV to the
Participation Agreement.
Debt Rate. The weighted average (based on Outstanding principal
amount) rate of interest on the Certificates issued pursuant to the Indenture.
Default. Any event or condition which, with the lapse of time or the
giving of notice, or both, would constitute an Event of Default.
Delivery Date. The date on which the Aircraft is delivered and sold
by AVSA to the Lessor and leased by the Lessor to the Lessee under the Lease,
which date shall also be the date of the initial Lease Supplement.
Delivery Notice. Notice of the Aircraft's Delivery Date, given by
the Lessee as provided in Section 3.01 of the Participation Agreement and
including any notice with respect to a postponed Delivery Date given by the
Lessee pursuant to Section 3.05(c) of the Participation Agreement.
Eligible Deposit Account. Either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution with corporate trust powers
organized under the laws of the United States or any state thereof, or the
District of Columbia, and whose deposits are insured by the Federal Deposit
Insurance Corporation, provided that such institution also has a combined
capital and surplus of at least $100,000,000 and a rating of A or better from
the Thomson Bank Watch.
Eligible Institution. A depository institution organized under the
laws of the United States or any one of the states thereof, or the District of
Columbia, or any domestic branch of a foreign bank, which in any such case at
all times (a) has either (x) a long-term unsecured debt rating of at least Aa2
by Moody's or (y) a short-term certificate of deposit rating of P-1 by
Moody's, (b) has either (x) a long-term unsecured debt rating of a least AA by
S&P or (y) a short-term certificate of deposit rating of A-1+ by S&P and (c)
is a member of the Federal Deposit Insurance Corporation.
Engine. Each of the two General Electric CF6-80C2-A5F engines listed
by its manufacturer's serial number in the initial Lease Supplement and leased
pursuant to the Lease, whether or not from time to time installed on the
Airframe or installed on any other airframe or on any other aircraft, and any
Replacement Engine which may from time to time be substituted for an Engine
pursuant to Section 7.02(a)(vii), 10.02(c), 10.03, 11.03, 11.04 or 12.02 of
the Lease, together with all Parts related thereto. Except as otherwise
provided, at such time as a Replacement Engine shall be so substituted and the
Engine for which the substitution is made shall be released from the Lien of
the Indenture, such replaced Engine shall cease to be an "Engine" under the
Lease. The term "Engines" means, as of any date of determination, both Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1997, executed
by the Engine Manufacturer.
Engine Manufacturer. General Electric Company, a New York
corporation.
Engine Warranty Assignment. The Engine Warranty Assignment (Federal
Express Corporation Trust No. N673FE), dated as of May 1, 1997 between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. As defined in Section 8.01(b)(xii) of the Participation
Agreement.
Estimated Expense Amount. Has the meaning specified in Section
10.01(a) of the Participation Agreement.
Event of Default. Each of the events specified in Article 16 of the
Lease.
Event of Loss. Any of the following events with respect to the
Aircraft, the Airframe or any Engine: (i) loss of such property or its use (A)
for a period in excess of 60 days due to theft or disappearance or such longer
period, not to exceed 180 days from the end of such initial 60-day period, if
and so long as the location of such property is known to the Lessee and the
Lessee is diligently pursuing recovery of such property, or to the end of the
Term, if less (unless such theft or disappearance constitutes an Event of Loss
pursuant to (i)(B) or (ii) hereof) or (B) for a period in excess of 60 days
due to the destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use by Lessee for any reason whatsoever;
(ii) any damage to such property which results in an insurance settlement with
respect to such property on the basis of a total loss, or constructive or
compromised total loss; (iii) (1) condemnation, confiscation or seizure of, or
requisition of title to such property by the Government, any foreign
government or purported government or any agency or instrumentality thereof,
or (2) condemnation, confiscation, or seizure of, or requisition or taking of,
use of such property (A) by a foreign government or instrumentality or agency
of any such foreign government, for a period in excess of 180 days (or such
shorter period ending on the earlier of the expiration of the Term or on the
date on which an insurance settlement with respect to such property on the
basis of a total loss or constructive or compromised total loss shall occur)
or (B) by the Government for a period extending beyond the Term; and (iv) as a
result of any law, rule, regulation, order or other action by the Aeronautics
Authority or other governmental body having jurisdiction, the use of the
Aircraft or Airframe in the normal course of air transportation of cargo shall
have been prohibited by virtue of a condition affecting all Airbus A300-600
series aircraft equipped with engines of the same make and model as the
Engines for a period of twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period, shall be diligently
carrying forward all steps which are necessary or desirable to permit the
normal use of the Aircraft or Airframe or, in any event, if such use of the
Aircraft or the Airframe shall have been prohibited for a period of
twenty-four (24) consecutive months or until the end of the Term, if earlier.
The date of such Event of Loss shall be (s) the 61st day or the 241st day, as
the case may be, following loss of such property or its use due to theft or
disappearance (or the end of the Term or the Lessee's abandonment of diligent
efforts to recover such property, if earlier); (t) the 61st day following the
date of any destruction, damage beyond economic repair or rendition of such
property permanently unfit for normal use; (u) the date of any insurance
settlement on the basis of a total loss or constructive or compromised total
loss; (v) the date of any condemnation, confiscation, seizure or requisition
of title of such property; (w) the 181st day following condemnation,
confiscation, seizure or requisition for use of such property by a foreign
government referred to in clause (iii)(2)(A) above (or the end of the Term or
the date of any insurance settlement described therein, if earlier than such
181st day); (x) the last day of the Term in the case of requisition for use of
such property by the Government; (y) the last day of the 12 month or 24 month
period, referred to in clause (iv) above (or if earlier, the end of the Term
or abandonment of the Lessee's efforts to restore the normal use of the
Aircraft). An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if any Event of Loss occurs with respect to the Airframe.
Excepted Payments. Collectively, (i) indemnity, expense,
reimbursement or other payments paid or payable by the Lessee in respect of
the Owner Participant, the Owner Trustee in its individual capacity or any of
their respective successors, permitted assigns, directors, officers,
employees, servants and agents or Affiliates, pursuant to the Participation
Agreement or any other Operative Agreement or any indemnity hereafter granted
to the Owner Participant or the Owner Trustee in its individual capacity
pursuant to the Lease or the Participation Agreement, (ii) proceeds of public
liability insurance (or government indemnities in lieu thereof) in respect of
the Aircraft payable as a result of insurance claims paid for the benefit of,
or losses suffered by, the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by the Owner Participant, or their
respective successors, permitted assigns or Affiliates, (iii) proceeds of
insurance maintained with respect to the Aircraft by the Owner Participant
(whether directly or through the Owner Trustee) maintained in accordance with
Section 13.05 of the Lease but not required under Article 13 of the Lease,
(iv) payments of Supplemental Rent by the Lessee in respect of any amounts
payable under the Tax Indemnity Agreement, (v) any purchase price paid to the
Owner Participant for its interest in the Trust Estate pursuant to Section
7.03(d) of the Participation Agreement, (vi) subject to Section 3.05 of the
Lease, payments constituting increases in Basic Rent attributable to payments
arising pursuant to Section 5 of the Tax Indemnity Agreement, (vii) any
payments in respect of interest to the extent attributable to payments
referred to in clauses (i) through (vi) above and (viii) any right to demand,
collect or otherwise receive and enforce the payment of any amount described
in clauses (i) through (v) and (vii) above (except with respect to interest
attributable to payments referred to in clause (vi) above).
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
Fair Market Renewal Term. A term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the second paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
Fair Market Rental. An amount determined on the basis of, and equal
in amount to, the rental which would be obtained in an arm's-length
transaction between an informed and willing lessee and an informed and willing
lessor unaffiliated with such lessee, neither being under any compulsion to
lease. In such determination, it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Rental shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Fair Market Value. An amount determined on the basis of, and equal in
amount to, the value which would be obtained in an arm's-length transaction
between an informed and willing purchaser under no compulsion to buy and an
informed and willing seller unaffiliated with such purchaser and under no
compulsion to sell, assuming the Aircraft (or other property) is unencumbered
by the Lease. In such determination, except for purposes of Section 17.01 of
the Lease (when it shall be determined based upon the actual condition and
location of the Aircraft), it shall be assumed that the Aircraft is in the
condition required under the Lease in the case of return of the Aircraft
pursuant to Article 12 of the Lease and Fair Market Value shall be determined
in accordance with the provisions of Section 4.03 of the Lease.
Federal Aviation Administration; FAA. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
Final Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Fixed Renewal Rent. Semi-annual payments of rent during the Fixed
Renewal Term equal to the lesser of (i) Fair Market Rental as determined as of
the commencement of such Fixed Renewal Term and (ii) 50% of the average actual
semi-annual Basic Rent payable during the Basic Term.
Fixed Renewal Term. The term with respect to which the Lessee has
exercised its option to renew the Lease pursuant to the first paragraph of
Section 4.01(a) thereof and with respect to which the conditions set forth in
such Section 4.01(a) are met.
FPO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
French Pledge Agreement. The French Pledge Agreement dated as of May
1, 1997 between the Owner Trustee and the Indenture Trustee.
FSB. First Security Bank, National Association, a national banking
association.
Government. The United States of America or an agency or
instrumentality thereof the obligations of which bear the full faith and
credit of the United States of America.
GTA. The General Terms Agreement dated as of July 3, 1991 between the
Engine Manufacturer and the Lessee related to the purchase by the Lessee of the
Engines as originally executed or as modified, amended or supplemented in
accordance with the terms thereof, but only insofar as the General Terms
Agreement relates to the Engines, to the extent assigned to the Owner Trustee
pursuant to the Engine Warranty Assignment.
Holder of a Certificate; Certificate Holder; Holder. As of any
particular time, the Person in whose name a Certificate shall be registered
(but not including the holder of any Pass Through Certificate).
Indemnitee. Each of SSB, in its individual capacity and as Owner
Trustee and Lessor, the Subordination Agent, in its individual capacity and in
its capacity as Subordination Agent, each Liquidity Provider, the Owner
Participant, the Indenture Trustee, in its individual capacity and as trustee,
the Owner Participant Guarantor and any successor (including any trustee which
may succeed to the Lessor's interest under the Lease), Affiliate, assign,
officer, director, employee, agent and servant of any of the foregoing, the
Lessor's Estate and the Trust Indenture Estate. Neither the Pass Through
Trustee nor any holder of a Pass Through Certificate shall be deemed to be an
Indemnitee.
Indenture. The Trust Indenture and Security Agreement (Federal
Express Corporation Trust No. N673FE), dated as of May 1, 1997, between the
Lessor and the Indenture Trustee, as supplemented by the Indenture and
Security Agreement Supplement.
Indenture and Security Agreement Supplement. The Indenture and
Security Agreement Supplement No. 1 (Federal Express Corporation Trust No.
N673FE) to be dated the Delivery Date, substantially in the form of Exhibit A
to the Indenture.
Indenture Default. Any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute an Indenture Event of
Default.
Indenture Documents. Has the meaning specified in the Granting
Clause of the Indenture.
Indenture Event of Default. Each of the events specified in Section
7.01 of the Indenture.
Indenture Trustee. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture.
Indenture Trustee's Liens. Any Lien against, on or with respect to
the Aircraft, the Lessor's Estate or the Trust Indenture Estate or any part
thereof resulting from (i) claims against the Indenture Trustee not related to
the administration of the Trust Indenture Estate or any transactions pursuant
to the Indenture or any document included in the Trust Indenture Estate, (ii)
any act or omission of the Indenture Trustee which is not related to the
transactions contemplated by the Operative Agreements or is in violation of
any of the terms of the Operative Agreements or (iii) Taxes imposed against
the Indenture Trustee in its individual capacity in respect of which the Lessee
has not indemnified (and is not obligated to indemnify) the Indenture Trustee
in such capacity.
Independent Appraisal. An appraisal conducted pursuant to Section
4.03 of the Lease.
Independent Investment Banker. An independent investment banking
institution of national standing appointed by the Lessee that is independent
in fact, does not have any direct financial interests, or any material
indirect financial interest, in the Lessee or any Affiliate of the Lessee, and
is not connected with the Lessee or any Affiliate of the Lessee, as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions; provided, that if the Indenture Trustee shall
not have received written notice of such an appointment at least 10 days prior
to the Prepayment Date, "Independent Investment Banker" shall mean such an
institution appointed by the Indenture Trustee.
Intercreditor Agreement. The Intercreditor Agreement dated as of May
1, 1997, among the Pass Through Trustee, the Class A Liquidity Provider, the
Class B Liquidity Provider and the Subordination Agent.
Interest Drawing. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Invoice. The invoice for the Aircraft given by AVSA to the Lessor.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N673FE) dated as of May 1, 1997, entered into by the Lessor and the Lessee
concurrently with the execution and delivery of the Indenture, including,
without limitation, supplementation by one or more Lease Supplements entered
into pursuant to the applicable provisions of the Lease.
Lease Supplement. The Lease Supplement No. 1 (Federal Express
Corporation Trust No. N673FE) to be dated the Delivery Date, substantially in
the form of Exhibit A to the Lease.
Lease Term. The period commencing on the Delivery Date and ending at
the end of the Basic Term.
Lessee. Federal Express Corporation, a Delaware corporation.
Lessee Documents. Has the meaning set forth in Section 6.01(b) of the
Participation Agreement.
Lessor. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, not in its individual capacity
but solely as Owner Trustee under the Trust Agreement.
Lessor's Estate. All estate, right, title and interest of the Owner
Trustee in and to the Collateral Account, the Liquid Collateral, the Aircraft,
the Lease, any Lease Supplement, the Participation Agreement, AVSA's FAA ▇▇▇▇
of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus Guaranty, the Purchase
Agreement, the Purchase Agreement Assignment, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), any Ancillary Agreement, the GTA, the
Engine Warranty Assignment, the Engine Consent, any warranty with respect to
the Airframe and the Engines, all amounts of Basic Rent and Supplemental Rent,
including without limitation, insurance proceeds (other than insurance
proceeds payable to or for the benefit of the Owner Trustee in its individual
capacity or the Owner Participant) and requisition, indemnity or other
payments of any kind for or with respect to the Aircraft (except amounts owing
to the Owner Participant, to the Indenture Trustee, to the Owner Trustee in its
individual capacity, or to any of their respective directors, officers,
employees and agents pursuant to Articles 8 and 9 of the Participation
Agreement), and all other property of the Owner Trustee purportedly subjected
to the Lien of the Indenture by the Granting Clause thereof; provided that in
no event shall "Lessor's Estate" include any Excepted Payment.
Lessor's Liens. Liens against, on or with respect to the Aircraft,
the Lessor's Estate or the Trust Indenture Estate or any part thereof, title
thereto or any interest therein arising as a result of (i) claims against the
Lessor, in its individual capacity or as Owner Trustee, or the Owner
Participant, in each case not related to the transactions contemplated by the
Operative Agreements, (ii) acts or omissions of the Lessor in its individual
capacity or as Owner Trustee, and, in the case of the Lessor in its individual
capacity, arising from its gross negligence or willful misconduct or expressly
prohibited under the Operative Agreements and any act or omission of the Owner
Participant which is in violation of any of the terms of the Operative
Agreements, (iii) Taxes or Expenses imposed against the Lessor, in its
individual capacity or as Owner Trustee, Owner Participant, Lessor's Estate or
the trust created by the Trust Agreement which are not required to be
indemnified against by the Lessee pursuant to the Participation Agreement by
reason of Section 8.01(b) or 9.01(b) thereof and which are not required to be
indemnified against by the Lessee pursuant to the Tax Indemnity Agreement, or
(iv) claims against the Lessor or the Owner Participant arising from the
voluntary transfer by the Lessor or the Owner Participant of its interests in
the Aircraft other than a transfer of the Aircraft pursuant to Section 4.02(a)
or Article 10 or 11 of the Lease and other than a transfer pursuant to the
exercise of the remedies set forth in Article 17 of the Lease.
Lien. Any mortgage, pledge, lien, charge, encumbrance, lease or
security interest or other similar interest.
Liquid Collateral. All amounts and securities deposited from time to
time in the Collateral Account and all the products, investments, earnings and
proceeds of the foregoing, including, but not limited to, all proceeds of the
investment or conversion thereof, voluntary or involuntary, into cash,
Specified Investments or other property, all rights to payment of any and
every kind, and other forms of obligations, and instruments and other property
which at any time constitute all or part or are included in the proceeds of
any of the foregoing.
Liquidity Facility. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Liquidity Provider. Has the meaning specified in Section 1.01 of the
Intercreditor Agreement.
Losses. Has the meaning specified in Section 17.02(a) of the
Participation Agreement.
Loss Payee. Has the meaning specified in Section 13.02(b)(i) of the
Lease.
Majority in Interest of Certificate Holders. As of a particular date
of determination, the Holders of more than 50% of the aggregate unpaid
principal amount of all Certificates outstanding as of such date excluding for
purposes of this definition any Certificates held by (i) the Owner Trustee or
the Owner Participant or any interests of the Owner Participant unless all
Certificates then outstanding shall be held by the Owner Participant, (ii) the
Lessee or (iii) any Affiliate of any thereof.
Make-Whole Premium. An amount determined as of the day before the
applicable Prepayment Date (or date of purchase, as the case may be) which an
Independent Investment Banker determines to be equal to the excess, if any, of
(i) the present value of the remaining scheduled payments of such principal
amount or portion thereof and interest thereon (excluding interest accrued
from the immediately preceding Payment Date to such Prepayment Date or date of
purchase, as the case may be) to the Maturity of such Certificate in
accordance with generally accepted financial practices assuming a 360-day year
consisting of twelve 30-day months at a discount rate equal to the Treasury
Yield, all as determined by the Independent Investment Banker over (ii) the
outstanding principal amount of such Certificate plus accrued interest.
Manufacturer. Airbus Industrie G.I.E., a groupement d'interet
economique formed under the laws of France.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Moody's. ▇▇▇▇▇'▇ Investors Service, Inc.
Net Present Value of Rents. The net present value, as of the
Delivery Date, of Basic Rent set forth in Schedule II of the Lease, discounted
at a rate equal to the Debt Rate per annum compounded semi-annually.
Non-U.S. Person. Any Person other than a U.S. Person.
Obsolete Parts. Parts which are severable from the Aircraft in
accordance with clauses (ii) and (iii) of the proviso to Section 9.02(b) of
the Lease and the Lessee in good faith determines to be obsolete or no longer
suitable or appropriate for use on the Airframe or any Engine.
Officer's Certificate. When delivered pursuant to the Indenture, a
certificate signed by a Responsible Officer of the Lessee or the Owner
Trustee, as the case may be, and delivered to the Indenture Trustee. Each
such certificate shall include the statements provided for in Section 15.07 of
the Indenture.
Operative Agreements. The Participation Agreement, the Trust
Agreement, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇ of Sale, the Airbus
Guaranty, the Purchase Agreement, the Purchase Agreement Assignment, the GTA,
the Engine Warranty Assignment, the French Pledge Agreement, the Lease, the
Lease Supplement, the Owner Participant Guaranty, the Owner Trustee Guaranty,
if any, any Ancillary Agreement entered into by or with the written consent of
the Indenture Trustee, which by its terms is an Operative Agreement, the
Certificates outstanding at the time of reference, the Indenture, the
Indenture and Security Agreement Supplement, the Consent and Agreement, the
AVSA Consent and Agreement, the Consent and Guaranty (to the extent assigned
by the Purchase Agreement Assignment), the Engine Consent, the Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Account Control Agreement and any Assignment and Assumption
Agreement.
Opinion of Counsel. When delivered pursuant to the Indenture, a
written opinion of legal counsel, who in the case of counsel (a) for the
Lessee may be (i) an attorney employed by the Lessee who is generally
empowered to deliver such written opinions, (ii) ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ or a
successor firm or (iii) other counsel designated by the Lessee and reasonably
satisfactory to the Indenture Trustee and (b) for the Owner Trustee or the
Indenture Trustee, an attorney selected by such Person and, in the case of the
Owner Trustee, reasonably satisfactory to the Indenture Trustee.
Outstanding. When used with respect to Certificates, as of the date
of determination and subject to the provisions of Section 10.04 of the
Indenture, all Certificates theretofore executed and delivered under the
Indenture, with the exception of the following:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 of the Indenture or otherwise;
(ii) Certificates for which prepayment money in the necessary amount
has been theretofore deposited with the Indenture Trustee in trust
for the Holders of such Certificates pursuant to Section 14.01 of the
Indenture; provided, that if such Certificates are to be prepaid,
notice of such prepayment has been duly given pursuant to the
Indenture or provision therefor satisfactory to the Indenture Trustee
has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to Article II
of the Indenture.
Owner Participant. The trustor originally named in the Trust
Agreement and any successor thereto, and any Person to which the Owner
Participant transfers, in accordance with the Trust Agreement, its right,
title and interest in and to the Operative Agreements and the Lessor's Estate.
Owner Participant Guarantor. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Certificate Closing Date by the Owner Participant Guarantor in favor of the
Lessee, the Owner Trustee, the Indenture Trustee and the Pass Through Trustee,
and any guaranty delivered in compliance with Section 7.03(d) of the
Participation Agreement.
Owner Trustee. SSB, not in its individual capacity except as
otherwise expressly stated, but solely as Owner Trustee under the Trust
Agreement.
Owner Trustee Guarantor. The provider of an Owner Trustee Guaranty.
Owner Trustee Guaranty. Any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's anticipated net
after-tax book yield and aggregate after-tax cash during the Basic Term
utilizing the multiple investment sinking fund method of analysis, computed on
the basis of the same methodology and assumptions as were utilized by the
Owner Participant in determining Basic Rent, Stipulated Loss Value and
Termination Value percentages, as the case may be, as such assumptions may be
adjusted for events which have been the basis of adjustments to Rent pursuant
to Section 3.04 of the Lease.
Participation Agreement. The Participation Agreement (Federal Express
Corporation Trust No. N673FE), dated as of May 1, 1997, among the Lessee, the
Owner Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as owner trustee, the Owner Participant, the
Indenture Trustee not in its individual capacity except as otherwise expressly
provided therein, but solely as indenture trustee, the Pass Through Trustee
not in its individual capacity except as otherwise expressly provided therein,
but solely as pass through trustee and the Subordination Agent not in its
individual capacity except as otherwise expressly provided therein, but solely
as subordination agent.
Parts. All appliances, parts, components, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature (other than
complete Engines or engines) which may from time to time be incorporated or
installed in or attached to the Airframe or any Engine or title to which
remains vested in the Lessor pursuant to Article 8 of the Lease.
Pass Through Agreement. The Pass Through Trust Agreement dated as of
May 1, 1997 between the Lessee and the Pass Through Trustee.
Pass Through Certificates. Any of the Pass Through Certificates,
1997-1-A, the Pass Through Certificates, 1997-1-B or the Pass Through
Certificates, 1997-1-C, in each case as issued by the related Pass Through
Trust; and "Pass Through Certificates" means all of the Pass Through
Certificates issued by each of the Pass Through Trusts.
Pass Through Closing Date. The Business Day on which the sale of the
Pass Through Certificates to the Underwriters pursuant to the Underwriting
Agreement takes place.
Pass Through Trust. The Federal Express Corporation 1997-1 Pass
Through Trust Class A, Federal Express Corporation 1997-1 Pass Through Trust
Class B and Federal Express Corporation 1997-1 Pass Through Trust Class C, in
each case formed pursuant to the related Series Supplement in accordance with
the Pass Through Agreement; and "Pass Through Trusts" means all of such Pass
Through Trusts.
Pass Through Trustee. First Security Bank, National Association, a
national banking association, in its capacity as Pass Through Trustee under
the Pass Through Agreement and each Pass Through Trust.
Past Due Rate. In respect of (A) any amount payable to the Owner
Participant or the Owner Trustee a rate per annum during the period from and
including the due date to but excluding the date on which such amount is paid
in full equal to 2% plus the Debt Rate and (B) any principal of or interest on
any Certificate or any other amount payable under the Indenture, any
Certificate or any other Operative Agreement that is not paid when due
(whether at Maturity, by acceleration, by optional or mandatory prepayment or
otherwise) to any Holder, the Indenture Trustee or the Pass Through Trustee, a
rate per annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to (i) in the
case of any such amount payable to the Holder of any Certificate, 2% plus the
interest rate applicable to such Certificate and (ii) in the case of any other
such amount, 2% plus the Debt Rate.
Payment Date. Each January 15 and July 15 commencing on July 15,
1997.
Payment Default. Any event specified in Section 16.01(a) or 16.01(b)
of the Lease which with the giving of notice or lapse of time or both would
constitute an Event of Default.
Permitted Investments. Those investments enumerated in Section
23.01(a) (i), (ii), (iii) and (iv) of the Lease.
Person. Any individual, sole proprietorship, partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
corporation, institution, entity or government (federal, state, local,
foreign or any agency, instrumentality, division or body thereof).
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
December 27, 2011, with respect to the Series B Certificates, February 5, 2010
and with respect to the Series C Certificates, March 22, 2007.
Prepayment Date. Has the meaning specified in Section 6.02(b) of the
Indenture.
Prepayment Price. Has the meaning specified in Section 6.02(b) of the
Indenture.
Principal Amount. With respect to a Certificate means the stated
original principal amount of such Certificate and, with respect to all
Certificates, means the aggregate stated original principal amounts of all
Certificates.
Property. Any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
Proposed Termination Date. The proposed date of termination of the
Lease as specified by the Lessee in its notice given pursuant to Section 10.01
thereof.
Purchase Agreement. The Airbus A300-600R Freighter Purchase Agreement,
dated as of July 3, 1991 between AVSA and the Lessee, including all exhibits,
appendices and letter agreements attached thereto as originally executed or as
modified, amended or supplemented in accordance with the terms thereof, but
only to the extent that the foregoing relates to the Aircraft and to the
extent assigned pursuant to the Purchase Agreement Assignment.
Purchase Agreement Assignment. The Purchase Agreement Assignment
(Federal Express Corporation Trust No. N673FE), dated as of May 1, 1997 between
the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement II.
Record Date. With respect to Payment Dates under the Indenture
(except a date for payment of defaulted interest), December 31 for January 15
Payment Dates and June 30 for July 15 Payment Dates, whether or not such date
is a Business Day.
Recourse Amount. Has the meaning specified in Section 17.10 of the
Participation Agreement.
Refinancing. A non-recourse loan to the Lessor arranged pursuant to
Section 15.01 of the Participation Agreement.
Register. Has the meaning set forth in Section 3.02 of the Indenture.
Registrar. Has the meaning set forth in Section 3.02 of the
Indenture.
Regulation D. Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N670FE, N671FE,
N672FE, N674FE, N583FE and N584FE, each dated as of May 1, 1997, between the
Owner Trustee and the Indenture Trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N581FE, dated as of May 1,
1997, between Wilmington Trust Company, as owner trustee and the Indenture
Trustee, and the Trust Indenture and Security Agreement for Federal Express
Corporation Trust No. N587FE, dated as of December 1, 1996, as amended and
restated as of May 1, 1997, between Wilmington Trust Company, as owner trustee
and the Indenture Trustee.
Remaining Weighted Average Life. On a given date with respect to any
Certificate the number of days equal to the quotient obtained by dividing (i)
the sum of each of the products obtained by multiplying (a) the amount of each
then remaining scheduled payment of principal of such Certificate by (b) the
number of days from and including such prepayment date to but excluding the
dates on which each such payment of principal is scheduled to be made; by (ii)
the then outstanding principal amount of such Certificate.
Renewal Rent. The amount payable by the Lessee as rent in accordance
with Section 4.01 of the Lease during any Renewal Term.
Renewal Term. One or more terms with respect to which the Lessee has
exercised its option to renew the Lease pursuant to Section 4.01(a) thereof.
Rent. All payments due from the Lessee under the Lease as Basic Rent,
Renewal Rent and Supplemental Rent, collectively.
Rent Payment Date. December 11, 2020 and each January 15 and July 15
commencing on January 15, 1998.
Reoptimization Date. Has the meaning specified in Section 15.02(a)
of the Participation Agreement.
Replacement Aircraft. Any aircraft substituted for the Aircraft
pursuant to Section 11.03(a) of the Lease.
Replacement Airframe. Has the meaning set forth in Section 11.03 of
the Lease.
Replacement Engine. A General Electric CF6-80C2-A5F engine (or an
engine of the same or another manufacturer) of equal or greater value,
airworthiness, remaining useful life and utility as the Engine being replaced,
together with all Parts relating to such engine; provided, however, that if
such replacement engine is not a General Electric CF6-80C2-A5F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on Airbus A300-600 airframes.
Responsible Officer. With respect to the Owner Trustee (except for
purposes of the Trust Agreement in which case the definition of Responsible
Officer set forth in Section 3.10 of the Trust Agreement is applicable) or the
Indenture Trustee, any officer in its Corporate Trust Administration, as the
case may be, designated by such Person to perform obligations under the
Operative Agreements, and with respect to any other party, any corporate
officer or (except in the case of the Owner Participant) other employee of a
party who, in the normal performance of his or her operational
responsibilities, with respect to the subject matter of any covenant,
agreement or obligation of such party pursuant to any Operative Agreement,
would have responsibility for and knowledge of such matter and the
requirements of any Operative Agreement with respect thereto.
S&P. Standard & Poor's Ratings Group.
Scheduled Delivery Date. The Delivery Date specified in the Delivery
Notice pursuant to Section 3.01 of the Participation Agreement.
SEC. The Securities and Exchange Commission of the United States and
any successor agencies or authorities.
Secured Obligations. Has the meaning specified in the Granting
Clause of the Indenture.
Securities Act. The Securities Act of 1933, as amended.
Series "A" or "Series A Certificates". Certificates issued and
designated as "Series A" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series A".
Series "B" or "Series B Certificates". Certificates issued and
designated as "Series B" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series B".
Series "C" or "Series C Certificates". Certificates issued and
designated as "Series C" under the Indenture, in the Principal Amount and
maturities and bearing interest as specified in Exhibit B to the Indenture
under the heading "Series C".
Series Supplement or Series Supplements. The Series Supplement
1997-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1997-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1997-1-C to be
executed and delivered by the Lessee and the Pass Through Trustee.
Sinking Fund Redemption Date. Has the meaning specified in Section
6.06 of the Indenture.
Sinking Fund Redemption Price. Has the meaning specified in Section
6.06 of the Indenture.
Special Aviation Counsel. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇.
Specified Investments. Shall mean (a) direct obligations of the
United States of America or obligations fully guaranteed by the United States
of America; (b) commercial paper rated A-1/P-1 by S&P and Moody's,
respectively or, if such ratings are unavailable, rated by any nationally
recognized rating organization in the United States equal to the highest
rating assigned by such rating organization; (c) investments in negotiable
certificates of deposit, time deposits, banker's acceptances, commercial paper
or other direct obligations of, or obligations guaranteed by, commercial banks
organized under the laws of the United States or of any political subdivision
thereof (or any U.S. branch of a foreign bank) with issuer ratings of at least
B/C by Thomson Bankwatch, having maturities no later than 90 days following
the date of such investment; (d) overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers; or
(e) overnight repurchase agreements with respect to the securities described
in clause (a) above entered into with an office of a bank or trust company
which is located in the United States of America or any bank or trust company
which is organized under the laws of the United States or any state thereof
and has capital, surplus and undivided profits aggregating at least $500
million.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association.
Stipulated Loss Value. As of any Stipulated Loss Value Determination
Date during the Basic Term, the amount determined by multiplying the Purchase
Price by the percentage set forth in Schedule III of the Lease under the
heading "Stipulated Loss Value Factor" opposite such date (as such Schedule
III may be adjusted from time to time as provided in Section 3.04 of the
Lease), and during any Renewal Term, the amount determined pursuant to Section
4.01(b) of the Lease. Notwithstanding any other provisions of the Lease or
the Participation Agreement or the Indenture, each Stipulated Loss Value for
the Aircraft shall be, under any circumstances and in any event, an amount,
together with so much of the arrears portion of Basic Rent due and owing
through the date of payment of Stipulated Loss Value as does not constitute an
Excepted Payment, at least sufficient to pay in full as of such date of
payment the aggregate unpaid principal amount of and accrued interest on the
Certificates outstanding on such date of payment. Subject to the immediately
preceding sentence, it is understood and agreed that the amounts set forth on
Schedule III of the Lease, for dates other than Rent Payment Dates on which
arrears Basic Rent is due, fully reflect appropriate Basic Rent accruals and
credits of unearned Basic Rent through such date and, accordingly, no further
accrual or credit shall be required through such date whenever Stipulated Loss
Value is to be calculated with reference to any such date; provided that if
amounts in respect of Stipulated Loss Value are payable under the Operative
Agreements after the Stipulated Loss Determination Date in respect of which
such Stipulated Loss Value was determined, the Lessor shall be compensated
during the period from the Stipulated Loss Determination Date to such payment
date in accordance with the provisions of the Operative Agreements.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease.
Subordination Agent. First Security Bank, National Association, a
national banking association, not in its individual capacity but solely as
Subordination Agent.
Supplemental Rent. (a) All amounts, liabilities and obligations
which the Lessee assumes or agrees to perform or pay under the Lease or under
the Participation Agreement or Tax Indemnity Agreement or any Ancillary
Agreement or any other Operative Agreement to the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, FPO Price and amounts calculated by reference to Termination Value, any
amounts of Make-Whole Premium payable under the Indenture to the extent
provided in Section 3.03 of the Lease, and all amounts required to be paid by
Lessee under the agreements, covenants and indemnities contained in the Lease
or in the Participation Agreement or the Tax Indemnity Agreement or any other
Operative Agreement, but excluding Basic Rent and (b) all amounts that the
Owner Trustee is obligated to pay in accordance with clause (b) of the last
paragraph of Section 2.04 of the Indenture.
Tax. Has the meaning set forth in Section 8.01(a) of the
Participation Agreement.
Tax Indemnity Agreement. The Tax Indemnity Agreement (Federal
Express Corporation Trust No. N673FE), dated as of May 1, 1997, between the
Lessee and the Owner Participant.
Term. The Basic Term of the lease for the Aircraft under the Lease
and, if renewed pursuant to Section 4.01 of the Lease, each Renewal Term for
the Aircraft for which the Lease is renewed, or such earlier date on which the
Lease is terminated pursuant to its terms.
Termination Date. A Rent Payment Date during the Basic Term that is
on or after December 31, 2004 in the case of Article 10 of the Lease, and in
the case of (i) Section 4.02(a)(A) of the Lease, the Rent Payment Date falling
on January 15, 2016, (ii) Section 4.02(a)(D) or (E) of the Lease, a Rent
Payment Date that is on or after the seventh anniversary of the Delivery Date
and (iii) Section 4.02(a)(F) of the Lease, the last day of the Basic Term.
Termination Value. As of any Termination Date, the amount determined
by multiplying the Purchase Price by the percentage set forth in Schedule IV
of the Lease under the heading "Termination Value Factor" opposite such
Termination Date (as such Schedule IV may be adjusted from time to time as
provided in Section 3.04 of the Lease). Notwithstanding any other provisions
of the Lease, the Participation Agreement or the Indenture, each Termination
Value shall be, under any circumstances and in any event, an amount, together
with so much of the arrears portion of Basic Rent due and owing through the
date of payment of any amount calculated by reference to Termination Value as
does not constitute an Excepted Payment, at least sufficient to pay in full as
of such date of payment the aggregate unpaid principal amount of and accrued
interest on the Certificates outstanding on such date of payment. Subject to
the immediately preceding sentence, it is understood and agreed that the
amounts set forth on Schedule IV of the Lease, for dates other than Rent
Payment Dates on which arrears Basic Rent is due, fully reflect appropriate
Basic Rent accruals and credits of unearned Basic Rent through such date and,
accordingly, no further accrual or credit shall be required through such date
whenever Termination Value is to be calculated with reference to any such
date; provided that if amounts in respect of Termination Value are payable
under the Operative Agreements after the Termination Date in respect of which
such Termination Value was determined, the Lessor shall be compensated during
the period from the Termination Date to such payment date in accordance with
the provisions of the Operative Agreements.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transportation Code. Title 49 of the United States Code, as amended
and in effect on the date of the Lease or as subsequently amended, or any
successor or substituted legislation at the time in effect and applicable, and
the regulations promulgated pursuant thereto.
Treasury Yield. At the time of determination with respect to any
Certificate, the interest rate (expressed as a semi-annual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semi-annual
yield to maturity for United States Treasury securities maturing on the
Average Life Date on such Certificate and trading in the public securities
markets either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in public securities markets, (i) one maturing as close as possible to,
but earlier than, the Average Life Date of such Certificate and (ii) the other
maturing as close as possible to, but later than, the Average Life Date of
such Certificate. In each case as published in the most recent H.15(519) or,
if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Certificate is reported on the most
recent H.15 (519), such weekly average yield to maturity as published in such
H.15(919). "H.15(519)" means the weekly statistical release designated as
such, or any successor publication, published by the Board of Governors of the
Federal Reserve System. The date of determination of a Make-Whole Premium
will be the third Business Day prior to the applicable prepayment date and the
"most recent H.15(519)" means the H.15(519) published prior to the close of
business on the third Business Day prior to the applicable prepayment date.
Trust Agreement. The Trust Agreement (Federal Express Corporation
Trust No. N673FE), dated as of May 1, 1997, between the Owner Participant and
the Owner Trustee in its individual capacity.
Trust Estate. The Lessor's Estate.
Trust Indenture Act. The Trust Indenture Act of 1939, as amended.
Trust Indenture Estate. All estate, right, title and interest of the
Indenture Trustee in and to any of the property, rights, interests and
privileges granted to the Indenture Trustee pursuant to the Granting Clause of
the Indenture, other than Excepted Payments and any and all other rights of
the Owner Trustee or the Owner Participant expressly reserved to the Owner
Trustee or the Owner Participant pursuant to the Indenture.
Underwriters. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, First Chicago
Capital Markets, Inc., ▇▇▇▇▇▇▇, Sachs & Co. and ▇.▇. ▇▇▇▇▇▇ & Co.
Underwriting Agreement. The Underwriting Agreement dated May 22, 1997
among the Lessee and the Underwriters.
United States, U.S. or US. The United States of America.
U.S. Air Carrier. Any United States air carrier as to which there is
in force a certificate issued pursuant to Section 41102(a) or Section 41103 of
the Transportation Code, and as to which there is in force an air carrier
operating certificate issued pursuant to Chapter 447 of the Transportation
Code and Part 121 of the regulations under such Transportation Code, for
aircraft capable of carrying ten (10) or more individuals or 6,000 pounds or
more of cargo, or which may operate as an air carrier by certification or
otherwise under any successor or substitute provision thereof or in absence
thereof.
U.S. Person. A Person described in Section 7701(a)(30) of the Code.
SCHEDULE III
PERMITTED COUNTRY LIST
Australia Luxembourg
Austria Netherlands
Belgium New Zealand
Canada Norway
Denmark Philippines
Finland Portugal
France Republic of China (Taiwan)
Germany Singapore
Greece Sweden
Iceland Switzerland
Ireland Thailand
Japan United Kingdom
SCHEDULE IV
DEBT PORTION
Debt Portion $61,813,000
------------
EXHIBIT A(1)(a)(i)
[Letterhead of Federal Express]
[Certificate Closing Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N673FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates will be
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision, (i)
executed counterparts of the Pass Through Agreement, the Series Supplements
and the Operative Agreements to be delivered on the Certificate Closing
Date (the "Certificate Closing Date Documents") and (ii) the forms of the
Operative Agreements to be delivered on the Delivery Date. We have relied
upon originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, documents and other instruments as
in our judgment are relevant to rendering the opinions expressed below. As
to any facts material to the opinions expressed below (other than any
thereof relating to Federal), we have relied upon the representations and
warranties made in the Certificate Closing Date Documents, the accuracy of
which we have not independently investigated or verified. In such
examination, we have assumed the genuineness of all signatures (other than
the signatures of Federal) and the authenticity of all documents submitted
to us as originals and the conformity with the originals of all documents
submitted to us as copies. We have also assumed that each of the parties
to each of the Certificate Closing Date Documents, other than Federal, has
full power, authority and legal right to enter into such Certificate
Closing Date Documents and that each such Certificate Closing Date Document
has been duly authorized, executed and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Certificate Closing Date Documents to which it is a party. Federal is duly
qualified to do business and is in good standing in the State of Tennessee
and each other state of the United States in which its operations or the
nature of its business requires Federal to so qualify, except where the
failure to so qualify would not have a material adverse impact on Federal
or its business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Certificate Closing Date Documents to which
Federal is a party has or had, on the date of execution thereof, been duly
authorized, executed and delivered by Federal and each constitutes the
legal, valid and binding obligation of Federal enforceable against Federal
in accordance with its terms. Each of the Certificate Closing Date
Documents to which Federal is to be a party and which are to be executed on
the Delivery Date has been duly authorized by Federal.
4. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which Federal is a party, nor the
consummation of any of the transactions by Federal contemplated thereby,
nor the performance of the obligations thereunder by Federal, did at the
time of execution and delivery, or does presently (a) require any
stockholder approval or violate the certificate of incorporation or by-laws
of Federal or (b) conflict with or contravene the provisions of, or
constitute a default under, or result in the creation of any Lien (other
than Liens permitted under Section 6.01(a) of the Lease) upon the property
of Federal under any law, governmental rule or regulation, or the charter
or bylaws of Federal or any order, writ, injunction or decree of any court
or governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Certificate Closing Date Documents to which it is a party, nor the
consummation of any transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did or does, as the
case may be, (a) require the consent or approval of, the giving of notice
to, or (except as described or contemplated in the Participation Agreement
and the Lease, all of which are required to be performed on or prior to the
Certificate Closing Date and which shall have been accomplished on or prior
to the Certificate Closing Date) the registration with, or the taking of
any other action in respect of, the Aeronautics Authority, the Securities
and Exchange Commission or any other authority or agency of the federal
government or of the State of Tennessee other than (i) the registration of
the issuance and sale of the Pass Through Certificates under the Securities
Act and (ii) compliance with the securities laws of each applicable state,
or (b) contravene any judgment or order applicable to or binding on Federal
or any law or governmental rule or regulation of the United States or of
the State of Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Certificate Closing Date Documents.
7. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
8. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
9. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Certificate Closing Date Documents to which Federal
is a party are based upon the assumption for purposes of such opinions and
without independent analysis that, notwithstanding the respective choice of
laws clauses in the Certificate Closing Date Documents, the governing law
with respect to each of the Certificate Closing Date Documents is identical
in all relevant respects to the law of the State of Tennessee. Insofar as
the foregoing opinion relates to the enforceability of any instrument, such
enforceability is subject to applicable bankruptcy, insolvency and other
similar laws affecting the enforcement of creditors' rights generally
(whether such enforceability is considered in a proceeding in equity or at
law). The enforceability of the remedies provided under the Lease may also
be limited by applicable laws which may affect the remedies provided
therein but which do not in my opinion affect the validity of the Lease or
make such remedies inadequate for the practical realization of the benefits
intended to be provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(a)(ii)
[Letterhead of Federal Express]
[Delivery Date]
To the Addressees Listed on Schedule A Attached
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
I am the Vice President - Law of Federal Express
Corporation, a Delaware corporation ("Federal"), and am familiar with the
transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N673FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security Bank, National Association,
not in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent, relating
to the Aircraft. This opinion is being delivered pursuant to Section
4.02(d)(i) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things,
for the financing on the Delivery Date of a portion of the Owner Trustee's
payment of the Purchase Price of one Airbus A300F4-605R aircraft (the
"Aircraft"), using the proceeds from the public offering of the Pass
Through Certificates. Three Classes of Pass Through Certificates were
issued by three Pass Through Trusts formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having
a particular Maturity that were issued under the Indenture, as supplemented
by the related Indenture and Security Agreement Supplement.
In connection with the opinions expressed below, I have
examined or caused to be examined by attorneys under my supervision,
executed counterparts of the Operative Agreements, the Pass Through
Agreement and each Series Supplement (the "Transaction Agreements"). We
have relied upon originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records, documents and other
instruments as in our judgment are relevant to rendering the opinions
expressed below. As to any facts material to the opinions expressed below
(other than any thereof relating to Federal), we have relied upon the
representations and warranties made in the Transaction Agreements, the
accuracy of which we have not independently investigated or verified. In
such examination, we have assumed the genuineness of all signatures (other
than the signatures of Federal) and the authenticity of all documents
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies. We have also assumed that each of the
parties to each of the Transaction Agreements, other than Federal, has full
power, authority and legal right to enter into such Transaction Agreements
and that each such Transaction Agreement has been duly authorized, executed
and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
1. Federal is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is a
"citizen of the United States" within the meaning of Section 40102(a)(15)
of the Transportation Code, and has or had, on the date of execution
thereof, the corporate power and authority to carry on its business as
currently conducted and to enter into and perform its obligations under the
Transaction Agreements to which it is a party. Federal is duly qualified
to do business and is in good standing in the State of Tennessee and each
other state of the United States in which its operations or the nature of
its business requires Federal to so qualify, except where the failure to so
qualify would not have a material adverse impact on Federal or its
business.
2. Federal possesses all necessary certificates,
franchises, licenses, permits, rights and concessions and consents which
are material to the operation of the routes flown by it and the conduct of
its business and operations as currently conducted, and each such
certificate, franchise, license, permit, right and concession and consent
is in full force and effect.
3. Each of the Transaction Agreements to which Federal is a
party has or had, on the date of execution thereof, been duly authorized,
executed and delivered by Federal and each constitutes the legal, valid and
binding obligation of Federal enforceable against Federal in accordance
with its terms.
4. Neither the execution and delivery by Federal of the
Transaction Agreements to which Federal is a party, nor the consummation of
any of the transactions by Federal contemplated thereby, nor the
performance of the obligations thereunder by Federal, did at the time of
execution and delivery, or does presently (a) require any stockholder
approval or violate the certificate of incorporation or by-laws of Federal
or (b) conflict with or contravene the provisions of, or constitute a
default under, or result in the creation of any Lien (other than Liens
permitted under Section 6.01(a) of the Lease) upon the property of Federal
under any law, governmental rule or regulation, or the charter or bylaws of
Federal or any order, writ, injunction or decree of any court or
governmental authority against Federal or by which any of its properties
may be bound or any indenture, mortgage, contract or other agreement known
to me to which Federal is a party or by which it may be bound or, require
the approval or consent of any trustee or the holders of any indebtedness
or obligations of Federal.
5. Neither the execution and delivery by Federal of the
Transaction Agreements to which it is a party, nor the consummation of any
transactions by Federal contemplated thereby, nor the performance of the
obligations thereunder by Federal, did or does, as the case may be, (a)
require the consent or approval of, the giving of notice to, or (except as
described or contemplated in the Participation Agreement and the Lease, all
of which were or are required to be performed on or prior to the Delivery
Date and which were or shall have been accomplished on or prior to the
Delivery Date) the registration with, or the taking of any other action in
respect of, the Aeronautics Authority, the Securities and Exchange
Commission or any other authority or agency of the federal government or of
the State of Tennessee other than (i) the registration of the issuance and
sale of the Pass Through Certificates under the Securities Act, (ii)
compliance with the securities laws of each applicable state and (iii) the
filings and recordings referred to in paragraph 7 below, or (b) contravene
any judgment or order applicable to or binding on Federal or any law or
governmental rule or regulation of the United States or of the State of
Tennessee.
6. There is no pending, or to my knowledge, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) (i) is expected to have a material adverse effect on (A) the
financial condition of Federal, except for the matters described (a) under
"Legal Proceedings" in Federal's Annual Report on Form 10-K for the fiscal
year ended May 31, 1996 (as updated by Note 7 to the financial statements
included in Federal's Quarterly Reports on Form 10-Q for the fiscal
quarters ended August 31, 1996, November 30, 1996 and February 28, 1997)
and (b) in Federal's Current Reports on Form 8-K dated June 7, 1996, August
16, 1996 and March 4, 1997, as to which I can express no opinion at this
time concerning Federal's liability (if any) or the effect of any adverse
determination upon the business, condition (financial or otherwise) or
operations of Federal or (B) the ability of Federal to perform its
obligations under the Transaction Agreements, or (ii) involves the
Aircraft.
7. Except for the registration in the Owner Trustee's name
of the Aircraft pursuant to the Transportation Code, and except for the
filing and, where appropriate, recording, pursuant to the Transportation
Code of (A) AVSA's FAA ▇▇▇▇ of Sale, (B) the Trust Agreement, (C) the
Lease (with the Lease Supplement covering the Aircraft, the Indenture and
the Indenture and Security Agreement Supplement covering the Aircraft
attached as exhibits) and (D) the Indenture (with the Indenture and
Security Agreement Supplement covering the Aircraft attached as an
exhibit), no further action, including any filing or recording of any
document is necessary or advisable in order to establish and perfect the
Owner Trustee's title to and interest in the Aircraft as against Federal
and any third parties, or to perfect the first mortgage lien on the
Aircraft in favor of the Indenture Trustee in each case with respect to
such portion of the Aircraft as is covered by the recording system
established by the Transportation Code.
8. Federal is a duly certificated "air carrier" within the
meaning of the Transportation Code, and a holder of a certificate under
Sections 41102(a) and 41103 of the Transportation Code, and an "air carrier
operating certificate" issued under Chapter 447 of the Transportation Code
for aircraft capable of carrying ten (10) or more individuals or 6,000
pounds or more of cargo, and each such certificate is in full force and
effect.
9. On the date hereof the Owner Trustee received good and
valid title to the Aircraft free and clear of all Liens on file with the
FAA, except for Liens permitted under Section 6.01(a) of the Lease.
10. Federal's principal place of business and chief
executive office (as such term is defined in the Uniform Commercial Code in
effect in the State of Tennessee) are located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
11. Federal is not, and is not directly or indirectly
controlled by or acting on behalf of any Person which is, an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
The opinions expressed in paragraph 3 above as to the
enforceability of the Transaction Agreements to which Federal is a party
are based upon the assumption for purposes of such opinions and without
independent analysis that, notwithstanding the respective choice of laws
clauses in the Transaction Agreements, the governing law with respect to
each of the Transaction Agreements is identical in all relevant respects to
the law of the State of Tennessee. Insofar as the foregoing opinion
relates to the enforceability of any instrument, such enforceability is
subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally (whether such
enforceability is considered in a proceeding in equity or at law). The
enforceability of the remedies provided under the Lease may also be limited
by applicable laws which may affect the remedies provided therein but which
do not in my opinion affect the validity of the Lease or make such remedies
inadequate for the practical realization of the benefits intended to be
provided thereby.
I do not express any opinion as to matters governed by any
law other than the Federal laws of the United States of America, the
corporation law of the State of Delaware and the laws of the State of
Tennessee.
As to the matters referred to in paragraphs 5, 7 and 9, I
have relied on the opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ of even date
herewith, to the extent such matters are addressed in such counsel's
opinion and subject to the assumptions and qualifications expressed
therein.
This opinion is delivered to you solely for your use in
connection with the transaction described herein, and may not be used for
any other purpose, and may not be relied upon by any other person, without
my prior written consent.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SCHEDULE A
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(i)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N673FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as Owner Trustee, and First Security Bank, National
Association, not in its individual capacity, except as otherwise stated, but
solely as Indenture Trustee, Pass Through Trustee and Subordination Agent,
relating to the Aircraft. This opinion is being delivered pursuant to Section
4.01(k)(v) of the Participation Agreement. Capitalized terms not otherwise
defined herein have the meanings assigned thereto in the Participation
Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of a portion of the Owner Trustee's payment
of the Purchase Price of one Airbus A300F4-605R Aircraft using the proceeds
from the public offering of the Pass Through Certificates. On the Certificate
Closing Date, three Classes of Pass Through Certificates will be issued by
separate Pass Through Trusts, each formed to acquire, among other securities,
the Certificates bearing a particular interest rate and having a particular
Maturity that will be issued under the Indenture.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Certificate Closing Date Documents") and the forms of the Operative
Agreements to be delivered on the Delivery Date. We have also examined
originals, or copies certified to our satisfaction, of such other agreements,
documents, certificates and statements of governmental officials and corporate
officers as we have deemed necessary or advisable as a basis for such
opinions. In such examination, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. Assuming (i) the due authorization, execution and
delivery of the Certificate Closing Date Documents by each of the parties
to each such document (other than Federal Express), (ii) each such party
has full power and legal right to enter into and perform its respective
obligations under the Certificate Closing Date Documents, (iii) that the
execution, delivery and performance of each of the Certificate Closing Date
Documents by each of the parties thereto will not violate the respective
parties' constituent documents, (iv) the due authorization, execution,
issuance and delivery by the Owner Trustee, and the due authentication by
the Indenture Trustee, of the Certificates to be issued under the Indenture
in accordance with the terms of the Indenture, (v) the due authorization,
execution, issuance, delivery and authentication by the Pass Through
Trustee of the Pass Through Certificates to be issued under the Pass
Through Agreement and the Series Supplement relating to such Pass Through
Certificates, in each case in accordance with the terms of the Pass Through
Agreement and such Series Supplement, and (vi) that the form of each
Certificate Closing Date Document is in compliance with all applicable laws
and governmental rules and regulations (other than the laws of the United
States and the State of New York), then: (A) to the extent governed by New
York law, each Certificate Closing Date Document in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create, except that no opinion is
given with respect to perfection of such security interest on the date
hereof; (C) the Certificates, when issued to and acquired by the Pass
Through Trustee, will be legal, valid and binding obligations of the Owner
Trustee enforceable against the Owner Trustee in accordance with their
terms and the terms of the Indenture and will be entitled to the benefits
of the Indenture, including the benefit of the security interest created
thereby, except that no opinion is given with respect to perfection of such
security interest on the date hereof; (D) the Pass Through Certificates,
when issued to and acquired by the Underwriters in accordance with the
Underwriting Agreement, will be legal, valid and binding obligations of the
Pass Through Trustee enforceable against the Pass Through Trustee in
accordance with their terms and will be entitled to the benefits of the
Pass Through Agreement and the Series Supplement relating thereto; and (E)
the beneficial interest of the Owner Participant under the Trust Agreement
in and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, to the Lien of the
Indenture in favor of the Holders.
2. (a) Each of the Certificate Closing Date Documents to
which Federal Express is a party has been duly authorized, executed and
delivered by Federal Express. Each of the Operative Agreements to which
Federal Express is to be a party and which are to be delivered on the
Delivery Date has been authorized by Federal Express.
(b) The execution, delivery and performance by Federal
Express of each of the Certificate Closing Date Documents to which Federal
Express is a party do not, or did not on the date of execution thereof,
violate, and fully comply, or did fully comply on the date of execution
thereof, with, any laws and governmental rules and regulations of the State
of New York that may be applicable to Federal Express. The opinion set
forth in this paragraph 2(b) is rendered without regard to the taking of
any action or the conduct of any other business by Federal Express in the
State of New York other than the transactions contemplated by the
Certificate Closing Date Documents.
3. The execution, delivery and performance of the
Certificate Closing Date Documents (other than the Certificates) by the
Owner Trustee in its individual or trust capacity, as the case may be, and
the issuance, execution, delivery and performance of the Certificates by
the Owner Trustee in its trust capacity do not violate, and fully comply
with, any laws and governmental rules and regulations of the State of New
York that may be applicable to the Owner Trustee in its individual or trust
capacity, as the case may be. The opinion set forth in this paragraph 3 is
rendered without regard to the effect, if any, on such issuance (in the
case of the Certificates), execution, delivery or performance, of the
taking of any action, the conduct of any business or the exercise of any
other powers by State Street Bank and Trust Company of Connecticut,
National Association in its individual or trust capacity in the State of
New York not related to the transactions contemplated by the Certificate
Closing Date Documents. We have assumed that State Street Bank and Trust
Company of Connecticut, National Association has made the filings necessary
to comply with Section 131.3 of the Banking Law of the State of New York,
however we express no opinion as to whether State Street Bank and Trust
Company of Connecticut, National Association is required to comply with
said Section 131.3.
4. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinion of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Vice President - Law of Federal Express to be delivered to
you and dated the date hereof, for purposes of the matters covered
thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware.
(c) The opinion contained in paragraph 1(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(1)(b)(ii)
[Letterhead of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We have acted as special counsel for Federal Express
Corporation, a Delaware corporation ("Federal Express"), in connection with
the transactions contemplated by the Participation Agreement (Federal Express
Corporation Trust No. N673FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity but solely as Owner
Trustee, and First Security Bank, National Association, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent, relating to the Aircraft. This
opinion is being delivered pursuant to Section 4.02(d)(ii) of the
Participation Agreement. Capitalized terms not otherwise defined herein have
the meanings assigned thereto in the Participation Agreement.
The Participation Agreement provides, among other things, for
the financing on the Delivery Date of the Owner Trustee's payment of a portion
of the Purchase Price of one Airbus A300F4-605R Aircraft (the "Aircraft") using
the proceeds from the public offering of the Pass Through Certificates. On the
Certificate Closing Date, three Classes of Pass Through Certificates were
issued by separate Pass Through Trusts, each formed to acquire, among other
securities, the Certificates bearing a particular interest rate and having a
particular Maturity issued under the Indenture. The Aircraft is to be leased
to Federal Express by the Owner Trustee pursuant to the Lease and subjected to
the Lien of the Indenture, and is to be delivered by the Owner Trustee to the
Lessee on this date, and in connection with the delivery of the Aircraft, the
Owner Trustee and Federal Express will execute and deliver the Lease
Supplement, and the Owner Trustee will execute and deliver the Indenture and
Security Agreement Supplement.
In connection with the opinions expressed below, we have
examined executed counterparts of the Operative Agreements, the Pass Through
Certificates, the Pass Through Agreement and each Series Supplement (the
"Transaction Agreements"). We have also examined originals, or copies
certified to our satisfaction, of such other agreements, documents,
certificates and statements of governmental officials and corporate officers
as we have deemed necessary or advisable as a basis for such opinions. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies.
As to any facts material to our opinions expressed below, we
have, with your consent, relied on the representations and warranties made in
or pursuant to the Participation Agreement and the other documents referred to
therein, the accuracy of which we have not independently verified. In
addition, we have, when relevant facts were not independently established by
us, relied, to the extent we deemed such reliance proper, upon certificates of
public officials and certificates, telegrams and other written or telephoned
statements of officers of the parties referred to herein.
Based on the foregoing, it is our opinion that:
1. With respect to that portion, if any, of the Aircraft
and the other property included in the Lessor's Estate as may not be
covered by the recording system established by the FAA pursuant to Section
44107 of the Transportation Code, no filing or recording of any document or
other action was or is necessary in order to establish the Owner Trustee's
title thereto and interest therein as against Federal Express and any third
parties.
2. Subject to execution and delivery of the Lease
Supplement and the Indenture and Security Agreement Supplement for the
Aircraft and to the registration of the Aircraft with the FAA in the name
of the Owner Trustee, the Lease, as supplemented, will create a valid
leasehold interest in the Aircraft, the entitlement thereof to the benefits
of recordation under the Transportation Code being subject to the due and
timely filing and, where appropriate, recording of (A) AVSA's FAA ▇▇▇▇ of
Sale, (B) the Trust Agreement, (C) the Lease (with the Lease Supplement
covering the Aircraft, the Indenture and the Indenture and Security
Agreement Supplement covering the Aircraft attached as exhibits) and (D)
the Indenture (with the Indenture and Security Agreement Supplement
covering the Aircraft attached as an exhibit), pursuant to the
Transportation Code, and assuming that at the time of such filing no other
documents relating to the Aircraft have been filed pursuant to the
Transportation Code.
3. Assuming (i) the due authorization, execution and
delivery of the Transaction Agreements by each of the parties to each such
document (other than Federal Express), (ii) each such party has full power
and legal right to enter into and perform its respective obligations under
the Transaction Agreements, (iii) that the execution, delivery and
performance of each of the Transaction Agreements by each of the parties
thereto will not violate the respective parties' constituent documents,
(iv) the due authorization, execution, issuance and delivery by the Owner
Trustee, and the due authentication by the Indenture Trustee, of the
Certificates issued under the Indenture in accordance with the terms of the
Indenture, (v) the due authorization, execution, issuance, delivery and
authentication by the Pass Through Trustee of the Pass Through Certificates
issued under the Pass Through Agreement and the Series Supplement relating
to such Pass Through Certificates, in each case in accordance with the
terms of the Pass Through Agreement and such Series Supplement, and (vi)
that the form of each Transaction Agreement is in compliance with all
applicable laws and governmental rules and regulations (other than the laws
of the United States and the State of New York), then: (A) to the extent
governed by New York law, each Transaction Agreement in form constitutes a
legal, valid and binding agreement of each party thereto enforceable
against each such party in accordance with its terms; (B) the Indenture
creates, for the benefit of the Holders, the security interest in the Trust
Indenture Estate that it purports to create; (C) the Certificates are
legal, valid and binding obligations of the Owner Trustee enforceable
against the Owner Trustee in accordance with their terms and the terms of
the Indenture and are entitled to the benefits of the Indenture, including
the benefit of the security interest created thereby; and (D) the
beneficial interest of the Owner Participant under the Trust Agreement in
and to the properties which are part of the Trust Indenture Estate is
subject, to the extent provided in the Indenture, as supplemented by the
Indenture and Security Agreement Supplement, to the Lien of the Indenture
in favor of the Holders. The opinions set forth in this paragraph 3 are
subject to the due filing and recording, where appropriate, with the FAA of
the documents referred to in paragraph 2 above.
4. (a) Each of the Transaction Agreements to which Federal
Express is a party has been duly authorized, executed and delivered by Federal
Express.
(b) The execution, delivery and performance by Federal Express
of each of the Transaction Agreements to which Federal Express is a party do
not, or did not on the date of execution thereof, violate, and fully comply,
or did fully comply on the date of execution thereof, with, any laws and
governmental rules and regulations of the State of New York that may be
applicable to Federal Express. The opinion set forth in this paragraph 4(b)
is rendered without regard to the taking of any action or the conduct of any
other business by Federal Express in the State of New York other than the
transactions contemplated by the Transaction Agreements.
5. The execution, delivery and performance of the
Transaction Agreements (other than the Certificates) by the Owner Trustee
in its individual or trust capacity, as the case may be, and the issuance,
execution, delivery and performance of the Certificates by the Owner
Trustee in its trust capacity do not violate, and fully comply with, any
laws and governmental rules and regulations of the State of New York that
may be applicable to the Owner Trustee in its individual or trust capacity,
as the case may be. The opinion set forth in this paragraph 5 is rendered
without regard to the effect, if any, on such issuance (in the case of the
Certificates), execution, delivery or performance, of the taking of any
action, the conduct of any business or the exercise of any other powers by
State Street Bank and Trust Company of Connecticut, National Association in
its individual or trust capacity in the State of New York not related to
the transactions contemplated by the Transaction Agreements. We have
assumed that State Street Bank and Trust Company of Connecticut, National
Association has made the filings necessary to comply with Section 131.3 of
the Banking Law of the State of New York, however we express no opinion as
to whether State Street Bank and Trust Company of Connecticut, National
Association is required to comply with said Section 131.3.
6. All the properties which are part of the Trust Indenture
Estate (including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture in and to the Aircraft and the
Lease) have been pledged and mortgaged with the Indenture Trustee as part of
the Trust Indenture Estate (subject to the due filing and, where appropriate,
recording of those documents referred to in paragraph 2 above and the
financing statement referred to in Section 4.02(f) of the Participation
Agreement), and the beneficial interest of the Owner Participant under the
Trust Agreement in and to such properties are subject, to the extent provided
in the Indenture, to the Lien of the Indenture in favor of the Holders of the
Certificates issued and to be issued under the Indenture.
7. The Indenture and Security Agreement Supplement, pursuant
to the Granting Clause of the Indenture, creates, as security for the
Certificates duly issued and to be issued under the Indenture, the first
priority security interest in the Aircraft it purports to create, the
perfection and rank thereof being subject to the registration with the FAA of
the Aircraft in the name of the Owner Trustee and the due filing and, where
appropriate, recording in accordance with the Transportation Code of the
documents referred to in paragraph 2 above. We express no opinion with
respect to the status of any security interest in any portion of the Aircraft
which does not constitute an "aircraft" or "aircraft engine", as defined in
paragraphs (6) and (7) of Section 40102(a) of the Transportation Code.
8. Except for (i) the filings and recordings referred to in
paragraph 2 above, (ii) the registration of the issuance and sale of the
Pass Through Certificates under the Securities Act and (iii) compliance
with the securities laws of each applicable state, neither the execution
and delivery by Federal Express of the Participation Agreement or any other
Operative Agreement to which it is a party, nor the consummation of any of
the transactions by Federal Express contemplated thereby, requires the
consent or approval of, the giving of notice to, or the registration with,
or the taking of any other action in respect of, the Department of
Transportation, the FAA, the Securities and Exchange Commission or any
other Federal or New York State governmental authority.
9. It is not necessary, in connection with the creation of
the beneficial interest of the Owner Participant in the Trust Indenture Estate
under the circumstances contemplated by the Participation Agreement to
register such beneficial interest under the Securities Act of 1933, as
amended, or to qualify the Trust Agreement under the Trust Indenture Act of
1939, as amended.
10. The provisions of Section 1110 of the United States
Bankruptcy Code will apply to the Aircraft for the benefit of the Lessor,
as lessor under and by reason of the Lease. The Lease, including the
rights under Section 1110 of the United States Bankruptcy Code, has been
assigned to the Indenture Trustee pursuant to the Indenture as part of the
collateral for the Certificates and, as assignee, the Indenture Trustee has
the benefit of Section 1110.
The foregoing opinions are subject to the following
qualifications:
(a) We have relied, with your consent, without independent
investigation and verification and subject to the assumptions and
qualifications contained therein, upon the opinions of ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Peregrin and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President - Law of
Federal Express to be delivered to you and dated the date hereof, for
purposes of the matters covered thereby.
(b) We are qualified to practice law in the State of New York,
and we do not purport to be experts on, or to express any opinion
herein concerning, any laws other than the laws of the State of New
York, the laws of the United States and the General Corporation Law
of the State of Delaware. We express no opinion as to any matters
involving aviation law.
(c) The opinion contained in paragraph 3(A) above as to
enforceability is subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) general principles of equity
which may affect the remedies provided in the agreements referred to
in said opinions, which laws and principles, however, do not in our
opinion make the remedies provided in said agreements inadequate for
the practical realization of the benefits of the security intended to
be provided thereby.
(d) This opinion is rendered solely to you at Federal
Express's request in connection with the above matter. This
opinion may not be relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(a)
[Letterhead of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We have acted as special New York counsel for (i) PMCC Leasing
Corporation ("PMCC") in connection with the transactions contemplated by the
Participation Agreement (Federal Express Corporation Trust No. N673FE), dated
as of May 1, 1997 (the "Participation Agreement"), among Federal Express
Corporation, as lessee, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as otherwise
stated, but solely as owner trustee, PMCC, as owner participant, and First
Security Bank, National Association, not in its individual capacity, except as
otherwise stated, but solely as indenture trustee, pass through trustee and
subordination agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation ("▇▇▇▇▇▇
▇▇▇▇▇▇") in connection with the transactions contemplated by the Owner
Participant Guaranty (the "Guaranty"), dated as of May 1, 1997 from ▇▇▇▇▇▇
▇▇▇▇▇▇ to each of the beneficiaries named therein. This opinion is being
furnished to you pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Participation Agreement.
We have examined executed counterparts of the Participation
Agreement, the Trust Agreement, the Tax Indemnity Agreement, the Ancillary
Agreement I and the Ancillary Agreement II (collectively, the "Owner
Participant Documents") and the Guaranty. We have made such other and further
investigations as we have deemed necessary or appropriate for purposes of this
opinion. In our examination we have assumed, with your permission, and
without independent investigation or inquiry, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as
certified or photocopies and the authenticity of the originals of such latter
documents.
With your permission, we have further assumed that (i) the
Owner Participant Documents and the Guaranty have been duly authorized,
executed and delivered by each of the parties thereto, (ii) the respective
parties thereto have the power and authority to execute, deliver and
perform the Owner Participant Documents and the Guaranty, (iii) the
execution, delivery and performance of the Owner Participant Documents and
the Guaranty by the parties thereto do not and will not violate the
certificate of incorporation, by-laws or other organizations documents of
any such party or any bond, debenture, note, mortgage, indenture, lease or
other agreement or instrument to which any such party is a party or by
which any such party is bound and does and will fully comply with all laws
an regulations applicable to each such party and (iv) the Owner Participant
Documents constitute valid, legal and binding obligations of the parties
thereto (other than PMCC), enforceable against such parties (other than
PMCC) in accordance with their respective terms.
Based upon the foregoing, we are of the opinion that:
1. The Participation Agreement and the Tax Indemnity Agreement
constitute valid and legally binding obligations of PMCC enforceable against
PMCC in accordance with their respective terms.
2. The Guaranty constitutes a valid and legally binding obligation
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ enforceable against ▇▇▇▇▇▇ ▇▇▇▇▇▇ in accordance with its
terms.
3. The execution, delivery and performance by PMCC of the Owner
Participant Documents will not result in any violation of any Federal or New
York statute or any order, rule or regulation issued pursuant to any New York
or Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over PMCC.
4. The execution, delivery and performance by ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
the Guaranty will not result in any violation of any Federal or New York
statute or any order, rule or regulation issued pursuant to any New York or
Federal statute by any New York or Federal Court or governmental agency or
body having jurisdiction over ▇▇▇▇▇▇ ▇▇▇▇▇▇.
5. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by PMCC for the execution, delivery and performance by PMCC of the
Owner Participant Documents.
6. No consent, approval, authorization, order, registration,
filing or qualification under any Federal or New York statute is required to
be obtained by ▇▇▇▇▇▇ ▇▇▇▇▇▇ for the execution, delivery and performance by
▇▇▇▇▇▇ ▇▇▇▇▇▇ of the Guaranty.
Our opinions in paragraphs 1 and 2 are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
We are members of the Bar of the State of New York and express
no opinion herein concerning any law other than the laws of the State of New
York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied by you for any
other purpose, or relied upon by or furnished to any other person, firm or
corporation without our prior written consent, except that the Owner
Participant may furnish a copy of this opinion to a potential transferee or
participant of the interest of such entity or otherwise as required by a
governmental authority.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(2)(b)
[Letterhead of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
In my capacity as Assistant General Counsel and Assistant
Secretary of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware corporation, I have
supervised corporate proceedings of (i) PMCC Leasing Corporation, a Delaware
corporation (the "Owner Participant"), in connection with the Owner
Participant's participation in the transactions contemplated by that certain
Participation Agreement (Federal Express Corporation Trust No. N673FE), dated
as of May 1, 1997 (the "Participation Agreement"), among the Owner
Participant, Federal Express Corporation, as Lessee; State Street Bank and
Trust Company of Connecticut, National Association, except as otherwise
stated, not in its individual capacity but solely as Owner Trustee; and First
Security Bank, National Association not in its individual capacity, except as
otherwise stated, but solely as Indenture Trustee, Pass Through Trustee and
Subordination Agent, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Corporation, a Delaware
corporation (the "Guarantor"), in connection with the transactions
contemplated by the Owner Participant Guaranty (the "Guaranty"), dated as of
May 1, 1997 from ▇▇▇▇▇▇ ▇▇▇▇▇▇ to each of the beneficiaries named therein.
This opinion is delivered pursuant to Section 4.01(k)(ii) of the Participation
Agreement. Capitalized terms used herein but not otherwise defined herein,
shall have the respective meanings set forth in the Participation Agreement.
In connection with this opinion, I have examined originals,
or copies certified or otherwise identified to my satisfaction of the
Participation Agreement, the Trust Agreement, the Tax Indemnity Agreement,
the Ancillary Agreement I and the Ancillary Agreement II (each such
document to be hereafter referred to individually as an "Owner Participant
Document" and collectively as the "Owner Participant Documents") and the
Guaranty. I have also examined such corporate documents, records and
instruments of the Owner Participant and the Guarantor as in my judgement
are necessary or appropriate to enable me to render the opinions expressed
below. In rendering such opinions, I have relied upon the representations
and warranties contained in or made pursuant to the Owner Participant
Documents and the Guaranty and have assumed the due authorization,
execution and delivery of all documents and instruments by all parties
thereto other than the Owner Participant.
Based on the foregoing and subject to the qualifications and
matters of reliance set forth herein, I am of the opinion that:
1. The Owner Participant is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Owner Participant Documents and
to fulfill and comply with the terms, conditions and other provisions
thereof.
2. The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, has full corporate power, authority and legal right to
carry on its business as now conducted, and is duly authorized and
empowered to execute and deliver the Guaranty and to fulfill and
comply with the terms, conditions and other provisions thereof.
3. The Owner Participant Documents have been duly authorized
by all necessary corporate action on the part of the Owner
Participant, and have been duly executed and delivered by the Owner
Participant.
4. The Guaranty has been duly authorized by all necessary
corporate action on the part of the Guarantor, and has been duly
executed and delivered by the Guarantor.
5. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the Owner
Participant of the Owner Participant Documents.
6. No filing with, notice to, or authorization or approval
from any governmental or public body or authority is required under
the laws of the State of New York, the laws of the United States of
America, or the General Corporation Law of the State of Delaware in
connection with the execution, delivery and performance by the
Guarantor of the Guaranty.
7. There are no actions, suits or proceedings (whether or not
purportedly on behalf of the Owner Participant) pending or, to my
knowledge, threatened against or affecting the Owner Participant or
any property rights of the Owner Participant at law or in equity or
before any commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Owner
Participant or its ability to perform its obligations under the Owner
Participant Documents or which would affect the legality, validity or
enforceability of such Owner Participant Documents.
8. There are no actions, suits or proceedings (whether or
not purportedly on behalf of the Guarantor) pending or, to my
knowledge, threatened against or affecting the Guarantor or any
property rights of the Guarantor at law or in equity or before any
commission or other administrative agency which, either
individually or in the aggregate, could materially and adversely
affect the condition, financial or otherwise, of the Guarantor or
its ability to perform its obligations under the Guaranty or which
would affect the legality, validity or enforceability of such
Guaranty.
9. Neither the execution and delivery of the Owner Participant
Documents, the consummation of the transactions therein contemplated
nor the fulfillment of or compliance with the terms, conditions and
other provisions thereof will conflict with, or result in any breach
of, any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Owner Participant, (ii) any order,
injunction or decree of any court or governmental instrumentality
binding upon the Owner Participant, (iii) the Certificate of
Incorporation or Bylaws of the Owner Participant, or (iv) any bond,
debenture, note, mortgage indenture or other agreement or instrument
to which the Owner Participant is now a party or by which the
property of the Owner Participant may be bound.
10. Neither the execution and delivery of the Guaranty, the
consummation of the transactions therein contemplated nor the
fulfillment of or compliance with the terms, conditions and other
provisions thereof will conflict with, or result in any breach of,
any of the terms, conditions or provisions of (i) any law or
regulation binding upon the Guarantor, (ii) any order, injunction or
decree of any court or governmental instrumentality binding upon the
Guarantor, (iii) the Certificate of Incorporation or Bylaws of the
Guarantor, or (iv) any bond, debenture, note, mortgage indenture or
other agreement or instrument to which the Guarantor is now a party
or by which the property of the Guarantor may be bound.
I am a member of the bar of the State of New York, and I do
not purport to be conversant with, or to express any opinion herein
concerning, the laws of any jurisdiction other than those of the State of
New York and the United States of America and the General Corporation Law
of the State of Delaware. In addition, I express no opinion concerning the
laws of the State of New York, the United States of America or any other
jurisdiction applicable to the offering or sale of securities. Further, I
have made no investigation and express no opinion, as to any aviation law
or other laws, statutes, rules or regulations applicable due to the
particular nature of the equipment subject to the Lease.
This opinion is solely for the benefit of the addresses hereof
and their respective successors and assigns for use in connection with the
transactions contemplated by the Owner Participant Documents and may not be
relied upon by any other person or for any other purpose without my express
written consent. This opinion may be relied upon by Messrs. Simpson, Thacher
& ▇▇▇▇▇▇▇▇ in rendering their opinion of even date herewith.
Very truly yours,
▇▇▇▇▇ ▇. Rights
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(3)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Participation Agreement (Federal Express Corporation
Trust No. N673FE), dated as of May 1, 1997 (the "Participation
Agreement"), among Federal Express Corporation, as Lessee, PMCC Leasing
Corporation, as Owner Participant, State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee, and First Security, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee, Pass Through Trustee and Subordination Agent. Pursuant
to the Participation Agreement, one Airbus A300F4-605R aircraft bearing
U.S. Registration No. N673FE (the "Aircraft") is being financed. This
opinion is furnished pursuant to Section 4.01(k)(iv) of the Participation
Agreement. Capitalized terms used herein and not otherwise defined are
used as defined in the Participation Agreement, except that references
herein to any instrument shall mean such instrument as in effect on the
date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Participation Agreement;
(b) The Indenture;
(c) The Ancillary Agreement I;
(d) The Ancillary Agreement II:
(e) The Collateral Account Control Agreement;
(f) The Certificates; and
(g) The French Pledge Agreement;
(each of the documents identified in paragraphs (a) through (g) above are
collectively referred to as the "Indenture Trustee Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Indenture
Trustee Documents.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers, and each of First
Security and the Indenture Trustee, as the case may be, has or had,
on the date of execution thereof, full corporate power, authority and
legal right to execute, deliver and perform each of the Indenture
Trustee Documents to which it is or is to be a party and to
authenticate the Certificates delivered on the Certificate Closing
Date.
2. Each of First Security and the Indenture Trustee, as the
case may be, has duly authorized, executed and delivered each
Indenture Trustee Document to which it is a party; each such document
constitutes a legal, valid and binding obligation of the Indenture
Trustee (and, to the extent set forth in the respective Indenture
Trustee Document, of First Security) enforceable against the
Indenture Trustee (and, to the extent set forth in the respective
Indenture Trustee Document, against First Security) in accordance
with its terms.
3. The Certificates issued and dated the Certificate Closing
Date have been duly authenticated and delivered by the Indenture
Trustee pursuant to the terms of the Indenture.
4. Neither the authorization, execution and delivery by the
Indenture Trustee or First Security, as the case may be, of the
Indenture Trustee Documents, nor the authentication and delivery by
the Indenture Trustee of the Certificates nor the fulfillment or
compliance by the Indenture Trustee or First Security with the
respective terms and provisions thereof nor the consummation of any
of the transactions by the Indenture Trustee or First Security, as
the case may be, contemplated thereby, requires the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any court or administrative
or governmental authority or agency of the State of Utah or the
United States of America governing the banking or trust powers of
First Security.
5. The execution, delivery and performance by the Indenture
Trustee or First Security, as the case may be, of each of the
Indenture Trustee Documents and the authentication and delivery of
the Certificates by the Indenture Trustee are not in violation of the
charter or by-laws of First Security or of any law, governmental
rule, or regulation of the State of Utah or the United States of
America governing the banking or trust powers of First Security or,
to our knowledge, of any indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term lease, license or other
agreement or instrument to which it is a party or by which it is
bound or, to our knowledge, of any judgment or order of the State of
Utah or the United States of America relating to the banking or trust
powers of First Security.
6. There are no fees, taxes or other governmental charges
payable by the Owner Trustee, the Indenture Trustee (except taxes
imposed on fees payable to First Security) or the Certificate Holders
to the State of Utah or any political subdivision thereof in
connection with the execution, delivery or performance of any of the
Operative Agreements or in connection with the issuance and
acquisition of the Certificates by the Certificate Holders or the
beneficial interests of the Certificate Holders in the Trust
Indenture Estate solely because First Security) (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. Neither the
Indenture Trustee nor the trust created under the Indenture will be
subject to any fee, tax or other governmental charge (except for
taxes imposed on fees payable to First Security) under the laws of
the State of Utah or any political subdivision thereof in existence
on the date hereof, on, based on or measured by, directly or
indirectly, the gross receipts, net income or value of the Trust
Indenture Estate solely because First Security (a) is incorporated
under the laws of the State of Utah, (b) has its principal place of
business in the State of Utah, (c) performs (in its individual
capacity or as Indenture Trustee) any or all of its duties under the
Indenture Trustee Documents in the State of Utah, and (d) engages in
any activities unrelated to the transactions contemplated by the
Indenture Trustee Documents in the State of Utah. There is no fee,
tax or other governmental charge (except for taxes imposed on fees
payable to First Security) under the laws of the State of Utah or any
political subdivision thereof in existence on the date hereof, on,
based on or measured by any payments under the Certificates by reason
of the creation of the trust under the Indenture solely because First
Security (a) is incorporated under the laws of the State of Utah, (b)
has its principal place of business in the State of Utah, (c)
performs (in its individual capacity or as Indenture Trustee) any or
all of its duties under the Indenture Trustee Documents in the State
of Utah, and (d) engages in any activities unrelated to the
transactions contemplated by the Indenture Trustee Documents in the
State of Utah. We express no opinion as to whether or not any fees,
taxes or other charges are now or hereafter may be payable by the
Owner Participant to the State of Utah or any political subdivision
thereof in connection with (a) the execution, delivery or performance
by any of the Indenture, the Participation Agreement or any of the
other Operative Agreements and (b) the making by the Owner
Participant of its investment in the Aircraft.
7. There are no actions, suits, investigations or proceedings
pending or, to our knowledge, threatened against or affecting First
Security or the Indenture Trustee, as the case may be, or any of its
properties in any court or before any administrative agency or
arbitrator, which, if adversely determined, would materially
adversely affect the ability of First Security or the Indenture
Trustee, as the case may be, to perform its obligations under any of
the Indenture Trustee Documents, and there are no pending or, to our
knowledge, threatened actions or proceedings before any court,
administrative agency or tribunal involving First Security or the
Indenture Trustee, as the case may be, in connection with the
transactions contemplated by any of the Indenture Trustee Documents.
The foregoing opinions are subject to the following
assumptions, exceptions and qualifications:
A. We are admitted to practice law in the State of Utah and we
do not hold ourselves out as being experts on the laws of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Utah, the federal laws of the United States of America governing the banking
and trust powers of First Security and Title II of the United States Code
entitled "Bankruptcy". However, we express no opinion with respect to (i)
federal securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) the Federal Aviation Act of 1958, as amended and (iii)
state securities or blue sky laws. Insofar as the foregoing opinions relate
to the validity and enforceability in the State of Utah of the Certificates
and the other Indenture Trustee Documents expressed to be governed by the laws
of the State of New York, we have assumed that the laws of New York are
identical to the laws of Utah in all material respects, and that the
Certificates and such Indenture Trustee Documents constitute legal, valid,
binding and enforceable documents or instruments under such laws (as to which
we express no opinion). No opinion is expressed as to the priority of any
security interest or as to title to any part of the Trust Estate.
B. The foregoing opinions regarding enforceability of any
document or instrument, are subject to (i) applicable bankruptcy, insolvency,
moratorium, reorganization, receivership and similar laws affecting the rights
and remedies of creditors generally, and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
C. We have assumed the due authorization, execution and
delivery by each of the parties thereto, other than First Security and the
Indenture Trustee, of the Indenture Trustee Documents to which each is a party
and that each of such parties has the full power, authority and legal right to
execute and deliver each such document.
D. We have assumed that all signatures (other than those of
the Indenture Trustee or First Security) on documents and instruments
examined by us are genuine, that all documents and instruments submitted to
us as originals are authentic, and that all documents and instruments
submitted to us as copies conform with the originals, which facts we have
not independently verified.
E. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section
406 of the Employee Retirement Income Security Act of 1974.
This opinion is rendered solely for your benefit and may not be
relied upon by any other person or entity for any purpose without our prior
written consent.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(4)(a)(i)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No. N673FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N673FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this opinion to
you in accordance with Section 4.01 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the enforceability
of any particular provision of any of the Owner Trustee Documents
relating to remedies after default or as to the availability of any
specific or equitable relief of any kind. However, we are of the
opinion that, subject to the other limitations and qualifications
contained in this opinion, the remedies provided in the Owner Trustee
Documents, taken as a whole, are adequate for the realization of the
principal benefits or security of said agreements (except for the
economic consequences of procedural or other delay); and
(iv) the enforcement of any rights and the availability
of any specific or equitable relief of any kind may in all cases be
subject to an implied duty of good faith and to general principles of
equity (regardless of whether such enforceability or relief is
considered in a proceeding at law or in equity) and, as to any of
your rights to collateral security, will be subject to a duty to act
in a commercially reasonable manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has full corporate power, authority and legal right to execute,
deliver and perform its obligations under the Trust Agreement and, as
Owner Trustee under the Trust Agreement, to execute, deliver and
perform its obligations under the other Owner Trustee Agreements and
to issue, execute, deliver and perform its obligations under the
Certificate.
2. State Street has duly authorized, executed, and delivered
the Participation Agreement and the Trust Agreement and the
Participation Agreement and the Trust Agreement constitute the legal,
valid and binding obligation of State Street, enforceable against it
in its individual capacity in accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. To our knowledge, there exist no liens or encumbrances
affecting the right, title and interest of the Owner Trustee in and
to the Trust Estate resulting from claims against State Street not
related to the ownership of the Trust Estate or any other transaction
contemplated by the Operative Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
+▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Trust Indenture and Security Agreement (Federal Express
Corporation Trust No. N673FE) dated as of May 1, 1997 (the
"Indenture"), between First Security Bank, National Association
(the "Indenture Trustee"), and State Street Bank and Trust
Company of Connecticut, National Association, not in its
individual capacity, but solely as Owner Trustee (the "Owner
Trustee")
Ladies and Gentlemen:
We have acted as special Connecticut counsel to the Owner
Trustee in connection with the Indenture and the Collateral Account Control
Agreement dated as of May 1, 1997 (the "Control Agreement"), among the Owner
Trustee, the Indenture Trustee and State Street Bank and Trust Company, as
Custodian (the "Custodian").
We are issuing this opinion solely in our capacity as counsel
to the Owner Trustee under the circumstances set forth in this paragraph and
solely as to the matters set forth herein. Pursuant to the Indenture, the
Owner Trustee purports to grant to the Indenture Trustee a security interest,
inter alia, in those securities and instruments, presently owned or hereafter
acquired by the Owner Trustee, that are from time to time credited to an
account numbered [*****] (the "Collateral Account") established by the Owner
Trustee with the Custodian and which securities and instruments the Owner
Trustee has directed the Custodian to identify on the books and records of the
Custodian as being subject to a security interest in favor of the Indenture
Trustee to secure the payment to the Indenture Trustee of the Owner Trustee's
obligations (the "Obligations") under the Indenture. Those securities and
instruments which the Owner Trustee has directed the Custodian to so identify
on the books of the Custodian as being subject to such security interest, and
which, at the time of reference thereto, have not been withdrawn from such
identification or the Collateral Account, are hereinafter referred to,
collectively, as the "Liquid Collateral." We have assumed with your
permission for purposes of this opinion that the Liquid Collateral consists
solely of (a) "securities", either "uncertificated securities" or
"certificated securities", as each such term is defined in Section 8-102 of
the Uniform Commercial Code as currently in effect in the State of Connecticut
(the "Connecticut UCC"), (b) "instruments" (as such term is defined in Section
9-105(1)(i) of the Connecticut UCC) and (c) "general intangibles" (as such
term is defined in Section 9-106 of the Connecticut UCC).
For purposes of this opinion, we have examined the Indenture,
the Control Agreement and such other documents and instruments as are referred
to as having been examined by us for purposes of our opinion letter dated May
___,1997, addressed to the parties listed on Schedule A hereto.
As to all matters of fact, we have examined and have relied
entirely upon the representations and warranties contained in and made
pursuant to the Indenture and the Control Agreement, without any independent
investigation of any kind.
We have assumed the genuineness of all signatures (other
than those on behalf of the Owner Trustee and the Custodian), the
conformity to the originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form, and the legal competence of each individual
executing any document (other than on behalf of the Owner Trustee and the
Custodian).
For purposes of this opinion, we have made such examination of
law as we have deemed necessary. This opinion is limited solely to the
internal substantive laws of the State of Connecticut as applied by courts
located in the State of Connecticut and, where applicable, (i) the revised
Article 8 of the Uniform Commercial Code (with Conforming and Miscellaneous
Amendments to Articles 1, 3, 4, 5, 9 and 10) 1994 Official Text (the "Revised
Article 8") and (ii) the federal laws of the United States of America, in each
case without regard to choice of law. No opinion is given as to the choice of
law which any tribunal may apply to the transactions referred to herein.
Our opinion is further subject to the following exceptions,
qualifications and assumptions, all of which we understand to be acceptable to
you:
(a) We have assumed without any independent investigation
that each party to the transactions contemplated by the Indenture or
the Control Agreement at all times relevant thereto (other than the
Owner Trustee) was duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was
incorporated or organized, and had and has the full power, authority
and legal right under its certificate of incorporation, articles of
organization and other governing documents, corporate or other
enterprise legislation and applicable laws, as the case may be, to
execute and deliver and perform its obligations under all documents
executed by it in connection with those transactions.
(b) We have assumed without any independent investigation
(i) the due authorization, execution and delivery of each of the
Indenture and the Control Agreement by the Indenture Trustee, (ii)
that the execution, delivery and performance by the Indenture
Trustee of each of the Indenture and the Control Agreement does
not and will not conflict with, or result in a breach of, the
terms, conditions or provisions of, or result in a violation of,
or constitute a default or require any consent (other than such
consents as have been duly obtained) under, any organizational
document, any order, judgment, arbitration award or stipulation,
or any agreement, to which the Indenture Trustee is a party or is
subject or by which any of the properties or assets of the
Indenture Trustee is bound, (iii) that the Owner Trustee has
received "value," as defined under the Connecticut UCC, for the
incurrence of the Obligations, (iv) that, whenever the Custodian
receives instructions from the Owner Trustee for the Custodian to
note on its books and records that any securities or instruments
credited to the Collateral Account are to be subject to a security
interest in favor of the Indenture Trustee to secure the payment
of the Obligations, such instructions will have been duly
authorized by or on behalf of the Owner Trustee and (v) that, when
the Indenture Trustee is to act in connection with any of the
transactions contemplated by the Indenture, it is acting in its
capacity as Indenture Trustee.
(c) We have made no examination of, and no opinion is given
herein as to, the Owner Trustee's title to or other ownership rights
in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, the Liquid Collateral, other than the
security interest in favor of the Indenture Trustee as contemplated
by the Indenture and the Control Agreement, and have assumed that the
Owner Trustee has, or at the time of any purported attachment of the
security interest in the relevant Liquid Collateral will have, rights
in the Liquid Collateral.
(d) The perfection and the effect of perfection and
non-perfection of a security interest in the Liquid Collateral that
comprises "uncertificated securities" are, pursuant to Section
9-103(6) of the Connecticut UCC, and the effectiveness of
registration by the issuer and the rights and duties of the issuer
with respect to the registration of transfer, pledge or release of an
"uncertificated security" are, pursuant to Section 8-106 of the
Connecticut UCC, in each case, governed by the laws of the respective
jurisdictions of organization of the issuer or issuers of such
securities, including the conflict of laws rules of such
jurisdictions. Therefore, we express no opinion with respect to such
matters regarding "uncertificated securities" issued by issuers
organized outside of the State of Connecticut other than book-entry
Treasury securities referred to below.
(e) We point out that, pursuant to Part 357 of Title 31 of
the United States Code of Federal Regulations ("CFR"), with
respect to United States "book-entry Treasury securities"
maintained by a Federal Reserve Bank and, pursuant to other
relevant sections of the CFR, with respect to various other
securities issued or guaranteed by the federal government of the
United States or an agency thereof or a corporation sponsored
thereby and maintained by a Federal Reserve Bank, the perfection
of security interests granted by commercial, non-governmental
parties in book-entry Treasury securities, or such other federal
securities, as the case may be, held in a securities account of a
participant financial institution, such as the Custodian,
maintaining such account with such Federal Reserve Bank, will be
governed by the law of the jurisdiction determined in accordance
with Section 357.11 of Title 31 of the CFR. If that jurisdiction
has not adopted Revised Article 8, then such jurisdiction will be
deemed to have adopted Revised Article 8 for purposes of
determining the law governing such perfection. Accordingly,
although Revised Article 8 has not been enacted by Connecticut as
part of the Connecticut UCC, nevertheless, pursuant to Part 357 of
Title 31 of the CFR, Revised Article 8 governs the perfection of a
security interest in book-entry Treasury securities to the extent
that Connecticut law would otherwise be applicable thereto.
(f) We have also assumed that (i) any securities comprised in
the Liquid Collateral and held by Depository Trust Company or another
clearing corporation will be held by Depository Trust Company or such
other clearing corporation for the direct account of the Custodian
and not for the account of the Custodian through any other financial
intermediary, (ii) any securities comprised in the Liquid Collateral
and not constituting either (x) "certificated securities" (as defined
in Section 8-102 of the Connecticut UCC) for which the Custodian
physically holds the certificate or certificates evidencing solely
such securities, or (y) "uncertificated securities" (as defined in
Section 8-102 of the Connecticut UCC) for which the Custodian is the
registered owner on the books of the issuer solely of such
securities, will constitute, or will be held as part of, a fungible
bulk of such "securities" that are registered in the name of the
Custodian or are shown on the Custodian's account on the books of
another financial intermediary, (iii) any "certificated securities"
(as defined in Section 8-102 of the Connecticut UCC) comprised in the
Collateral, if held directly by the Custodian, will be at all times
in the physical possession of the Custodian, and any other
"instruments" (as defined in Section 9-105(1)(i) of the Connecticut
UCC) comprised in the Collateral will be at all times held directly
by and in the physical possession of the Custodian, and (iv) any
securities comprised in the Liquid Collateral consisting of
"book-entry Treasury securities" or other uncertificated federal
securities will be credited to a direct account of the Custodian with
a Reserve Bank (as such term is defined in the relevant section of
the CFR) and not for the account of the Custodian through a financial
intermediary.
(g) We do not express any opinion as to the attachment or
perfection of any security interest in (i) any securities that are
maintained with, or held on the system of, Cedel S.A., or any like
maintenance, clearing or settlement system operating outside of the
United States of America, (ii) any collateral of a type other than
"securities" or "general intangibles" (as defined in Section 9-106 of
the Connecticut UCC) or "instruments" (as defined in Section
9-105(1)(i) of the Connecticut UCC), (iii) the Collateral Account, to
the extent that the Collateral Account constitutes an asset, other
than general intangibles, separate from the property credited
thereto, (iv) any Liquid Collateral which, at the time of reference
thereto, is no longer identified as subject to a security interest
in favor of the Indenture Trustee or has otherwise been withdrawn from
the Collateral Account, or (v) any identifiable proceeds of any Liquid
Collateral (A) following the lapse of the ten day period set forth in
Section 9-306(3) of the Connecticut UCC, to the extent that such
proceeds do not constitute securities, instruments or general
intangibles in which a security interest is perfected in the manner
contemplated by this opinion, as if such proceeds were original
Liquid Collateral, (B) where such proceeds constitute securities and
in which proceeds a security interest is not perfected in the manner
contemplated by this opinion, as if such proceeds were original
collateral, or (C) where the proceeds constitute collateral which is
excluded from Article 8 or 9 of the Connecticut UCC.
(h) We express no opinion as to the priority of such security
interest over any other or competing interest in or claims against
such Liquid Collateral.
(i) We have assumed that (i) the Custodian, in the ordinary
course of business, accepts for deposit securities as a service for
its customers, maintains securities accounts in the names of such
customers reflecting ownership of or interests in such securities,
and, in regard to the transactions contemplated by the Indenture, is
acting in such capacity, (ii) all securities from time to time
credited to the Collateral Account and to be comprised in the Liquid
Collateral will have been "transferred" (within the meaning of
Section 8-313(1) of the Connecticut UCC) to the Custodian by the
issuers or prior holders of such Liquid Collateral, (iii) the records
of the Custodian indicate and will, at the time of reference thereto,
indicate that the aggregate amount of each security comprised in the
Liquid Collateral, together with all other such securities carried by
the Custodian for its customers and for its proprietary account, is
at least equal to the aggregate amount of such security carried by it
for its customers and for its proprietary account, (iv) the books and
records of the Custodian indicate and will, at the time of reference
thereto, indicate that the securities to be comprised in the Liquid
Collateral are registered on the books and records of the Custodian
as being for the beneficial account of the Owner Trustee, subject to,
as identified on such books and records, the security interest
therein in favor of the Indenture Trustee, and (v) the Custodian has
sent and, at the time of reference thereto, will have sent the
confirmations of such entries and identifications to the Indenture
Trustee and to Federal Express Corporation.
(j) In so far as our opinion relates to the enforceability
of any obligations of the Owner Trustee, the enforcement of such
obligations may be limited by bankruptcy, insolvency,
reorganization, moratorium, marshalling or other laws and rules of
law affecting the enforcement generally of creditors' rights and
remedies (including such as may deny giving effect to waivers of
debtors' or guarantors' rights); and we express no opinion as to
(i) the status under Section 548 of the Bankruptcy Code and
applicable state fraudulent conveyance laws of the obligations of
the Owner Trustee under the Indenture or interests purported to be
granted pursuant to the Indenture, (ii) the enforceability of any
particular provision of the Indenture relating to remedies after
default or as to the availability of any specific or equitable
relief of any kind (and we point out that the enforcement of any
of your rights may in all cases be subject to an implied duty of
good faith and fair dealing and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity, and, as to any of your rights to
collateral security, will be subject to a duty to act in a
commercially reasonable manner) or (iii) the enforceability of any
particular provision of the Indenture relating to (A) waivers of
defenses, of rights to trial by jury, or rights to object to
jurisdiction or venue and other rights or benefits bestowed by
operation of law, (B) the effect of suretyship defenses, or
defenses in the nature thereof, with respect to obligations of any
applicable guarantor, joint obligator or surety, (C) waivers of
provisions which are not capable of waiver under Sections 1-102(3)
and 9-501(3) of the Connecticut UCC, (D) the grant of powers of
attorney to the Indenture Trustee, (E) exculpation clauses,
indemnity clauses and clauses relating to releases or waivers of
unmatured claims or rights, (F) interest or other charges that may
be usurious under applicable law, or (G) the collection of
interest on overdue interest or providing for a penalty rate of
interest or late charges on overdue or defaulted obligations.
However, notwithstanding the qualification set forth in the
foregoing clause (ii), and excluding the parenthetical in that
clause, subject to the other exceptions, qualifications and
limitations set forth in this opinion (including the parenthetical
in clause (ii) and subject to the fact that there may be economic
consequences arising out of any procedural or other delay on
account of the limitation or unenforceability of any particular
provision of the Indenture relating to remedies after default,
such limitation or unenforceability does not, in our judgment,
render the provisions of the Indenture and the Control Agreement
relating to remedies after default, taken as a whole, inadequate
for the practical realization of the benefits of enforcement of a
security interest in the Liquid Collateral following the receipt
by the Custodian of an enforcement notice properly given under the
Indenture and the Control Agreement by the Indenture Trustee to
the Custodian with respect to such Liquid Collateral.
(k) With respect to property as to which the security
interest purported to be granted pursuant to the Indenture
attaches after the date hereof, we call to your attention that
Section 552 of the Bankruptcy Code limits the extent to which
assets acquired by a debtor after the commencement of a case under
the United States Bankruptcy Code may be subject to a security
interest arising from a security agreement entered into by the
debtor before the commencement of such case. We further call to
your attention that under Section 547 of the Bankruptcy Code, a
security interest that attaches within the relevant period set
forth in Section 547(b)(4) of the Bankruptcy Code may be avoidable
under certain circumstances.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Indenture Trustee has, under the terms of the
Connecticut UCC and, in the case of book-entry Treasury
securities, under the CFR, a perfected security interest in the
Liquid Collateral that constitutes "securities" (as such term is
defined in Section 8-102 of the Connecticut UCC), or "instruments"
(as defined in Section 9-105(1)(i) of the Connecticut UCC), and in
the identifiable proceeds thereof to secure the payment of the
Obligations.
2. The Indenture creates, under the terms of the Connecticut
UCC, a valid security interest in such of the Liquid Collateral that
constitutes "general intangibles" (as such term is defined in Section
9-106 of the Connecticut UCC) and in the identifiable proceeds
thereof to secure the payment of the Obligations. Upon the filing of
a financing statement on form UCC-1 pursuant to the Connecticut UCC
with the Secretary of State of the State of Connecticut naming the
Owner Trustee as Debtor and the Indenture Trustee as Secured Party
and accurately describing the Liquid Collateral and the Collateral
Account, which filing has been duly effected, such security interest
will be perfected (to the extent that the perfection of a security
interest in the Liquid Collateral can be accomplished by the filing
in Connecticut of financing statements under the Connecticut UCC).
We point out that:
(a) The effectiveness of a financing statement will lapse (i)
on the expiration of a five-year period from their dates of filing,
or (if later) five years from the last date as to which such
financing statements were effective following the proper filing of
continuation statements with respect thereto, unless continuation
statements are filed within six months prior to the expiration of the
applicable five-year period, (ii) with respect to general intangibles
in which a security interest has been perfected by the filing of a
financing statement in the jurisdiction of the location of the
debtor, for a period of more than four months after the debtor has
changed its location from that jurisdiction to a new jurisdiction
unless such security is perfected in the new jurisdiction within the
earlier to occur of the end of such four month period or the date on
which such financing statement would have otherwise lapsed, and (iii)
with respect to "investment property," under and as defined in
Revised Article 8, in which a security interest has been perfected by
the filing of a financing statement in the jurisdiction of the
location of the debtor, from the time that the debtor changes its
location from that jurisdiction to a new jurisdiction unless such
security interest is perfected in the new jurisdiction on or before
the time of such change of location.
(b) If any debtor changes its name, identity or corporate
structure such that any financing statement becomes misleading, such
financing statement will be ineffective to perfect a security
interest in any collateral acquired by such debtor more than four
months after such change.
We assume no obligation to update this opinion as a result of
any change in any fact, circumstance or statute or other rule of law
occurring after the date hereof.
This opinion is delivered to you solely in connection with the
transactions referred to herein and for your sole use and no other
person or entity may rely on this opinion without our express written
consent.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Exhibit A(4)(a)(ii)
[Letterhead of ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇]
[Delivery Date]
To Each of the Parties Listed on Schedule A Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We have acted as counsel to State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association in its individual capacity ("State Street") and its capacity as
Owner Trustee (the "Owner Trustee") under the Trust Agreement (Federal
Express Corporation Trust No. N673FE) dated as of May 1, 1997 between
State Street and PMCC Leasing Corporation, as Owner Participant ("Owner
Participant") (the "Trust Agreement") in connection with the transactions
contemplated by that certain Participation Agreement (Federal Express
Corporation Trust No. N673FE) dated as of May 1, 1997 (the "Participation
Agreement") by and among Federal Express Corporation (the "Lessee"); the
Owner Participant; and First Security Bank, National Association, in its
individual capacity and as Indenture Trustee (the "Indenture Trustee"),
Pass Through Trustee and Subordination Agent. Except as otherwise defined
herein, all capitalized terms used herein shall have the respective
meanings set forth in, or by reference to, the Participation Agreement.
The Owner Trustee has requested that we deliver this Opinion to
you in accordance with Section 4.02 of the Participation Agreement.
Our representation of State Street has been as special counsel
for the purposes stated above. As to all matters of fact (including factual
conclusions and characterizations and descriptions of purpose, intention or
other state of mind), we have relied entirely upon (i) the representations of
the parties set forth in the Operative Agreements and (ii) certificates
delivered to us by the management of State Street and have assumed, without
independent inquiry, the accuracy of those representations and certificates.
We have examined each of the Operative Agreements to which
State Street or the Owner Trustee, as applicable is a party (the "Owner
Trustee Documents"), the Certificate of the Comptroller of the Currency
relating to State Street and originals, or copies certified or otherwise
identified to our satisfaction, of such other corporate records, documents,
certificates and other instruments as we have deemed necessary or advisable
for the purposes of rendering this opinion.
We have assumed the genuineness of all signatures (other than
those on behalf of State Street and the Owner Trustee), the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document (other than
on behalf of State Street and the Owner Trustee).
When an opinion set forth below is given to the best of our
knowledge, or to our knowledge, or with reference to matters of which we are
aware or which are known to us, or with another similar qualification, the
relevant knowledge or awareness is limited to the actual knowledge or
awareness of the individual lawyer in the firm that signed this opinion, the
individual lawyers in the firm who have participated directly in the specific
transactions to which this opinion relates or in the preparation of this
opinion and the partner of the firm responsible for State Street corporate
trust matters, and without any special or additional investigation undertaken
for the purposes of this opinion.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against State Street, the Owner Trustee or the
Owner Participant, as applicable, is subject to the following general
qualifications:
(i) as to any agreement to which State Street or the
Owner Trustee, as applicable, is a party, we assume that such
agreement is the legal, valid and binding obligation or each other
party thereto;
(ii) except as otherwise set forth in our opinions 13
and 14 below, the enforceability of any obligation of State
Street, the Owner Trustee and the Owner Participant, may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling, or other similar laws and
rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights);
(iii) no opinion is given herein as to the
enforceability of any particular provision of any of the Owner
Trustee Documents relating to remedies after default or as to the
availability of any specific or equitable relief of any kind.
However, we are of the opinion that, subject to the other
limitations and qualifications contained in this opinion, the
remedies provided in the Owner Trustee Documents, taken as a
whole, are adequate for the realization of the principal benefits
or security of said agreements (except for the economic
consequences of procedural or other delay); and
(iv) the enforcement of any rights and the
availability of any specific or equitable relief of any kind may
in all cases be subject to an implied duty of good faith and to
general principles of equity (regardless of whether such
enforceability or relief is considered in a proceeding at law or
in equity) and, as to any of your rights to collateral security,
will be subject to a duty to act in a commercially reasonable
manner.
Subject to the limitations set forth herein, we have made
such examination of law as we have deemed necessary for the purposes of
this opinion. The opinions expressed herein are limited solely to the
internal substantive laws of the State of Connecticut and the Federal laws
of the United States of America. No opinion is expressed herein as to the
application or effect of federal securities laws or as to the securities or
so-called "Blue Sky" laws of any state or other jurisdiction. In addition,
no opinion is expressed as to matters governed by the Transportation Code,
or by any other law, statute, rule or regulation of the United States
relating to the acquisition, ownership, registration, use, operation,
maintenance, repair, replacement or sale of or the nature of the Aircraft,
Airframe or the Engines.
We have made no examination of, and no opinion is given herein
as to the Owner Trustee's or Owner Participant's title to or other ownership
rights in, or the existence of any liens, charges or encumbrances on, or
adverse claims against, any of the Indenture Estate. We express no opinion as
to the creation, attachment, perfection or priority of any mortgage, security
interest or lien in any of the Indenture Estate.
With your permission and without investigation, with respect to
paragraphs 2, 3 and 4 below in connection with our opinion relating to the
legality, validity, binding effect of the documents there referred to, to the
extent that the laws of the State of Connecticut do not govern such documents,
we have assumed that the laws of the jurisdictions whose laws govern such
documents are not materially different from the internal substantive laws of
the State of Connecticut.
In rendering our opinion in paragraphs 12 and 13 below, we have
assumed that the Owner Participant acquired its interest in the Trust Estate
for fair consideration and in good faith without any intention to hinder,
defraud or defraud or delay the Owner Participant's creditors.
This opinion is rendered solely for the benefit of those
institutions listed on Schedule A hereto and their respective successors and
assigns in connection with the transactions contemplated by the Operative
Agreements and may not be used or relied upon by any other person or for any
other purpose.
Based upon the foregoing, we are of the opinion that:
1. State Street is a national banking association duly
organized, validly existing and in good standing with the Comptroller
of the Currency under the laws of the United States of America, is a
"citizen of the United States" within the meaning of Section
40102(a)(15) of Title 49 of the United States Code, as amended and
has or had, on the date of execution thereof, full corporate power,
authority and legal right to execute, deliver and perform its
obligations under the Trust Agreement and, as Owner Trustee under the
Trust Agreement, to execute, deliver and perform its obligations
under the other Owner Trustee Agreements and to issue, execute,
deliver and perform its obligations under the Certificate.
2. State Street has or had, on the date of execution thereof,
duly authorized, executed, and delivered the Participation Agreement
and the Trust Agreement and the Participation Agreement and the Trust
Agreement constitute the legal, valid and binding obligation of State
Street, enforceable against it in its individual capacity in
accordance with the terms thereof.
3. The Owner Trustee is duly authorized under the Trust
Agreement to execute, deliver and perform each of the Owner Trustee
Agreements and each such Owner Trustee Agreement constitutes a legal,
valid and binding obligation of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms. The Certificate has
been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and
assuming due authentication thereof by the Indenture Trustee,
constitutes the legal, valid and binding obligation of the Owner
Trustee enforceable against the Owner Trustee in accordance with its
terms and the terms of the Indenture; and the Certificate is entitled
to the benefits and security afforded by the Indenture in accordance
with its terms and the terms of the Indenture.
4. Assuming the due authorization, execution and delivery of
the Trust Agreement by the Owner Participant and that the Owner
Participant has the requisite corporate power and authority to enter
into and perform its obligations under the Trust Agreement, said
Trust Agreement constitutes the legal, valid and binding obligation
of the Owner Participant, enforceable against the owner Participant
in accordance with the terms thereof.
5. The Trust Agreement duly creates a legal and valid trust
under Connecticut law; the trust created by the Trust Agreement
exists for the benefit of the Owner Participant as provided therein
and creates for the benefit of the Owner Participant the interest in
the Trust Estate which the Trust Agreement by its terms purports to
create, subject however to the provisions of, and the Liens created
by, the Indenture and the Lease.
6. To the extent that the Uniform Commercial Code of the State
of Connecticut (the "UCC") is applicable, except for the Indenture
Trustee's taking possession of all monies and securities (including
instruments) constituting part of the Trust Indenture Estate, no
action, including the filing or recording of any document, is
necessary (i) to create under the UCC the security interest in the
Trust Indenture Estate (including the grant and assignment unto the
Indenture Trustee of the security interest in all estate, right,
title and interest of the Owner Trustee in, to and under the Lease
and the Participation Agreement) which the Indenture by its terms
purports to create in favor of the Indenture Trustee, and (ii) to
perfect in the State of Connecticut such security interest, except
for the filing of a UCC financing statement complying with the formal
requisites of Section 9-402 of the UCC in the office of the Division
of Corporations and Commercial Code of the State of Connecticut with
respect to the security interest, which filing has been duly
effected, and the filing of continuation statements with respect
thereto required to be filed at periodic intervals under the UCC.
7. Neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Certificates or the Owner Trustee Documents, the
consummation by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, of any of the transactions
contemplated thereby nor the compliance by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be, with any
of the terms and provisions thereof (i) requires any approval of its
stockholders, any consent or approval of or the giving of notice to
any trustees or holders of any indebtedness or obligations of it
known to us, or (ii) violates its charter documents or by-laws, or
contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the
creation of any Lien (other than as permitted under the Operative
Agreements) upon property under, any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or
credit agreement, license or other agreement or instrument, in each
case, known to us to which it is a party or by which it is bound or
contravenes any Connecticut or United States applicable law governing
the banking or trust powers of the Owner Trustee, or any judgment or
order in each case, known to us applicable to or binding on it.
8. To our knowledge, there are no proceedings or actions
pending or threatened against or affecting the Owner Trustee, in its
individual capacity or as Owner Trustee, before any governmental
authority which, individually or in the aggregate, if adversely
determined, would materially and adversely affect the ability of the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, to enter into or to perform its obligations under the
Owner Trustee Documents or the Certificate.
9. No consent, approval, order or authorization of, giving of
notice to, or registration with, or taking of any other action in
respect of, any Connecticut or United States governmental authority
regulating the banking or trust powers of the Owner Trustee, in its
individual capacity, is required for the execution and delivery of,
or the carrying out by, the Owner Trustee in its individual capacity
or as Owner Trustee, as the case may be, of any of the transactions
contemplated by the Owner Trustee Documents, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken.
10. There are no fees, taxes or other charges payable by the
Owner Trustee, the Trust Estate or the trust created by the Trust
Agreement imposed by the State of Connecticut or any political
subdivision or taxing authority thereof in connection with the
execution, delivery and performance by State Street, individually or
as Owner Trustee, of the Owner Trust Documents (other than franchise
or other taxes based on or measured by any fees or compensation
received by State Street, acting as the Owner Trustee, for services
rendered in connection with the transactions contemplated by the
Operative Agreements) and, assuming that the trust created by the
Trust Agreement will not be taxable as a corporation, but, rather,
will be characterized as a grantor trust under subpart E, Part I of
Subchapter J of the Internal Revenue Code of 1986, as amended, or
will be otherwise ignored for Federal tax purposes, (i) such trust
will not be subject to any fees, taxes or other charges imposed by
the State of Connecticut or any political subdivision thereof based
on income, receipts, value or otherwise, (ii) Holders that are not
residents of or otherwise subject to tax in Connecticut will not be
subject to any taxes imposed by the State of Connecticut or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a
Certificate and (iii) assuming the Owner Participant is not a
Connecticut resident or otherwise subject to tax in Connecticut and
further assuming that the assets of the trust created by the Trust
Agreement are not deemed to be located in Connecticut, the Owner
Participant will not be subject to any taxes imposed by the State of
Connecticut or any political subdivision thereof solely as a result
of being the beneficial owner of the trust created by the Trust
Agreement.
11. The Owner Trustee has received such title to the Aircraft
as has been conveyed to it subject to the rights of the Owner Trustee
and the Lessee under the Lease and the security interest created
pursuant to the Indenture and the Lease; and to our knowledge, there
exist no liens or encumbrances affecting the right, title and
interest of the Owner Trustee in and to the Trust Estate resulting
from claims against State Street not related to the ownership of the
Trust Estate or any other transaction contemplated by the Operative
Agreements.
12. All the properties which are part of the Indenture Estate
(including all right, title and interest of the Owner Trustee pledged
and mortgaged by it pursuant to the Indenture) have been pledged and
mortgaged with the Indenture Trustee as part of the Indenture Estate,
and the beneficial interest of the Owner Participant under the Trust
Agreement in and to such properties is subject, to the extent
provided in the Indenture, to the liens of the Indenture in favor of
the holders from time to time of the Certificate.
13. Neither a Connecticut court nor a Federal court applying
federal law or Connecticut law, if properly presented with the issue
and after having properly considered such issue, would permit the
Owner Participant to terminate the Trust Agreement, except as
otherwise provided therein, until the Lien of the Indenture on the
Indenture Estate has been released and until payment in full of the
principal of, and premium, if any, and interest on, the Certificates
and all other sums due the holders of the Certificates has been made.
14. Under the laws of the State of Connecticut, as long as the
Trust Agreement has not been terminated in accordance with its terms,
creditors of any person that is an Owner Participant, holders of a
lien against the assets of any such person and representatives of
creditors of any such person, such as trustees, receivers or
liquidators (whether or not any insolvency proceeding has been
commenced) (collectively the "Creditors") may acquire legal, valid
and enforceable claims and liens, as to the Trust Estate, only
against the beneficial interest of such person in the Trust Estate,
and do not have, and may not through the enforcement of such
Creditors' rights acquire, any other legal, valid, and enforceable
claim or lien against the Trust Estate.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(5)
[Letterhead of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇]
[Certificate Closing Date]
To the Persons Listed in Schedule A Attached Hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We have acted as special counsel to First Security Bank,
National Association, a national banking association ("First Security"), in
connection with the Pass Through Trust Agreement dated as of May 1, 1997
(the "Pass Through Trust Agreement"), as supplemented by the Series
Supplements dated the date hereof between Federal Express Corporation and
the First Security, not in its individual capacity, except as otherwise
stated, but solely as Pass Through Trustee, designated as Series Supplement
1997-1-A, 1997-1-B and 1997-1-C, respectively (the "Series Supplements")
and the Participation Agreement (Federal Express Corporation Trust No.
N673FE), dated as of May 1, 1997 (the "Participation Agreement"), among
Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as Owner
Participant, State Street Bank and Trust Company of Connecticut, National
Association, not in its individual capacity, except as otherwise stated,
but solely as Owner Trustee, and First Security, not in its individual
capacity, except as otherwise stated, but solely as Indenture Trustee, Pass
Through Trustee and Subordination Agent. Pursuant to the Participation
Agreement, one Airbus A300F4-605R aircraft bearing U.S. Registration No.
N673FE (the "Aircraft") is being financed. This opinion is furnished
pursuant to Section 4.01(k)(iv) of the Participation Agreement.
Capitalized terms used herein and not otherwise defined are used as defined
in the Participation Agreement, except that references herein to any
instrument shall mean such instrument as in effect on the date hereof.
We have examined executed counterparts or copies otherwise
identified to our satisfaction of the following documents:
(a) The Pass Through Trust Agreement;
(b) The Series Supplements;
(c) The Pass Through Certificates;
(d) The Participation Agreement;
(e) The Intercreditor Agreement; and
(f) Each Liquidity Facility.
(each of the documents identified in paragraphs (a) through (e) are being
collectively referred to as the "Pass Through Trustee Documents" and each of
the documents identified in paragraphs (d) through (f) are being collectively
referred to as the "Subordination Agent Documents").
We have also examined originals or copies of such other
documents, such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein and such other instruments as we
have deemed necessary or appropriate for the purposes of this opinion.
Moreover, as to certain facts material to the opinions expressed herein, we
have relied upon representations and warranties contained in the Pass Through
Trustee Documents or the Subordination Agent Documents, as the case may be.
Based upon the foregoing and upon an examination of such
questions of law as we have considered necessary or appropriate, and subject
to the assumptions, exceptions and qualifications set forth below, we advise
you that, in our opinion:
With respect to the opinions set forth in paragraph 8 above,
with your permission we have relied upon, and this opinion is limited by, the
assumptions set forth in the discussion entitled "Certain Utah Taxes" in the
Prospectus Supplement to the Prospectus forming part of Registration Number
No. 333-07691 (the "Registration Statement") for the registration of the Pass
Through Certificates with the Securities and Exchange Commission. We express
no opinion as to the correctness of the foregoing assumptions and we have
conducted no independent investigation in this regard.
1. First Security is a national banking association duly
organized and validly existing under the laws of the United States of
America holding a valid certificate to do business as a national
banking association, with banking and trust powers.
2. Each of First Security, the Pass Through Trustee and the
Subordination Agent, as the case may be, has or had, on the date of
execution thereof, full corporate power, authority and legal right to
execute, deliver and perform each of the Pass Through Trustee
Documents and the Subordination Agent Documents, as the case may be,
and to authenticate the Pass Through Certificates delivered on the
Certificate Closing Date.
3. Each of First Security, the Pass Through Trustee and the
Subordination Agent has duly authorized, executed and delivered each
Pass Through Trustee Document or Subordination Agent Document, as the
case may be; each such document constitutes a legal, valid and
binding obligation of the Pass Through Trustee or the Subordination
Agent, as the case may be (and, to the extent set forth in the
respective Pass Through Trustee Document or Subordination Agent
Document, of First Security) enforceable against the Pass Through
Trustee or the Subordination Agent, as the case may be (and, to the
extent set forth in the respective Pass Through Trustee Document or
Subordination Agent Document, against First Security) in accordance
with its terms.
4. The Pass Through Certificates issued and dated the
Certificate Closing Date have been duly authorized and validly
executed, issued, delivered and authenticated by the Pass Through
Trustee pursuant to the Pass Through Trust Agreement and the Series
Supplements; and the Pass Through Certificates acquired by the
Underwriters under the Underwriting Agreement are enforceable against
the Pass Through Trustee and are entitled to the benefits of the
related Pass Through Trust Agreement and the related Series
Supplements.
5. No order, license, consent, permit, authorization or
approval of or exemption by, and no notice to or filing with, or the
taking of any other action in respect of, any Utah or Federal
governmental authority governing the banking or trust powers of First
Security, the Pass Through Trustee or the Subordination Agent, and no
filing, recording, publication or registration in any public office
is required under Utah or Federal law pertaining to its banking or
trust powers for the due execution, delivery or performance by First
Security, individually or as Pass Through Trustee or Subordination
Agent, as the case may be, of the Pass Through Trustee Documents
(other than the Pass Through Trust Agreement) or the Subordination
Agent Documents, as the case may be, and of the certificate of
authentication, as Pass Through Trustee, on the Pass Through
Certificates, or for the legality, validity, binding effect or
enforceability thereof against First Security, the Pass Through
Trustee or the Subordination Agent, as the case may be.
6. The execution, delivery and performance by the Pass
Through Trustee or First Security, as the case may be, of each of
the Pass Through Documents and the Subordination Agent or First
Security, as the case may be, of each of the Subordination Agent
Documents, and the issuance, execution, delivery and performance
of the Pass Through Certificates by the Pass Through Trustee are
not or were not, on the date of execution thereof, in violation of
the charter or by-laws of First Security or of any law,
governmental rule, or regulation of the State of Utah or the
United States of America governing the banking or trust powers of
First Security or, to our knowledge, of any indenture, mortgage,
bank credit agreement, note or bond purchase agreement, long-term
lease, license or other agreement or instrument to which it is a
party or by which it is bound or, to our knowledge, of any
judgment or order of the State of Utah or the United States of
America relating to the banking or trust powers of First Security.
7. There are no actions, suits, investigations or
proceedings pending or, to our knowledge, threatened against or
affecting First Security, the Pass Through Trustee or the
Subordination Agent or any of its properties in any court or
before any administrative agency or arbitrator, which, if
adversely determined, would materially adversely affect the
ability of First Security, the Pass Through Trustee or the
Subordination Agent, as the case may be, to perform its
obligations under any of the Pass Through Trustee Documents or the
Subordination Agent Documents, as the case may be, and there are
no pending or, to our knowledge, threatened actions or proceedings
before any court, administrative agency or tribunal involving
First Security, the Pass Through Trustee or the Subordination
Agent in connection with the transactions contemplated by any of
the Pass Through Trustee Documents or the Subordination Agent
Documents, as the case may be.
8. Neither the trusts created by the Pass Through Trust
Agreement and the Series Supplements nor the Pass Through Trustee,
in its individual or trust capacity, as the case may be, nor their
respective Affiliates, successors or assigns, will be subject to
any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or
doing business tax), fee or other governmental charge under the
laws of the State of Utah or any political subdivision thereof
(other than taxes imposed on the fees received by State Street
Bank and Trust Company for acting as Pass Through Trustee under
the Series Supplements). Certificate holders who are not
residents of or otherwise subject to tax in Utah will not be
subject to any tax (including, without limitation, net or gross
income, tangible or intangible property, net worth, capital,
franchise or doing business tax), fee or other governmental charge
under the laws of the State of Utah or any political subdivision
thereof as a result of purchasing, owning (including receiving
payments with respect to) or selling a Pass Through Certificate.
There are no applicable taxes under the laws of the State of Utah
or any political subdivision thereof upon or with respect to (a)
the construction, mortgaging, financing, refinancing, purchase,
acquisition, acceptance, rejection, delivery, nondelivery,
transport, location, ownership, insurance, control, assembly,
possession, repossession, operation, use, condition, maintenance,
repair, sale, return, abandonment, replacement, preparation,
installation, storage, redelivery, manufacture, leasing,
subleasing, modification, rebuilding, importation, transfer of
title, transfer of registration, exportation or other application
or disposition of the Aircraft or any interest in any thereof, (b)
payments of Rent or other receipts, income or earnings arising
therefrom or received with respect to the Aircraft or any interest
in any thereof or payable pursuant to the Lease, (c) any amount
paid or payable pursuant to any Operative Agreements, (d) the
Aircraft or any interest therein or the applicability of the Lease
to the Aircraft or any interest in any thereof, (e) any or all of
the Operative Agreements, any or all of the Pass Through
Certificates or any interest in any or all thereof or the
offering, registration, reregistration, issuance, acquisition,
modification, assumption, reissuance, refinancing or refunding of
any or all thereof, and any other documents contemplated thereby
and amendments or supplements hereto and thereto, (f) the payment
of the principal of, or interest or premium on, or other amounts
payable with respect to, any or all of the Pass Through
Certificates, whether as originally issued or pursuant to any
refinancing, refunding, assumption, modification or reissuance, or
any other obligation evidencing any loan in replacement of the
loan evidenced by any or all of the Pass Through Certificates, or
(g) otherwise with respect to or in connection with the
transactions contemplated by the Pass Through Trust Agreement, the
Series Supplements, the Pass Through Certificates and the
Operative Agreements, which would not have been imposed if the
Pass Through Trustee had not had its principal place of business
in, had not performed (either in its individual capacity or as
Pass Through Trustee) any or all of its administrative duties
under the Pass Through Trust Agreement, the Series Supplements,
the Pass Through Certificates and the Operative Agreements in, and
had not engaged in any activities unrelated to the transactions
contemplated by the Pass Through Trust Agreement, the Series
Supplements, the Pass Through Certificates and the Operative
Agreements in, the State of Utah.
9. Each of the Certificates to be delivered to and registered
in the name of the Subordination Agent on the date hereof pursuant to
the Participation Agreement and the Intercreditor Agreement will be
held by the Subordination Agent in trust for the Pass Through Trustee
under the applicable Pass Through Trust Agreement.
Very truly yours,
Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(a)
[Letterhead of Kredietbank N.V.]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
I am the manager of the Legal Department of Kredietbank N.V.
("Kredietbank") and have advised Kredietbank and its New York Branch (the
"Branch") in connection with (i) the Irrevocable Revolving Credit Agreement
Class A Certificates, dated as of May 1, 1997 (the "Class A Liquidity
Agreement"), between the Branch and First Security Bank, National
Association, a national banking association, as Subordination Agent under
the Intercreditor Agreement, defined below, and as agent and trustee for
the Federal Express Corporation Pass Through Trust 1997-1-A, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement"), between the Branch and
First Security Bank, National Association, a national banking association,
as Subordination Agent under the Intercreditor Agreement, defined below,
and as agent and trustee for the Federal Express Corporation Pass Through
Trust 1997-1-B (the "Intercreditor Agreement" and, together with the
Liquidity Agreements, the "Liquidity Documents"), and (iii) the
Intercreditor Agreement, dated as of May 1, 1997 (the "Intercreditor
Agreement"), among the Branch, First Security Bank, National Association,
as Pass Through Trustee and as Subordination Agent (the Liquidity
Agreements and the Intercreditor Agreement are hereinafter collectively the
"Liquidity Documents").
Capitalized terms herein which are undefined have the meanings
assigned to them in the Liquidity Documents.
I am rendering this opinion in my capacity as manager of the
Legal Department and without being personally liable to any extent for the
opinions expressed herein.
In connection with the opinions hereinafter given, I have
examined a copy of each of the Liquidity Documents and such other
certificates, documents, agreements and instruments as I have deemed
necessary as a basis for the opinions expressed below.
In such examination, I have assumed the genuineness of all
signatures, the authenticity of all agreements, certificates, instruments and
documents submitted to me as originals, and the conformity to the originals of
all agreements, certificates, instruments and documents submitted to me as
copies. As to questions of fact material to the opinions expressed below, I
have, when relevant facts were not independently established by me, examined
and relied upon representations of officers of Kredietbank.
Based upon the foregoing examination and assumptions, and
subject to the qualifications set forth below, I am of the opinion that:
1. Kredietbank is duly organized and validly existing as a
Belgian public law banking institution under the law of Belgium and
has full power and authority (corporate and otherwise) to execute,
deliver and perform the Liquidity Documents.
2. [▇▇▇ ▇▇▇▇▇] or [▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇], acting together with
[▇▇▇▇ ▇▇▇▇▇▇▇], if acting for and on behalf of the Branch, are
duly authorized by Kredietbank to execute and deliver the
Liquidity Documents for and on behalf of the Branch. Assuming
each of the Liquidity Documents has been duly executed and
delivered for and on behalf of the Branch by such persons, no
further authorization by or any corporate action of Kredietbank is
required in connection with the execution, delivery and
performance thereof.
3. The governing-law clause, subjecting the Liquidity
Documents to New York law, is valid under Belgian law.
(i) Under Belgian law, New York law will be applied to an
agreement, such as the Liquidity Documents, which under Belgian
law has been validly subjected to New York laws.
(ii) (a) None of the terms of the Liquidity Documents
is irreconcilable with important principles of Belgian law,
and (b) there are no mandatory provisions of Belgian law
which must be applied to the transactions covered by the
Liquidity Documents.
(iii) Each of the Liquidity Documents constitutes the
legal, valid and binding obligation of Kredietbank,
enforceable against Kredietbank in accordance with its
terms, the rules of civil procedures of Belgium and the
applicable provisions of the chosen law of New York.
4. No authorization, consent, approval or other action by,
and no notice to or filing with, any governmental, administrative
or other authority or court of Belgium is required for the
execution or delivery of the Liquidity Documents by Kredietbank
through the Branch or for the performance by Kredietbank or by the
Branch of the Liquidity Documents.
5. The execution, delivery and performance of the Liquidity
Documents by Kredietbank or the Branch will not result in any
violation by Kredietbank or by the Branch of any law of Belgium.
6. The contractual obligations incurred by virtue of the
execution and delivery of the Liquidity Documents for and on behalf
of the Branch are the obligations of Kredietbank, and Kredietbank has
no defenses against the performance of such obligations which are
based on the fact that Kredietbank had acted through the Branch in
executing and delivering the Liquidity Documents.
7. If a final and conclusive judgment of the Supreme Court of
the State of New York, New York County, or of the Untied States
District Court for the Southern District of New York for a definite
sum for the recovery of amounts due and unpaid under the Liquidity
Documents were to be rendered against Kredietbank, a reexamination or
relitigation on the merits of the subject matter thereof in
accordance with Article 570 of the Belgian Judicial Code would be
necessary in order to obtain recognition and/or enforcement of such
judgment in Belgium.
8. The obligations of Kredietbank under the Liquidity
Documents rank at least equal in priority of payment and in all
other respects with its obligations to pay any other unsecured and
unsubordinated obligations of Kredietbank for borrowed money,
including deposit liabilities, that are not expressly preferred by
law.
The foregoing opinions are subject to the following
qualifications:
(i) The opinion in paragraph (3) with respect to
enforceability is subject to the effect of any bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar
laws affecting creditors' rights generally, applicable to
Kredietbank and to any law or general principle of law from
time to time in effect in Belgium that could be considered by
the Belgian Courts as a provision of public policy.
(ii) In giving the opinions in paragraphs (3)(iii), (6) and
(8), I have assumed, with your consent, that each of the
Liquidity Documents is legal, valid and binding under New York
law, all as set forth more fully in the opinion dated of even
date herewith of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ issued in
connection with the Liquidity Documents.
(iii) No opinion is expressed with respect to the law of any
jurisdiction other than the law of Belgium.
This opinion is being furnished to you solely for your benefit
in connection with the transactions described above and may not be used,
circulated, quoted or otherwise referred to for any other purpose without my
express written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(6)(b)
[Letterhead of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇]
[Certificate Closing Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation 1997-1
Enhanced Pass Through Certificates
Ladies and Gentlemen:
We have acted as special New York counsel to Kredietbank
N.V., New York Branch (herein called the "Liquidity Provider") in
connection with the transactions contemplated by (i) the Irrevocable
Revolving Credit Agreement Class A Certificates, dated as of May 1, 1997
(the "Class A Liquidity Agreement"), between the Liquidity Provider and
First Security Bank, National Association, as Subordination Agent under the
Intercreditor Agreement, as defined below, as agent and trustee for the
Federal Express Corporation 1997-1-A Pass Through Trust, (ii) the
Irrevocable Revolving Credit Agreement Class B Certificates, dated as of
May 1, 1997 (the "Class B Liquidity Agreement" and, together with the Class
A Liquidity Agreement, the "Liquidity Agreements"), between the Liquidity
Provider and First Security Bank, National Association, as Subordination
Agent under the Intercreditor Agreement, as defined below, as agent and
trustee for the Federal Express Corporation 1997-1-B Pass Through Trust,
and (iii) the Intercreditor Agreement, dated as of May 1, 1997 (the
"Intercreditor Agreement" and, together with the Liquidity Agreements, the
"Liquidity Documents"), among the Liquidity Provider and First Security
Bank, National Association, as Pass Through Trustee and as Subordination
Agent. Capitalized terms used herein but not otherwise defined herein
shall have the meanings provided in the Liquidity Documents.
In rendering the opinion expressed below, we have examined
the Liquidity Documents, the opinion dated the date hereof of ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Esq., manager of the Legal Department of Kredietbank N.V., and such
other documents as we have deemed necessary.
In our examination, we have assumed the authenticity of all
documents submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies. When relevant
facts were not independently established, we have relied upon representations
made in or pursuant to the Liquidity Documents.
In rendering the opinion expressed below, we have assumed, with
respect to each Liquidity Document, that:
(i) it has been duly authorized by, has been duly executed and
delivered by, and (except to the extent set forth in the
opinion below as to the Liquidity Provider) constitutes
legal, valid, binding and enforceable obligations of all of
the parties thereto;
(ii) all signatories thereto have been duly authorized; and
(iii) all of the parties thereto are duly organized and validly
existing and have the power and authority (corporate,
partnership, trust or other) to execute, deliver and perform
thereunder.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinion
expressed below, we are of the opinion that each Liquidity Document
constitutes the legal, valid and binding obligation of the Liquidity
Provider, enforceable against the Liquidity Provider in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or transfer or other similar laws
relating to or affecting the rights of creditors generally and except as
the enforceability of such Liquidity Document is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including, without limitation, (a) the
possible unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality, reasonableness,
good faith and fair dealing.
The foregoing opinion is subject to the following comments and
qualifications:
(A) The enforceability of provisions in the Liquidity
Documents to the effect that terms may not be waived or modified
except in writing may be limited under certain circumstances.
(B) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which the Liquidity Provider is located (other
than New York) that limit the interest, fees or other charges the
Liquidity Provider may impose for the loan or use of money or other
credit, (ii) Section 7.11(a)(i) of each Liquidity Agreement and
Section 10.11(a)(i) of the Intercreditor Agreement, insofar as such
Sections relate to the subject matter jurisdiction of a Federal court
sitting in New York, New York to adjudicate any controversy related
to the Liquidity Documents, (iii) the waiver of inconvenient forum
set forth in Section 7.11(a)(ii) of each Liquidity Agreement and
Section 10.11(a)(ii) of the Intercreditor Agreement with respect to
proceedings in a Federal court sitting in New York, New York and a
State court of the State of New York and (iv) the waiver of immunity
set forth in Section 10.11(c) of the Intercreditor Agreement with
respect to proceedings in a Federal court sitting in New York, New
York and a State court of the State of New York.
The foregoing opinion is limited to matters involving the
Federal laws of the United States of America and the law of the State of
New York, and we do not express any opinion as to the laws of any other
jurisdiction. In particular, we do not express any opinion as to the laws
of Belgium and, to the extent such laws may be relevant to the opinion
expressed herein, we have, with your permission, relied upon the
aforementioned opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., manager of the Legal
Department of Kredietbank N.V., without independently considering the
matters covered thereby, and our opinion is subject to all limitations,
exceptions and qualifications contained therein as if set forth herein in
full.
At the request of the Liquidity Provider, this opinion letter is
provided to you by us in our capacity as special New York counsel to the
Liquidity Provider, and this opinion letter may not be relied upon by any
Person for any purpose other than in connection with the transactions
contemplated by the Liquidity Documents without, in each instance, our prior
written consent.
Very truly yours,
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(7)
[Letter of General Electric Company]
[Delivery Date]
To Each of the Parties named on Schedule A Hereto
Re: Federal Express Corporation Trust No. N673FE
Reference is made to (i) that certain Participation Agreement
(Federal Express Corporation Trust No. N673FE), dated as of May 1, 1997
(the "Participation Agreement") by and among Federal Express Corporation,
as Lessee ("Fed Ex"), PMCC Leasing Corporation, as Owner Participant, State
Street Bank and Trust Company of Connecticut, National Association ("SSB")
(not in its individual capacity, except as otherwise expressly set forth
therein, but solely as Owner Trustee), First Security Bank, National
Association ("FSB") (not in its individual capacity, except as otherwise
expressly set forth therein, but solely as Indenture Trustee, Pass Through
Trustee and Subordination Agent); (ii) that certain Purchase Agreement
Assignment (Federal Express Corporation Trust No. N673FE), dated as of May
1, 1997 (the "Purchase Agreement Assignment") between Fed Ex, as Lessee and
SSB, as Lessor; (iii) that certain Lease Agreement (Federal Express
Corporation Trust No. N673FE), dated as of May 1, 1997 (the "Lease")
between SSB (not in its individual capacity, but solely as Owner Trustee),
as Lessor and Fed Ex, as Lessee; (iv) that certain Trust Indenture and
Security Agreement (Federal Express Corporation Trust No. N673FE), dated
as of May 1, 1997 (the "Trust Indenture") between SSB (not in its
individual capacity), as Owner Trustee and FSB (not in its individual
capacity), as Indenture Trustee; and (v) that certain Trust Agreement
(Federal Express Corporation Trust No. N673FE), dated as of May 1, 1997
(the "Trust Agreement") between SSB (not in its individual capacity), as
Owner Trustee and PMCC Leasing Corporation, as Trustor.
I am an attorney employed by General Electric Company, a New York
corporation (the "Engine Manufacturer") and as such have acted as counsel
for the Engine Manufacturer in connection with the execution and delivery
by the Engine Manufacturer of the Consent (the "Consent"), and the Engine
Warranty Assignment (Federal Express Corporation Trust No. N673FE) (the
"Engine Warranty Assignment"), each attached to the Participation Agreement
as Exhibit F and dated as of May 1, 1997. The Consent and the Engine
Warranty Assignment covers two GE CF6-80C2-A5F series engines bearing
Engine Manufacturer's serial numbers ___-___ and ___-___, respectively. In
this connection, I have, or an attorney under my supervision has, reviewed
such documents as I have deemed necessary for the purpose of this opinion,
including, but without limiting the generality of the foregoing, the
General Terms Agreement No. 6-9034, dated as of July 3, 1991 between the
Engine Manufacturer and Fed Ex (the "General Terms Agreement"), the Engine
Product Support Plan forming a part thereof (the "Engine Product Support
Plan"), the Participation Agreement, the Purchase Agreement Assignment, the
Lease, the Trust Indenture and the Trust Agreement.
In making such examinations, I have relied upon the accuracy of
original, certified, conformed, photocopied or telecopied copies of such
records, agreements, certificates and other documents as I have deemed
necessary or appropriate to enable me to render the opinions expressed
herein. In all such examinations, I have assumed the genuineness of
signatures on original documents and the conformity to such original
documents of all copies submitted to me as certified, conformed,
photocopied or telecopied copies, and as to certificates and telegraphic
and telephonic confirmations given by public officials, I have assumed the
same to have been properly given and to be accurate. As to various
questions of fact material to such opinions, I have relied, when such
relevant facts were not independently established by me, solely upon the
accuracy of the statements, representations and warranties made in the
Participation Agreement, the Purchase Agreement Assignment, the Lease, the
Trust Indenture and the Trust Agreement.
With your consent, and for the purposes of this opinion, I have
assumed (other than with respect to the Engine Manufacturer), the accuracy of
the following matters, but I have not made any independent investigation or
inquiry with respect thereto and I render no opinion on such matters:
(a) each of the Participation Agreement, the Purchase
Agreement Assignment, the Lease, the Trust Indenture, and the Trust
Agreement have been duly and validly authorized, executed and
delivered by all parties thereto and constitutes the legal, valid and
binding obligations of each of such parties in accordance with the
respective terms thereof; and
(b) the respective parties to the Participation Agreement,
the Purchase Agreement Assignment, the Lease, the Trust Indenture,
and the Trust Agreement have obtained, and there are in full force
and effect, any and all federal, state, local or foreign
governmental agencies and authorities in connection with the
transactions contemplated thereby, to the extent necessary for the
legality, validity and binding effect or enforceability of the
Consent and the Engine Warranty Assignment.
Based upon the foregoing, and subject to the specific assumptions,
qualifications and reliances herein set forth, and on the basis of my
consideration of such facts and law as I have deemed necessary for purposes of
this letter, it is my opinion that:
(1) The Engine Manufacturer has the full corporate power,
authority and the legal right to enter into and perform its
obligations under the General Terms Agreement, the Consent and the
Engine Warranty Assignment. The execution, delivery and
performance by the Engine Manufacturer of each of the General
Terms Agreement, the Consent and the Engine Warranty Assignment
was duly authorized by all necessary corporate action on the part
of the Engine Manufacturer.
(2) Each of the General Terms Agreement, the Consent and
Engine Warranty Assignment has been duly authorized, executed and
delivered by and constitutes a legal, valid and binding obligation of
the Engine Manufacturer, enforceable against the Engine Manufacturer
in accordance with the respective terms thereof, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general equity principles.
(3) The Engine Product Support Plan insofar as it relates to
the Engine Warranties (as such term is defined in the Engine Warranty
Assignment), constitutes a legal, valid and binding obligation of the
Engine Manufacturer, enforceable against the Engine Manufacturer in
accordance with the terms thereof, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general equity principles.
The foregoing opinions are limited to the laws of the State
of New York and the federal laws of the United States of America, but no
opinion is expressed as to matters governed by the Transportation Code, or
by any other law, statute, rule or regulation of the United States relating
to the acquisition, ownership, registration, use, operation, maintenance,
repair, replacement or sale of aircraft. Further, no opinion is expressed
as to title to any engines or other property.
This opinion is furnished by me at your request for your
sole benefit and no other person or entity shall be entitled to rely on
this opinion without our express written consent. My opinion is limited to
the matters stated herein and no opinion is implied or may be inferred
beyond the matters expressly stated herein.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(8)
[Letterhead of ▇▇▇▇▇▇▇▇ Chance]
[Delivery Date]
To The Opinion Addressees referred to in Schedule A hereof
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
We are special French counsel for Airbus Industrie G.I.E.
("Airbus") and AVSA S.A.R.L. ("AVSA") and you have asked for our opinion
in connection with certain transactions contemplated in the Participation
Agreement (Federal Express Corporation Trust No. N673FE), dated as of May
1, 1997 (the "Participation Agreement") among Federal Express Corporation,
as Lessee ("Federal Express"), PMCC Leasing Corporation, as Owner
Participant ("Owner Participant"), State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except
as otherwise stated, but solely as Owner Trustee ("Owner Trustee"), First
Security Bank, National Association, not in its individual capacity, except
as otherwise stated, but solely as Indenture Trustee ("Indenture Trustee"),
Pass Through Trustee and Subordination Agent, and relating to the Aircraft
to be operated by Federal Express.
This opinion is being delivered pursuant to Section 4.02(m)(x)
of the Participation Agreement.
Capitalized terms used in this opinion and not otherwise
defined shall have the meaning assigned thereto in the Participation
Agreement.
We have examined:
(i) a copy of an Airbus A300-600R Freighter Purchase Agreement
dated as of July 3, 1991 and made between AVSA and Federal
Express with an executed Consent and Guaranty of Airbus of
same date attached thereto, sent to us by facsimile by
AINA Holdings Inc. ("AINA") on April 27, 1994;
(ii) a copy sent to us by facsimile by ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ on
_________________ of an executed Purchase Agreement
Assignment dated as of May 1, 1997 (the "Purchase
Agreement Assignment") made between Federal Express and
the Owner Trustee;
(iii) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie Consent and
Agreement to the Purchase Agreement Assignment;
(iv) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated AVSA Consent and Agreement to
the Purchase Agreement Assignment;
(v) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Warranty ▇▇▇▇ of Sale, relating
to the Aircraft and transferring title therein from AVSA
to the Owner Trustee ("AVSA Warranty ▇▇▇▇ of Sale");
(vi) a copy sent to us by facsimile by AVSA on _________________
of an executed but undated Airbus Industrie G.I.E.
Warranty, in favour of the Participants (the "Airbus
Warranty") warranting AVSA's Warranty ▇▇▇▇ of Sale;
(vii) a copy sent to us by facsimile by AVSA on _________________
of an undated FAA ▇▇▇▇ of Sale executed by AVSA in favour
of the Owner Trustee;
(viii) a copy sent to us by facsimile by AVSA on May 3, 1995 of an
executed power of attorney dated September 1, 1994 appointing
Messrs. ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, acting singly, as
attorneys-in-fact of ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
("Administrateur Gerant") of Airbus;
(ix) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing ▇.▇ ▇▇▇▇▇▇▇ as attorney-in-fact of ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant") of
Airbus;
(x) a copy sent to us by facsimile by AVSA on September 15, 1995
of an executed power of attorney dated August 16, 1995
appointing Xavier de Rouville as attorney-in-fact of ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director ("Administrateur Gerant")
of Airbus;
(xi) a copy sent to us by courier by AVSA on September 15, 1995 of
an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇▇▇ Lascaux and ▇▇. ▇▇▇▇▇▇▇ O. de
Coninck, acting singly, as attorneys-in-fact of ▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of
AVSA; and
(xii) a copy sent to us by courier by AVSA on September 15, 1995
of an executed power of attorney dated August 1, 1995
appointing Ms. ▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇▇▇
Lascaux, Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇,
acting singly, as attorneys-in-fact of ▇▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Chief Executive Officer ("Gerant") of AVSA.
(the documents referred to in paragraphs (i) to (xii) being referred to herein
as the "Documents").
Based on the foregoing, and such other documents, records
and other instruments as we have deemed necessary or appropriate for the
purpose of this opinion, and assuming the Documents to have been duly
executed by the parties thereto (other than Airbus and AVSA), the
genuineness of all signatures and the completeness and conformity to the
originals of all documents supplied to us as copies or as facsimiles, we
are of the opinion that, subject to the qualifications set out below:
1. Airbus is a groupement d'interet economique duly organized and
existing under the laws of the French Republic, and has the
power and authority to carry on its business as now conducted.
The present members of Airbus are (i) Aerospatiale, Societe
Nationale Industrielle, (ii) Daimler-Benz Aerospace Airbus
GmbH, (iii) British Aerospace (Operations) Ltd. and (iv)
Construcciones Aeronauticas S.A., and each of such corporations
is, without the need to proceed against any collateral security
for the indebtedness of Airbus or to take any other legal
action or process (except for service on Airbus by huissier of
notice to perform and subsequent failure by Airbus to do so),
jointly and severally liable with the other members for the
debts of Airbus arising out of obligations contracted by Airbus
while such corporation is a member of Airbus.
2. AVSA is a societe a responsabilite limitee duly established
and existing under the laws of the French Republic and has
the power and authority to carry on its business as now
conducted.
3. Each of Airbus and AVSA has full power and authority to enter
into and to execute, deliver and perform its obligations under
those of the Documents to which it is a party; such obligations
are legal, valid and binding upon them respectively, are
enforceable in accordance with their respective terms and rank
pari passu with the other unsecured obligations of Airbus or
AVSA, as the case may be.
4. All actions, authorizations, approvals, consents, conditions
and things required at law to be taken, fulfilled and done
to authorize the execution, delivery and performance by
Airbus and AVSA of those of the Documents to which they
respectively are party have been taken, obtained, fulfilled
and done; and no consents under any exchange control, laws,
rules or regulations of the French Republic are necessary in
connection therewith.
5. Neither the execution and delivery and performance of the
Documents to which Airbus and AVSA respectively are a party,
nor the consummation of the transactions contemplated
thereby, contravenes or violates any law, governmental rule
or regulation applicable to or binding on Airbus or AVSA.
6. The choice of the laws of the State of New York to govern the
Documents (which are expressed to be so governed) is valid
under the laws of the French Republic, and a French court
would uphold such choice of law in any suit on the Documents
brought in a French court.
7. Under the laws of the French Republic, Airbus and AVSA are
subject to private commercial law and to suit, and neither
Airbus nor AVSA, nor their respective properties have any
immunity from the jurisdiction of any court or any legal
process (whether through service of notice, attachment prior to
notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise), except that:
(a) to the extent that Airbus or AVSA occupies or possesses
any property by virtue of any license or grant from the
French State, such property and the title of Airbus or
AVSA thereto may be immune from suit or execution on the
grounds of sovereignty, and
(b) suit and execution against Airbus and AVSA or their
respective property may be affected by action taken by
the French public authorities in the interests of
national defence or on the occurrence of exceptional
circumstances of paramount importance to the national
interest of France, as such concept is understood
under the Constitution, laws and regulations of
France.
8. No French value added tax is due upon the transfer of title of
the Aircraft from AVSA to State Street Bank and Trust
Company of Connecticut, National Association as Owner
Trustee.
9. In connection with the obligations of Airbus and AVSA under the
Documents, this opinion must be read subject to the following
qualifications and observations as to French law:
(a) the remedy of specific performance may not be available
in a French court;
(b) the enforcement against Airbus of any of the Documents to
which it is a party may be limited by applicable
bankruptcy, insolvency, arrangement, moratorium or
similar laws relating to or affecting the enforcement of
creditors' rights generally, as such laws are applied to
Airbus. The enforcement against AVSA of any of the
Documents to which it is a party may be limited by such
laws, as such laws are applied to AVSA. The enforcement
against any member of Airbus of any obligation of Airbus
contained in the Documents may be limited by such laws,
as such laws are applied to such member;
(c) in respect of payment obligations, a French court has
power under Article 1244-1 of the French Civil Code to
grant time to a debtor (not in excess of two years),
taking into account the position of the debtor and the
needs of the creditor;
(d) in order to ensure the validity as against third parties
of the assignment made in the Purchase Agreement
Assignment, it is necessary that notice of such
assignment be served on Airbus and AVSA by "huissier" in
accordance with the provisions of Article 1690 of the
French Civil Code;
(e) in the event of any proceedings being brought in a
French court in respect of a monetary obligation
expressed to be payable in a currency other than
French Francs, a French court would probably give
judgment expressed as an order to pay, not such
currency, but its French Franc equivalent at the time
of payment or enforcement of judgment. With respect
to a bankruptcy, insolvency, liquidation, moratorium,
reorganization, reconstruction or similar proceedings,
French law may require that all claims or debts be
converted into French Francs at an exchange rate
determined by the court at a date related thereto,
such as the date of commencement of a winding-up;
(f) a determination or certificate as to any matter provided
for in the Documents might be held by a French court not
to be final, conclusive or binding, if such determination
or certificate could be shown to have an unreasonable,
incorrect or arbitrary basis or not to have been given or
made in good faith;
(g) claims may become barred by effluxion of time or may be
or become subject to defence of set-off or
counterclaim;
(h) provisions in any Document providing that it or any
other Documents may be amended or varied or any
provision thereof waived only by an instrument in
writing may not be effective;
(i) a French court may stay proceedings if concurrent
proceedings are being brought elsewhere;
(j) we express no opinion as to whether any provision in the
Documents conferring a right of set-off or similar
right would be effective against a liquidator or a
creditor; and
(k) our opinion as to the enforceability of the Documents
relates only to their enforceability in France in
circumstances where the competent French court has and
accepts jurisdiction. The term "enforceability" refers
to the legal character of the obligations assumed by the
parties under the documents, i.e., that they are of a
character which French law enforces or recognizes. It
does not mean that the Documents will be enforced in all
circumstances or in foreign jurisdictions or by or
against third parties or that any particular remedy will
be available.
(l) Article 899 of the French Tax Code provides that
agreements evidencing an undertaking to pay a sum of
money are subject to stamp tax ("droit de timbre") of a
nominal amount if made in the French Republic, if made in
a foreign country, such agreements are subject to a stamp
tax of a nominal amount before certain use thereof can be
made in the French Republic (Article 897 of the French
Tax Code). However non-payment of such stamp tax does
not affect the legality, validity or enforceability of
the agreements.
In rendering the foregoing opinions, we have assumed that the
Documents (expressed to be governed by New York law) constitute the legal,
valid and binding obligations of the parties under New York law.
We are qualified as French Avocats.
No opinion is expressed herein as to laws other than the
laws of the French Republic as of the date hereof. This opinion is for
your use and that of no one else, and is limited to (i) the matters
specifically mentioned herein, and (ii) the purpose set out above.
Very truly yours,
▇▇▇▇▇▇▇▇ Chance
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT A(9)
[Letterhead of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
[Delivery Date]
To the Parties Named on Schedule A attached hereto
Re: Federal Express Corporation Trust No. N673FE
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.02(d)(iii) of the Participation Agreement (Federal Express Corporation
Trust No. N673FE), dated as of May 1, 1997 (the "Participation Agreement")
among Federal Express Corporation, as Lessee (the "Lessee"), PMCC Leasing
Corporation, as Owner Participant (the "Owner Participant"), State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as otherwise stated, but solely as Owner
Trustee ("Owner Trustee"), First Security Bank, National Association, not
in its individual capacity, except as otherwise stated, but solely as
Indenture Trustee ("Indenture Trustee"), Pass Through Trustee and
Subordination Agent, with respect to that portion of Subtitle VII of Title
49 of the United States Code relative to the recordation of instruments and
the registration of aircraft thereunder.
The capitalized terms herein shall, unless otherwise
defined, have the same meanings given them in the Participation Agreement
or in Annex I attached hereto.
We have examined and filed on this date with the Federal
Aviation Administration (the "FAA") the following described instruments at
the respective times listed below:
(a) AC Form 8050-2 Aircraft ▇▇▇▇ of Sale dated
_____________ (the "FAA ▇▇▇▇ of Sale") from AVSA, as
seller, conveying title to the Airframe to the Owner
Trustee, which FAA ▇▇▇▇ of Sale was filed at ____
_.m., C._.T.;
(b) AC Form 8050-1 Aircraft Registration Application dated
_____________ (the "Aircraft Registration
Application") by the Owner Trustee, as applicant,
covering the Airframe, which Aircraft Registration
Application was filed at ____ _.m., C._.T.;
(c) Affidavit of the Owner Trustee dated _____________ (the
"Owner Trustee Affidavit") pursuant to Section
47.7(c)(2)(ii) of Part 47 of the Federal Aviation
Regulations together with Affidavit of the Owner
Participant dated _____________ (the "Owner
Participant Affidavit") attached thereto, which Owner
Trustee Affidavit with the Owner Participant Affidavit
attached was filed at ____ _.m., C._.T.;
(d) executed counterpart of Trust Agreement (Federal Express
Corporation Trust No. N673FE) dated as of May 1, 1997
(the "Trust Agreement") between the Owner Participant
and the Owner Trustee, which Trust Agreement was filed
at ____ _.m., C._.T.;
(e) executed counterpart of Trust Indenture and Security
Agreement (Federal Express Corporation Trust No.
N673FE) dated as of May 1, 1997 (the "Trust
Indenture") between the Owner Trustee and the
Indenture Trustee, with executed counterpart of
Indenture and Security Agreement Supplement No. 1
(Federal Express Corporation Trust No. N673FE) dated
_____________ (the "Trust Indenture Supplement") by
the Owner Trustee, covering the Aircraft, attached
thereto, which Trust Indenture with the Trust
Indenture Supplement attached was filed at ____ _.m.,
C._.T.; and,
(f) executed counterpart of Lease Agreement (Federal Express
Corporation Trust No. N673FE) dated as of May 1, 1997
(the "Lease") between the Owner Trustee, as lessor,
and the Lessee, with executed counterparts of the
following attached thereto: (i) Lease Supplement No.
1 (Federal Express Corporation Trust No. N673FE)
dated _____________ (the "Lease Supplement") between
the Owner Trustee, as lessor, and the Lessee, covering
the Aircraft; (ii) the Trust Indenture; and (iii) the
Trust Indenture Supplement, which Lease with the
foregoing attachments (collectively, the "Lease
Attachments") attached was filed at ____ _.m., C._.T.
The Confidential Omissions were intentionally omitted from
the FAA filing counterparts of the Lease and the Trust Indenture as
containing confidential financial information.
Based upon our examination of the above described
instruments and of such records of the FAA as we deemed necessary to render
this opinion, it is our opinion that:
1. the FAA ▇▇▇▇ of Sale, the Trust Indenture with the Trust
Indenture Supplement attached and the Lease with the
Lease Attachments attached are in due form for
recordation by and have been duly filed for
recordation with the FAA pursuant to and in accordance
with the provisions of 49 U.S.C. Section 44107;
2. the Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement are in due form for
filing and have been duly filed with the FAA pursuant
to and in accordance with the provisions of 49 U.S.C.
Section 44103(a) and Section 47.7(c) of the Federal
Aviation Regulations;
3. the Airframe is eligible for registration under 49 U.S.C.
Section 44102 in the name of the Owner Trustee and the
filing with the FAA of the FAA ▇▇▇▇ of Sale, the
Aircraft Registration Application, the Owner Trustee
Affidavit with the Owner Participant Affidavit
attached and the Trust Agreement will cause the FAA to
register the Airframe, in due course, in the name of
the Owner Trustee and to issue to the Owner Trustee an
AC Form 8050-3 Certificate of Aircraft Registration
for the Airframe, and the Airframe will be duly
registered pursuant to and in accordance with the
provisions of 49 U.S.C. Section 44103(a);
4. the Owner Trustee has valid legal title to the Airframe
and the Aircraft is free and clear of all Liens,
except (i) the security interest created by the Trust
Indenture, as supplemented by the Trust Indenture
Supplement, and (ii) the rights of the parties under
the Lease, as supplemented by the Lease Supplement;
5. the rights of the Owner Trustee and the Lessee under the
Lease, as supplemented by the Lease Supplement, with
respect to the Aircraft, are perfected;
6. the Trust Indenture, as supplemented by the Trust
Indenture Supplement, constitutes a duly perfected
first priority security interest in the Aircraft and a
duly perfected first assignment of all the right,
title and interest of the Owner Trustee in, to and
under the Lease and the Lease Supplement (insofar as
such assignment affects an interest covered by the
recording system established by the FAA pursuant to 49
U.S.C. Section 44107), and no other registration of
the Airframe or filings other than filings with the
FAA (which have been duly effected) are necessary in
order to perfect in any applicable jurisdiction in the
United States (A) the Owner Trustee's title to the
Airframe or (B) such security interest and assignment
(insofar as such assignment affects an interest
covered by the recording system established by the FAA
pursuant to 49 U.S.C. Section 44107), it being
understood that no opinion is herein expressed as to
the validity, priority or enforceability of such
security interest and assignment under local law or as
to the recognition of the perfection of such security
interest and assignment as against third parties in
any legal proceeding outside the United States;
7. no authorization, approval, consent, license or order of,
or registration with, or the giving of notice to, the
FAA is required for the valid authorization, delivery
and performance of the Lease, as supplemented by the
Lease Supplement, the Trust Indenture, as supplemented
by the Trust Indenture Supplement, or the Trust
Agreement except for such filings as are referred to
above; and,
8. neither the execution and delivery by the Owner
Participant of the Participation Agreement or the
Trust Agreement, nor other consummation of the
transactions contemplated thereby by the Owner
Participant, requires the consent or approval of, or
the giving of notice to, or the registration of, or
the taking of any other action in respect of the FAA,
except (x) the registration of the Airframe, including
the submission of the Aircraft Registration
Application, the Owner Trustee Affidavit, the Owner
Participant Affidavit and the Trust Agreement to the
FAA and (y) the filings for recordation specified
elsewhere in this opinion.
No opinion is expressed as to the Airframe during any period
or periods of time during which it has not been subject to United States
registration.
No opinion is expressed as to laws other than Federal laws
of the United States. In rendering this opinion, we were subject to the
accuracy of the FAA, its employees and agents, in the filing, indexing and
recording of instruments filed with the FAA and in the search for
encumbrance cross-reference index cards for the Engines. Further, in
rendering this opinion we are assuming the validity and enforceability of
the above described instruments under local law. Since our examination was
limited to records maintained by the FAA, our opinion does not cover liens
which are perfected without the filing of notice thereof with the FAA, such
as federal tax liens, liens arising under Section 1368(a) of Title 29 of
the United States Code, possessory artisan's liens, or matters of which the
parties had actual notice. In rendering this opinion we are assuming that
there are no documents with respect to the Aircraft which have been filed
for recording under the recording system of the FAA but have not yet been
listed in the available records of such system as having been so filed.
In rendering this opinion we have relied upon the opinion of
the Assistant Chief Counsel of the Aeronautical Center dated _____________,
a copy of which is attached hereto.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
For the Firm
Annex I
Certain Definitions
Airframe, Engines and Aircraft
One (1) Airbus Industrie A300F4-605R aircraft bearing
manufacturer's serial number 777 and U.S. Registration No. N673FE (the
"Airframe") and two (2) General Electric CF6-80C2-A5F aircraft engines
bearing manufacturer's serial numbers ___-___ and ___-___ (the "Engines")
(the Airframe and the Engines are referred to collectively as the
"Aircraft").
Confidential Omissions
The Lease was filed with the FAA, with (i) the Basic Rent
(Schedule II), (ii) the Stipulated Loss Values (Schedule III), (iii) the
Termination Values (Schedule IV) and (iv) the Purchase Option Schedule
(Schedule V) omitted from the FAA filing counterpart thereof as containing
confidential financial information; and (v) the purchase price under Section
4.02(a)(F) set forth in Ancillary Agreement II, which was not attached to the
FAA filing counterpart of the Lease or otherwise filed with the FAA for
recordation.
SCHEDULE A
Lessee
Federal Express Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Owner Trustee
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Indenture Trustee, Pass Through Trustee & Subordination Agent
First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Owner Participant
PMCC Leasing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Underwriters
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
First Chicago Capital Markets, Inc.
Corporate Securities
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Liquidity Provider
Kredietbank N.V., New York Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
[FORM OF LEASE AGREEMENT]
[See Exhibit 4.e]
EXHIBIT C
[FORM OF INDENTURE]
[See Exhibit 4.b.1]
EXHIBIT D
[FORM OF TRUST AGREEMENT]
[See Exhibit 4.d]
EXHIBIT E
[FORM OF PURCHASE AGREEMENT ASSIGNMENT, AIRBUS CONSENT AND
AVSA CONSENT]
[See Exhibit B to Lease Agreement under Exhibit 4.e]
EXHIBIT F
[FORM OF ENGINE WARRANTY ASSIGNMENT AND ENGINE CONSENT]
[See Exhibit C to Lease Agreement under Exhibit 4.e]
EXHIBIT G-1
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
BENEFICIAL INTEREST TRANSFER AGREEMENT (this "Document"),
dated as of _______ __, ____, between ______________, a ______________
corporation ("Transferor") and ______________, a ______________ corporation
("Transferee").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to effect (a) the
transfer by Transferor to Transferee of all of the rights, title and interest
of Transferor in and to its interest (the "Beneficial Interest") under the
Trust Agreement (Federal Express Corporation Trust No. N673FE), dated as of
May 1, 1997 (as heretofore amended, the "Trust Agreement"), between Transferor
and State Street Bank and Trust Company of Connecticut, National Association,
and the Lessor's Estate created thereunder, and all of Transferor's rights and
obligations under the Participation Agreement (Federal Express Corporation
Trust No. N673FE), dated as of May 1, 1997 (the "Participation Agreement"),
among Federal Express Corporation, as Lessee, State Street Bank and Trust
Company of Connecticut, National Association, not in its individual capacity,
except as otherwise stated therein, but solely as Owner Trustee, PMCC Leasing
Corporation, as Owner Participant, First Security Bank, National Association,
not in its individual capacity, except as otherwise stated therein, but solely
as Indenture Trustee, First Security Bank, National Association, not in its
individual capacity, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent, and under the other Operative Agreements and (b) the
acceptance by Transferee of such transfer and the assumption by Transferee of
such obligations of Transferor thereunder; and
WHEREAS, Section 7.03(d) of the Participation Agreement
permits such transfer and assumption upon satisfaction of certain conditions
heretofore or concurrently herewith being observed;
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements herein contained, the parties hereto agree
as follows:
1. Definitions. Capitalized terms used herein without
definition shall have the respective meanings ascribed thereto in the
Participation Agreement.
2. Transfer. Transferor does hereby sell, convey,
assign, transfer and set over, unto Transferee, as of the Effective Time (as
defined below), all of Transferor's present and future right, title and
interest in and to (a) all of the Beneficial Interest and (b) all of the Owner
Participant's rights and obligations under the Participation Agreement, the
Tax Indemnity Agreement, the Trust Agreement and the other Operative
Agreements and any proceeds therefrom, together with all other documents and
instruments evidencing any of such right, title and interest, except such
rights of Transferor as have arisen or accrued to Transferor prior to the
Effective Time (including without limitation, the right to receive any amounts
due or accrued to Transferor under the Operative Agreements as of a time prior
to the Effective Time and the right to receive any indemnity payment pursuant
to the Participation Agreement or the Tax Indemnity Agreement, with respect to
events occurring prior to such time); all of the foregoing that is being
transferred under this paragraph 2, the "Transferred Interest".
3. Assumption. Transferee hereby accepts the transfer
of the Transferred Interest and, for the benefit of Transferor and the other
parties to the Participation Agreement, assumes and undertakes and agrees to
perform and discharge all of the duties and obligations of Transferor with
respect to the Transferred Interest whenever and wherever accrued (other than
duties and obligations of Transferor required to be performed by it on or
prior to the Effective Time). Transferee hereby confirms that, from and after
the Effective Time, Transferee (a) shall be deemed, to the extent set forth in
Section 2 hereof, the "Owner Participant" party to the Participation
Agreement, the Tax Indemnity Agreement, the Trust Agreement and the other
Operative Agreements and (b) shall be bound by all of the terms of the
Operative Agreements to the extent the same relate to the Transferred
Interest.
4. Release of Transferor. At the Effective Time,
Transferor shall be relieved of all of its duties and obligations with respect
to the Transferred Interest under the Operative Agreements, provided, however,
that Transferor shall in no event be released from any such duty or
obligations arising or relating to any event occurring prior to the Effective
Time, or on account of any breach by Transferor of any of its representations,
warranties, covenants or obligations set forth in the Operative Agreements, or
for any fraudulent or willful misconduct engaged in by it prior to the
Effective Time, or from any obligation that relates to any indemnity claimed
by Transferor or any Lessor's Lien attributable to Transferor.
5. Fees and Expenses. The fees, expenses and charges
of the parties to the Participation Agreement incurred in connection with the
transfer effected hereby shall be for the account of [specify
Transferor/Transferee].
6. Payments. Transferor hereby covenants and agrees
to pay over to Transferee, if and when received following the Effective
Time, any amounts (including any sums payable as interest in respect
thereof) paid on account of the Transferred Interest to or for the benefit
of Transferor, and Transferee hereby covenants and agrees to pay over to
Transferor, if and when received following the Effective Time, any amounts
(including any sums payable as interest in respect thereof) paid to or for
the benefit of Transferee that are not attributable to the Transferred
Interest and to which Transferor is otherwise entitled.
7. Investment Purpose. Transferee hereby represents
and warrants that, as of the date hereof, it is acquiring the Transferred
Interest for its account with no present intention of distributing such
Transferred Interest or any part thereof in any manner which would violate
the Securities Act of 1933, as amended, but without prejudice, however, to
the right of Transferee at all times to sell or otherwise dispose of all or
any part of such Transferred Interest in compliance with Section 7.03(d) of
the Participation Agreement.
8. Representations and Warranties of Transferor.
Transferor represents and warrants to Transferee that as of the Effective
Time:
(a) Organization and Power. Transferor is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions").
(b) Authorization, Execution and Validity. This Agreement
has been duly authorized, executed and delivered by Transferor and
constitutes the legal, valid and binding obligation of Transferor,
enforceable against it in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity.
(c) Conflict. The execution, delivery and performance by
Transferor of this Agreement and compliance by Transferor with all
of the provisions hereof do not contravene any regulation or any
order of any governmental authority applicable to or binding on
Transferor, or contravene the provisions, or constitute a default
by Transferor under, its certificate of incorporation or by-laws
or any indenture, mortgage, contract or other agreement or
instrument to which Transferor is a party or by which Transferor
or any of its Properties is bound or affected.
(d) Consents. No consent, approval or authorization of, or
filing, registration or qualification with, or the giving of
notice or the taking of any other action with respect to, any
governmental authority on the part of Transferor is required in
connection with the execution, delivery and performance by
Transferor of this Agreement.
(e) Litigation. There are no proceedings pending or, to
the knowledge of Transferor, threatened against Transferor before
any governmental authority that would materially and adversely
affect the ability of Transferor to consummate the Transactions.
(f) No Liens. The Trust Estate is free of Lessor's Liens
attributable to Transferor.
(g) Compliance with Operative Agreements. Transferor has
fully performed all of its obligations under the Participation
Agreement and under each other Operative Agreement which
obligations by their terms are required to be satisfied or
performed prior to the Effective Time or prior to the consummation
of the Transactions.
(h) Default. As a result of the transfer effected hereby,
no Indenture Default attributable to the Owner Participant or the
Owner Trustee has occurred and is continuing.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft.
9. Representations and Warranties of Transferee.
Transferee represents and warrants to Transferor and to the other parties
to the Participation Agreement that as of the Effective Time:
(a) Transferee is a corporation duly organized, validly
existing and in good standing under the laws of the State of [ ],
has the full corporate power, authority and legal right to carry
on its business as now conducted, and has full corporate power,
authority and legal right to execute, deliver and perform this
Agreement and to enter into and carry out the transactions
contemplated hereby and in the other Operative Agreements (the
"Transactions");
(b) Transferee has full corporate power, authority and
legal right to execute, deliver and enter into this Agreement and
the other Operative Agreements and full corporate power and
authority to perform its obligations thereunder, and such
execution, delivery and performance do not and will not contravene
any applicable law or any order of any governmental authority
applicable to or binding on the Transferee, or contravene the
provisions of, or constitute a default under, or result in the
creation of any Lien upon the property of the Transferee under,
its articles of incorporation or by-laws or any material
indenture, mortgage, contract or other agreement or instrument to
which the Transferee is a party or by which it or any of its
property may be bound or affected;
(c) the execution, delivery and performance of this
Agreement by the Transferee (i) has been duly authorized by all
necessary corporate action and (ii) does not require any approval
of the shareholders of the Transferee or any approval or consent
of, or notice to, any trustee or holders of any indebtedness or
obligation of the Transferee, except for such approvals and
consents as have already been obtained;
(d) this Agreement has been duly executed and delivered by
the Transferee, and constitutes the legal, valid and binding
obligation of the Transferee, enforceable against the Transferee
in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and by general
principles of equity;
(e) there are no proceedings or actions pending or, to the
knowledge of the Transferee, threatened against the Transferee
before any governmental authority in which there is a reasonable
probability of an adverse determination that individually or in
the aggregate would materially and adversely impair the ability of
the Transferee to perform its obligations under this Agreement or
the Operative Agreements, or which involve the Transactions or
question the validity of any Operative Agreement to which the
Owner Participant is a party or any action taken or to be taken
pursuant thereto; and the Transferee is not in default with
respect to any order of any governmental authority which involves
the Transactions or the default under which would materially and
adversely affect the ability of the Transferee to perform its
obligations under this Agreement or any of the Operative
Agreements;
(f) no consent, approval, order or authorization of, giving
of notice to, or registration with, or taking of any other action
in respect of, any governmental authority is required under any
law for the execution and delivery by the Transferee of this
Agreement, or the carrying out by the Transferee of any of the
Transactions, other than any such consent, approval, order,
authorization, registration, notice or action as has been duly
obtained, given or taken;
(g) the Lessor's Estate is free of any Lessor's Liens
attributable to the Transferee;
(h) the Transferee, upon execution of this Agreement, will
not be in default under any of the Operative Agreements;
(i) no part of the funds to be used by it to acquire the
interests acquired by the Owner Participant under the
Participation Agreement constitutes assets (within the meaning of
ERISA and any applicable rules and regulations) of any employee
benefit plan subject to Title I of ERISA or of any plan or
individual retirement account subject to Section 4975 of the Code;
(j) Transferee is a "U.S. Person" as defined in Section
7701(a)(30) of the Code and is not a tax resident of another
country and if it shall at any time cease to be such a "U.S.
Person" or shall become a tax resident of another country, it
shall furnish to the Agent and each Certificate Holder an
indemnity, in form and substance reasonably satisfactory to such
Certificate Holder, for any Taxes that may be imposed on such
Holder as a result of its failure to be such a "U.S. Person" or
as a result of its being a tax resident of another country, and it
shall be personally liable for any debt service to the extent that
the receipt of rentals is reduced by reason of any withholding
Taxes that result from such failure to be such a "U.S. Person" or
from being a tax resident of another country;
(k) [After giving effect to a voting trust or similar
agreement(*), Transferee is a Citizen of the United States]
[applicable if Aircraft is registered in the United States or is
proposed to be so registered]
------------
(*) Such voting trust or similar agreement must be reasonably satisfactory
to the Lessor and the Indenture Trustee.
(l) On and as of the Effective Date, the representations
and warranties of the Owner Participant in Article 7 of the
Participation Agreement are true and correct as to the Transferee;
and
(m) Transferee satisfies the conditions applicable to a
transferee of the Beneficial Interest set forth in Section 7.03(d)
of the Participation Agreement, including without limitation, the
condition set forth in the last sentence thereof [and to the
extent the same has been requested by the Lessee or the Indenture
Trustee, Transferee has heretofore provided to the Lessee and the
Indenture Trustee its most recent audited financial statements,
which show a consolidated tangible net worth or combined capital
and surplus of at least $75,000,000] [remove bracketed language if
an Owner Participant Guaranty is provided].
(n) the Transferee has, independently and without reliance
upon any other party (including without limitation the Transferor)
and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement, and the Transferee has established adequate
means of obtaining from Lessee on a continuing basis information
pertaining to, and is now and on a continuing basis will be
completely familiar with, the financial condition, operations,
properties and prospects of Lessee.
Notwithstanding the foregoing or anything else contained in
this Agreement, it makes no representation or warranty in this Agreement
with respect to laws, rules or regulations relating to aviation or to the
nature or use of the equipment owned by the Owner Trustee, including,
without limitation, the airworthiness, value, condition, workmanship,
design, patent or trademark infringement, operation, merchantability or
fitness for use of the Aircraft, other than such laws, rules or regulations
relating to the citizenship requirements of it under applicable aviation
law.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 11.
Effectiveness. This Agreement shall be effective upon the mutual execution
and delivery of this Agreement (the "Effective Time").
12. Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall constitute a single
instrument. It shall not be necessary that any counterpart be signed by
both parties so long as each party shall sign at least one counterpart.
13. Beneficiaries. Each of the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Lessee, together with
their respective successors and permitted assigns, is and shall be deemed a
third party beneficiary of this Agreement entitled to enforce this
Agreement directly and in its own name and enforce any rights or claims of
the parties hereto.
14. Further Assurances. Each party agrees that from
time to time after the Effective Time, it shall execute and deliver or
cause to be executed and delivered such instruments, documents and papers,
and take all such further action as may be reasonably required in order to
consummate fully the purposes of this Agreement and to implement the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
[TRANSFEROR]
By:___________________________
Name:
Title:
[TRANSFEREE]
By:___________________________
Name:
Title:
EXHIBIT G-2
FORM OF OWNER PARTICIPANT GUARANTY
TRANSFEREE'S PARENT GUARANTY, dated as of ___________
__, ____, (this "Guaranty") by ____________________, a ___________
corporation (the "Guarantor"), to State Street Bank and Trust Company of
Connecticut, National Association, in its individual capacity and as Owner
Trustee, First Security Bank, National Association, as Indenture Trustee
and Pass Through Trustee, and Federal Express Corporation, as Lessee
(collectively, together with their successors and assigns and the holders
from time to time of the Certificates, the "Beneficiaries").
W I T N E S S E T H :
WHEREAS, ___________, a ____________ corporation (the
modified or supplemented from time to time, the "Participation Agreement"),
among Federal Express Corporation, as Lessee, PMCC Leasing Corporation, as
Owner Participant, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual, except as otherwise stated
therein, but solely as Owner Trustee, First Security Bank, National
Association, not in its individual, except as otherwise stated therein, but
solely as Indenture Trustee, First Security Bank, National Association, not
in its individual, except as otherwise stated therein, but solely as Pass
Through Trustee and First Security Bank, National Association, as
Subordination Agent; and
WHEREAS, the Transferor wishes to transfer, among
other things, all of the rights, title and interest of the Transferor in
and to the Beneficial Interest under the Trust Agreement and the Lessor's
Estate created thereunder, and all of the Transferor's rights and
obligations under the Participation Agreement, the Trust Agreement and the
other Operative Agreements to __________________, a _______________
[corporation] (together with its successors and assigns, the "Transferee"),
a subsidiary of the Guarantor, pursuant to the Beneficial Interest Transfer
Agreement, dated as of the date hereof (the "Transfer Agreement"), between
the Transferor and the Transferee; and
WHEREAS, the terms of the Participation Agreement
provide that the aforementioned transfer is conditioned upon the execution
and delivery of this Guaranty by the Guarantor;
NOW, THEREFORE, in order that the Transferor may make
the aforementioned transfer to the Transferee, the Guarantor hereby agrees
with and for the benefit of the Beneficiaries as follows:
1. Definitions. Capitalized terms used herein
without definition shall have the respective meanings assigned thereto in
the Participation Agreement or the Transfer Agreement.
2. Guaranty. The Guarantor hereby unconditionally
and irrevocably guarantees, as primary obligor and not merely surety, to
the Beneficiaries the prompt and complete payment by the Transferee when
due of all payment obligations of the Transferee under the Operative
Agreements without offset or deduction and the timely performance of all
other obligations of the Transferee thereunder (such payment and other
obligations, the "Obligations"), and the Guarantor further agrees to pay
any and all expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be paid or incurred by the Beneficiaries in
enforcing any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting
against, the Guarantor under this Guaranty.
The Guarantor will not exercise any rights that it may
now or hereafter acquire against Transferee that arise from the existence,
payment, performance or enforcement of the Guarantor's Obligations under
this Guaranty, the Transferred Interest or the Operative Agreements,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate
in any claim or remedy of any Beneficiary against Transferee or any
collateral, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the
right to take or receive from Transferee, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security
on account of such claim, remedy or right, unless and until all of the
Obligations have been performed in full and all other amounts payable under
this Guaranty shall have been paid in full in cash. If any amount shall be
paid to the Guarantor in violation of the preceding sentence at any time
prior to the final payment in full in cash of the Obligations and all other
amounts payable under this Guaranty, such amount shall be held in trust for
the benefit of any Beneficiary and shall forthwith be paid to such
Beneficiary to be credited and applied to the Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Operative Agreements, or to be held as
collateral for any Obligations or other amounts payable under this Guaranty
thereafter arising.
3. No Subrogation. Notwithstanding anything to the
contrary in this Guaranty, the Guarantor hereby agrees not to assert any
rights which may have arisen in connection with this Guaranty to be
subrogated to any of the rights (whether contractual, under the Bankruptcy
Code, under common law or otherwise) of any Beneficiary against the
Transferee for the payment of the Obligations until all of the Obligations
shall have been satisfied by payment and performance in full.
4. Amendments with Respect to the Obligations;
Waiver of Rights. The Guarantor shall remain fully obligated hereunder
notwithstanding that, without any reservation of rights against the
Guarantor and without notice to or further assent by the Guarantor, any
demand for payment or performance of any of the Obligations made by any
Beneficiary may be rescinded by such party and any of the obligations
continued, and the Obligations, may, from time to time, in whole or part,
be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by any Beneficiary and any Operative Agreement may
be amended, modified, supplemented or terminated, in whole or in part, in
accordance with the provisions thereof from time to time. When making any
demand hereunder against the Guarantor, a Beneficiary may, but shall be
under no obligation to, make a similar demand on the Transferee, and any
failure by a Beneficiary to make any such demand or to collect any payments
from the Transferee or any release of the Transferee shall not relieve the
Guarantor of its obligations or liabilities hereunder, and shall not impair
or affect the rights and remedies, express or implied, or as a matter of
law, of any Beneficiary against the Guarantor. For the purposes hereof,
"demand" shall include the commencement and continuance of any legal
proceedings. The Guarantor represents and warrants that it is the parent
of the Transferee, and agrees that its obligations hereunder shall continue
unimpaired, even if the Guarantor is no longer an Affiliate of the
Transferee.
5. Guaranty Absolute and Unconditional. The
Guarantor guarantees that the Obligations will be paid and performed
strictly in accordance with the terms of the Transfer Agreement and the
Operative Agreements, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any such terms or the
rights of any Beneficiary with respect thereto. The obligations of the
Guarantor under this Guaranty are independent of the Obligations or any
other obligations of any other party, and a separate action or actions may
be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether the Transferee or any other party is joined in any
such action or actions. The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by any Beneficiary upon this Guaranty or
acceptance of this Guaranty; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guaranty; and
all dealings between the Transferee or the Guarantor and any Beneficiary
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantor waives, to the fullest extent
permitted by applicable law, diligence, presentment, promptness, protest,
mitigation of damages by the Beneficiaries demand for payment and notice of
default or nonpayment to or upon the Transferee or the Guarantor with
respect to the Obligations. The Guarantor further waives any right to
revoke this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Obligations, whether existing now or in the
future. The Guarantor understands and agrees that, to the fullest extent
permitted by applicable law, this Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment and performance
(and not merely of collectibility) without regard to:
(a) the validity, regularity or enforceability of the
Transfer Agreement, any Operative Agreement, or any of the
Obligations at any time or from time to time held by any
Beneficiary;
(b) any defense, set-off, rebate, adjustment, withholding,
deduction or counterclaim (other than a defense of payment or
performance) that may at any time be available to or be asserted
by the Transferee against any Beneficiary or any agreement or
instrument relating thereto or;
(c) any change in the time, manner or place of payment of,
or in any other term of, all or any of the obligations or any
other obligations of any other party under the Transfer Agreement,
the Operative Agreements, or any other amendment or waiver of or
any consent to departure from the Transfer Agreement or other
Operative Agreements;
(d) any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the
Obligations;
(e) any change, restructuring or termination of the
corporate structure or existence of the Guarantor or the
Transferee or any of the Affiliates of either;
(f) any defect in the title, condition, design, operation or
fitness of, or any interference with the operation, use or
possession of, the Aircraft;
(g) any failure to establish, perfect or preserve title to
or any security interest in or to the Aircraft or any other
collateral security for the Obligations; or
(h) any other circumstance whatsoever or any existence of or
reliance on any representation by any Beneficiary that might
otherwise constitute a defense available to, or a discharge of,
the Guarantor or any other guarantor or surety.
When pursuing its rights and remedies hereunder against the
Guarantor, any Beneficiary may, but shall be under no obligation to, pursue
such rights and remedies as it may have against the Transferee for the
Obligations, and any failure by any Beneficiary to pursue such other rights
or remedies or to collect any payments from the Transferee, or any release
of the Transferee, shall not, to the fullest extent permitted by applicable
law, relieve the Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as
a matter of law, of any Beneficiary against the Guarantor. This Guaranty
is a continuing guaranty and shall remain in full force and effect until
the earlier of (x) the date that all of the Obligations are satisfied by
payment and performance in full and (y) the date that all right, title and
interest of the Transferee shall have been transferred to a Person meeting
the requirements of Section 7.03(d) of the Participation Agreement in
accordance with said section; provided that this Guaranty shall remain in
full force and effect with respect to obligations relating to the period
prior to such transfer.
6. Reinstatement. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise
be restored or returned by any Beneficiary upon the insolvency, bankruptcy
dissolution, liquidation or reorganization of the Transferee or the
Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the
Transferee or the Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made and the Guarantor
agrees that it will indemnify any such Beneficiary on demand for all
reasonable costs and expenses (including, without limitation, reasonable
fees and expenses of counsel) by such Beneficiary in connection with such
rescission or restoration.
7. Payments. The Guarantor hereby guarantees that
payments hereunder shall be paid without set-off, counterclaim, deduction,
rebate, adjustment or withholding, and shall be made in U.S. Dollars in
immediately available funds.
8. Representations and Warranties. The Guarantor
hereby represents and warrants that:
(a) the Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and the Transferee is currently a subsidiary
of the Guarantor;
(b) the Guarantor has the power and authority and the legal
right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary corporate action
to authorize its execution, delivery and performance of this
Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally;
(d) the execution, delivery and performance of this Guaranty
will not violate any provision of any requirement of law or
contractual obligation of the Guarantor or any of its constitutive
documents;
(e) no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or governmental authority
and no consent of any other person is required in connection with
the execution, delivery, performance, validity or enforceability
of this Guaranty;
(f) the Guarantor is a [a bank, savings institution, finance
company, leasing company or trust company, national banking
association acting for its own account or in a fiduciary capacity
as trustee or agent under any pension, retirement, profit sharing
or similar trust or fund, insurance company, fraternal benefit
society or corporation acting for its own account having a
combined capital and surplus (or, if applicable, consolidated
tangible net worth or its equivalent)] of not less than
$75,000,000 [and has, if the same have been requested by the
Lessee or the Indenture Trustee, heretofore furnished to the
Lessee and the Indenture Trustee copies of its most recent audited
financial statements];
(g) there are no conditions precedent to the effectiveness
of this Guaranty that have not been satisfied or waived; and
(h) the Guarantor has, independently and without reliance
upon any Beneficiary and based on such documents and information
as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty, and the Guarantor has
established adequate means of obtaining from Transferee on a
continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the financial
condition, operations, properties and prospects of Transferee.
9. Severability. Any provision of this Guaranty that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
10. Jurisdiction; Waiver of Jury Trial, Etc.
(a) The Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United
States of America sitting in New York, New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to
this Guaranty, the Transfer Agreement or any Operative Agreement to which
it is or is to be a party, or for recognition or enforcement of any
judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted
by law, in such federal court. The Guarantor agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Guaranty shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Guaranty,
the Transfer Agreement or any Operative Agreement to which it is or is to
be a party in the courts of any jurisdiction.
(b) The Guarantor irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Guaranty, the
Transfer Agreement or any Operative Agreement to which it is or is to be a
party in any New York State or federal court. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in
any such court.
11. Section Headings. The Section headings used in
this Guaranty are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the
interpretation hereof.
12. No Waiver; Cumulative Remedies. No Beneficiary
shall by any act (except by a written instrument pursuant to Section 13
hereof), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any breach of any of
the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Beneficiary, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right power or
privilege. A waiver by a Beneficiary of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy
that such Beneficiary would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by
law.
13. Amendments and Waivers. None of the terms or
provisions of this Guaranty may be waived, amended or supplemented or
otherwise modified except by a written instrument executed by the Guarantor
and each Beneficiary.
14. Successors and Assigns. This Guaranty shall be
binding upon the successors and assigns of the Guarantor and shall inure to
the benefit of the Beneficiaries and their respective successors and
permitted assigns but Guarantor may not assign this Guaranty without prior
written consent of the Beneficiaries except to an assignee making, as of
the date of such assignment, (i) representations and warranties
substantially similar to those contained in Section 8 hereof and (ii) a
representation that it is a U.S. citizen, unless, in the case of the
preceding clause (ii) any of (a) the aircraft is not then registered in the
United States nor contemplated to be so registered or (b) a voting trust or
similar arrangement reasonably satisfactory to the Beneficiaries is in
place with respect to such registration or (c) it is not necessary for the
Guarantor to be a U.S. citizen in order for the aircraft to remain
registered in the United States.
15. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED
BY AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK.
16. Notices. All notices, requests and demands to or
upon the Guarantor or any Beneficiary to be effective shall be in writing
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made, when delivered by hand or by mail, upon receipt,
or, when delivered by facsimile transmission, upon being sent and
confirmed, addressed (a) in the case of the Guarantor, to the Guarantor at
its office at [_________________________________], and (b) in the case of
any Beneficiary, to such Beneficiary at the address provided for such
Beneficiary in or pursuant to the Participation Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to
be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
[NAME OF GUARANTOR]
_________________________________
Name:
Title:
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N674FE)
Dated as of May 1, 1997
among
FEDERAL EXPRESS CORPORATION,
Lessee
PMCC LEASING CORPORATION,
Owner Participant
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Not in Its Individual Capacity
Except as Otherwise Expressly
Set Forth Herein, but Solely as Owner Trustee,
Owner Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Indenture Trustee
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Pass Through Trustee
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
Subordination Agent
______________________________
LEVERAGED LEASE OF ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 781, REGISTRATION NO. N674FE
TABLE OF CONTENTS
Page
Initial Recitals........................................................... 1
ARTICLE 1
DEFINITIONS............................................................. 3
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds........................................ 4
Section 2.02. Certificates............................................. 5
Section 2.03. Owner Participant's Instructions to Owner Trustee........ 5
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent, Stipulated
Loss Values and Termination Values....................... 5
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date......................... 6
Section 3.02. Commitments to Participate in Purchase Price............. 6
Section 3.03. Owner Participant's Instructions to Owner Trustee........ 9
Section 3.04. Transaction Costs........................................ 9
Section 3.05. Postponement of Delivery Date............................ 9
Section 3.06. Closing.................................................. 11
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date).......... 11
Section 4.02. Conditions Precedent (Delivery Date)..................... 20
Section 4.03. Opinion of Special Aviation Counsel Upon Registration.... 28
ARTICLE 5
CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS
Section 5.01. Conditions Precedent to Lessee's Obligations............. 28
ARTICLE 6
LESSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 6.01. Lessee's Representations and Warranties.................. 29
Section 6.02. Offering by Lessee....................................... 35
Section 6.03. Certain Covenants of Lessee.............................. 36
Section 6.04. Survival of Representations and Warranties............... 43
ARTICLE 7
OTHER PARTIES' REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.01. Acquisitions and Offerings of Interests in Lessor's
Estate................................................... 44
Section 7.02. Citizenship.............................................. 44
Section 7.03. Representations, Warranties and Covenants of Owner
Participant.............................................. 45
Section 7.04. Representations, Covenants and Warranties of SSB and the
Owner Trustee............................................ 50
Section 7.05. Representations, Warranties and Covenants of the Indenture
Trustee.................................................. 53
Section 7.06. Indenture Trustee's Notice of Default.................... 54
Section 7.07. Releases from Indenture.................................. 54
Section 7.08. Covenant of Quiet Enjoyment.............................. 54
Section 7.09. Pass Through Trustee's Representations and Warranties.... 54
Section 7.10. Survival of Representations, Warranties and Covenants.... 55
Section 7.11. Lessee's Assumption of the Certificates.................. 56
Section 7.12. Indebtedness of Owner Trustee............................ 58
Section 7.13. Compliance with Trust Agreement, Etc..................... 58
Section 7.14. Subordination Agent's Representations, Warranties and
Covenants................................................ 58
ARTICLE 8
TAXES
Section 8.01. Lessee's Obligation to Pay Taxes......................... 60
Section 8.02. After-Tax Basis.......................................... 66
Section 8.03. Time of Payment.......................................... 66
Section 8.04. Contests................................................. 67
Section 8.05. Refunds.................................................. 69
Section 8.06. Lessee's Reports......................................... 69
Section 8.07. Survival of Obligations.................................. 70
Section 8.08. Payment of Taxes......................................... 70
Section 8.09. Reimbursements by Indemnitees Generally.................. 70
Section 8.10. Special Indemnity........................................ 71
ARTICLE 9
GENERAL INDEMNITY
Section 9.01. Generally................................................ 71
Section 9.02. After-Tax Basis.......................................... 75
Section 9.03. Subrogation.............................................. 75
Section 9.04. Notice and Payment....................................... 75
Section 9.05. Refunds.................................................. 75
Section 9.06. Defense of Claims........................................ 76
Section 9.07. Survival of Obligations.................................. 77
Section 9.08. Effect of Other Indemnities.............................. 77
Section 9.09. Interest................................................. 77
Section 9.10. Special Indemnity........................................ 78
ARTICLE 10
TRANSACTION COSTS
Section 10.01. Transaction Costs and Other Costs....................... 78
ARTICLE 11
SUCCESSOR OWNER TRUSTEE
Section 11.01. Appointment of Successor Owner Trustee.................. 80
ARTICLE 12
LIABILITIES AND INTERESTS OF THE OWNER PARTICIPANT AND HOLDERS
Section 12.01. Liabilities of the Owner Participant.................... 82
Section 12.02. Interest of Holders of Certificates..................... 82
ARTICLE 13
OTHER DOCUMENTS
Section 13.01. Consent of Lessee to Other Documents.................... 82
Section 13.02. Further Assurances...................................... 83
Section 13.03. Pass Through Trustee's and Subordination Agent's
Acknowledgment.......................................... 83
ARTICLE 14
NOTICES
Section 14.01. Notices................................................. 83
ARTICLE 15
REFINANCING/REOPTIMIZATION
Section 15.01. Refinancing............................................. 84
Section 15.02. Reoptimization.......................................... 88
ARTICLE 16
[RESERVED]
ARTICLE 17
MISCELLANEOUS
Section 17.01. Owner for Federal Tax Purposes.......................... 89
Section 17.02. Collateral Account...................................... 89
Section 17.03. Counterparts............................................ 90
Section 17.04. No Oral Modifications................................... 90
Section 17.05. Captions................................................ 91
Section 17.06. Successors and Assigns.................................. 91
Section 17.07. Concerning the Owner Trustee, Indenture Trustee and the
Pass Through Trustee.................................... 91
Section 17.08. Severability............................................ 92
Section 17.09. Public Release of Information........................... 92
Section 17.10. Certain Limitations on Reorganization................... 92
Section 17.11. GOVERNING LAW........................................... 93
Section 17.12. Section 1110 Compliance................................. 93
Section 17.13. Reliance of Liquidity Providers......................... 93
ARTICLE 18
CONFIDENTIALITY
Section 18.01. Confidentiality......................................... 93
SCHEDULE I Certificate Information
SCHEDULE II Definitions
SCHEDULE III Permitted Country List
SCHEDULE IV Debt Portion
EXHIBIT A(1)(a)(i) Opinion of Lessee's Counsel
(Certificate Closing Date)
EXHIBIT A(1)(a)(ii) Opinion of Lessee's Counsel
(Delivery Date)
EXHIBIT A(1)(b)(i) Opinion of Lessee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(1)(b)(ii) Opinion of Lessee's Special Counsel
(Delivery Date)
EXHIBIT A(2)(a) Opinion of Owner Participant's and Owner Participant
Guarantor's Special Counsel
EXHIBIT A(2)(b) Opinion of Owner Participant's and Owner Participant
Guarantor's Counsel
EXHIBIT A(3) Opinion of Indenture Trustee's Special Counsel
EXHIBIT A(4)(a)(i) Opinion of Owner Trustee's Special Counsel
(Certificate Closing Date)
EXHIBIT A(4)(a)(ii) Opinion of Owner Trustee's Special Counsel
(Delivery Date)
EXHIBIT A(5) Opinion of Pass Through Trustee's and Subordination
Agent's Special Counsel
EXHIBIT A(6)(a) Opinion of Liquidity Provider's Counsel
EXHIBIT A(6)(b) Opinion of Liquidity Provider's Special Counsel
EXHIBIT A(7) Opinion of Engine Manufacturer's Counsel
EXHIBIT A(8) Opinion of Manufacturer's and AVSA's Counsel
EXHIBIT A(9) Opinion of Special Aviation Counsel
EXHIBIT B Form of Lease Agreement
EXHIBIT C Form of Indenture
EXHIBIT D Form of Trust Agreement
EXHIBIT E Form of Purchase Agreement Assignment, Consent and
Agreement, AVSA Consent and Agreement
EXHIBIT F Form of Engine Warranty Assignment and Engine Consent
EXHIBIT G-1 Form of Assignment and Assumption Agreement
EXHIBIT G-2 Form of Owner Participant Guaranty
PARTICIPATION AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N674FE)
PARTICIPATION AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO.
N674FE) dated as of May 1, 1997 (this "Agreement") among FEDERAL EXPRESS
CORPORATION, a Delaware corporation (herein, together with its successors and
permitted assigns, the "Lessee"), PMCC LEASING CORPORATION, a Delaware
corporation (herein, together with its successors and permitted assigns, the
"Owner Participant"), STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as otherwise expressly stated herein, but solely as owner
trustee under the Trust Agreement referred to below (in such capacity as
trustee, together with its successors and permitted assigns, the "Owner
Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as otherwise expressly
stated herein, but solely as indenture trustee under the Indenture referred to
below (in such capacity as trustee, together with its successors and permitted
assigns, the "Indenture Trustee"), FIRST SECURITY BANK, NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity, except as
otherwise expressly stated herein, but solely as pass through trustee of three
separate Pass Through Trusts (in such capacity as trustee, together with its
successors and permitted assigns, the "Pass Through Trustee"), and FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity, except as otherwise expressly stated herein, but solely as
subordination agent (in such capacity as trustee, together with its successors
and permitted assigns, the "Subordination Agent").
W I T N E S S E T H :
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article 1 hereof.
WHEREAS, the Owner Participant has entered into the Trust Agreement
with the Owner Trustee in its individual capacity, substantially in the form
of Exhibit D hereto, pursuant to which Trust Agreement the Owner Trustee
agrees, among other things, to hold the Lessor's Estate for the benefit of the
Owner Participant on the terms specified in the Trust Agreement, subject to
the Lien of the Indenture.
WHEREAS, on the Pass Through Closing Date, a closing will occur
with respect to the public offering of Pass Through Certificates issued by
each Pass Through Trust, an allocable amount of the proceeds of which
offering will be used by the Pass Through Trustee to purchase for each such
Pass Through Trust the Certificates of the Series and Maturity applicable
thereto.
WHEREAS, on the Certificate Closing Date, the Owner Trustee and the
Indenture Trustee will enter into the Indenture for the benefit of the Pass
Through Trustee, pursuant to which the Owner Trustee is issuing the
Certificates to the Subordination Agent on behalf of the Pass Through Trustee
as evidence of the loans made by the Pass Through Trustee to the Owner
Trustee, the proceeds of which loans will be deposited by the Indenture
Trustee on behalf of the Owner Trustee in the Collateral Account.
WHEREAS, concurrently with the execution and delivery hereof, (i)
Kredietbank N.V., acting through its New York Branch will enter into two
revolving credit agreements (each, a "Liquidity Facility"), one for the
benefit of the holders of Pass Through Certificates of each of the Pass
Through Trusts for the Series A Certificates and the Series B Certificates,
with the Subordination Agent, as agent for the Pass Through Trustee on behalf
of each such Pass Through Trust; and (ii) the Pass Through Trustee, each
Liquidity Provider and the Subordination Agent will enter into the
Intercreditor Agreement.
WHEREAS, the Certificates will be held by the Subordination Agent
pursuant to the Intercreditor Agreement on behalf of the Pass Through Trustee
for each of the Pass Through Trusts.
WHEREAS, prior to the Delivery Date, the Certificates will be secured
by the Liquid Collateral.
WHEREAS, pursuant to the terms of the Trust Agreement, the Owner
Trustee will be authorized and directed by the Owner Participant:
(a) on the Delivery Date, to purchase the Aircraft from AVSA;
(b) on the Certificate Closing Date, to execute and deliver the
Lease substantially in the form of Exhibit B hereto, pursuant to which,
subject to the terms and conditions set forth in said Lease, the Owner
Trustee agrees to lease to the Lessee, and the Lessee agrees to lease from
the Owner Trustee, the Aircraft on the Delivery Date, such lease to be
effected by the execution and delivery on the Delivery Date of a Lease
Supplement, in the form of Exhibit A to the Lease, covering the Aircraft
and incorporating by reference all of the terms of the Lease;
(c) on the Certificate Closing Date, to execute and deliver the
Indenture, substantially in the form of Exhibit C hereto, for the benefit
of the Holders from time to time of the Certificates, pursuant to which the
Owner Trustee agrees, among other things, (A) to deposit, mortgage and
pledge with the Indenture Trustee, as part of the Trust Indenture Estate,
all of the Lessor's Estate but not Excepted Payments, (B) on the
Certificate Closing Date, to issue Certificates substantially in the form
set forth in Exhibit B to the Indenture, the proceeds of the sale of which
will be held by the Indenture Trustee on behalf of the Owner Trustee in
the Collateral Account until released in accordance with the terms
hereof and of the Indenture, and (C) on the Delivery Date, to execute
and deliver the Indenture and Security Agreement Supplement,
substantially in the form of Exhibit A to the Indenture, covering the
Aircraft and supplementing the Indenture;
(d) on the Certificate Closing Date, to execute and deliver the
Purchase Agreement Assignment, whereby the Lessee assigns to the Owner
Trustee the right to purchase the Aircraft from AVSA and certain of the
Lessee's rights and interests under the Purchase Agreement and the Consent
and Guaranty to the extent that the same relate to the Aircraft (except to
the extent reserved in said Purchase Agreement Assignment), which Purchase
Agreement Assignment is to include as an annex a Consent and Agreement
executed by the Manufacturer and the AVSA Consent and Agreement executed by
AVSA, said Purchase Agreement Assignment, Consent and Agreement and AVSA
Consent and Agreement to be substantially in the form of Exhibit E hereto;
and
(e) on the Certificate Closing Date, to execute and deliver the
Engine Warranty Assignment, whereby the Lessee assigns to the Owner Trustee
certain of the Lessee's rights and interests under the GTA to the extent
that the same relate to the Engines (except to the extent reserved in the
Engine Warranty Assignment), which Engine Warranty Assignment is to include
as an annex an Engine Consent executed by the Engine Manufacturer, said
Engine Warranty Assignment and Engine Consent to be substantially in the
form of Exhibit F hereto.
WHEREAS, on the Delivery Date pursuant to and subject to the terms
and conditions of this Agreement, the Purchase Agreement Assignment, the
Engine Warranty Assignment, AVSA's FAA ▇▇▇▇ of Sale, AVSA's Warranty ▇▇▇▇
of Sale and the Airbus Guaranty, the Owner Trustee will purchase, and
receive title to, the Aircraft from AVSA and lease the Aircraft to the
Lessee pursuant to the Lease.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Unless otherwise specifically provided herein, the definitions set
forth in Schedule II hereto are incorporated herein for all purposes of this
Agreement and shall be equally applicable to both the singular and the plural
forms of the terms so defined.
ARTICLE 2
ISSUANCE OF PASS THROUGH CERTIFICATES;
ISSUANCE AND PURCHASE OF CERTIFICATES
Section 2.01. Transfer of Funds.
(a) On or before the Pass Through Closing Date, the Pass Through
Trustee and the Lessee, in accordance with the Pass Through Agreement, shall
enter into the Series Supplements, and, subject to the terms and conditions
set forth therein, on the Pass Through Closing Date (i) the Lessee shall
direct the Underwriters to execute a wire transfer or intra-bank transfer to
the Pass Through Trustee in the amount of the total proceeds payable pursuant
to the Underwriting Agreement with respect to the Pass Through Certificates
and (ii) the Pass Through Trustee shall deliver the Pass Through Certificates
to the Underwriters upon receipt by the Pass Through Trustee of such proceeds.
(b) Subject to the satisfaction or waiver of the conditions set
forth herein, on the Certificate Closing Date, on behalf of each Pass Through
Trust, from an allocable amount of the proceeds of the sale of the related
Pass Through Certificates, the Pass Through Trustee shall purchase the
Certificates specified for such Pass Through Trust on Schedule I hereto. For
each Pass Through Trust, the Pass Through Trustee shall pay an amount equal to
the principal amount of Certificates of the Series and Maturity that relates
to such Pass Through Trust, which amounts in the aggregate shall equal the
aggregate principal amount of the Certificates as specified in Section 2.04 of
the Indenture. The aggregate amount payable by the Pass Through Trustee
pursuant to this Section 2.01(b) shall be payable by wire transfer or
intra-bank transfer to the Indenture Trustee on behalf of the Owner Trustee.
(c) On the Certificate Closing Date, the Indenture Trustee shall,
on behalf of the Owner Trustee, deposit, by wire transfer or intra-bank
transfer, the amounts received by it pursuant to Section 2.01(b) hereof in the
Collateral Account pursuant to the Indenture.
(d) On the Certificate Closing Date concurrently with the events
specified in Section 2.01(b) hereof, the parties hereto shall execute and
deliver, to the extent they are parties thereto, and consent to the execution
and delivery of (if they are not parties thereto), the Lease (other than the
Lease Supplement), the Indenture (other than the Indenture and Security
Agreement Supplement), and the other documents listed in Section 4.01(d)
hereof, and the Owner Trustee shall execute and deliver to the Indenture
Trustee for authentication, and the Indenture Trustee shall authenticate and
deliver to the Subordination Agent on behalf of the Pass Through Trustee for
each of the Pass Through Trusts, upon the request of the Owner Trustee, the
Certificates as provided in Section 2.02 hereof.
(e) The Closings shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 2.02. Certificates. Subject to the satisfaction or waiver
of the conditions set forth herein, on the Certificate Closing Date, the Owner
Participant will instruct the Owner Trustee to execute and deliver to the
Indenture Trustee, and the Indenture Trustee shall authenticate and deliver,
upon the request of the Owner Trustee, to the Subordination Agent on behalf of
the Pass Through Trustee for each of the Pass Through Trusts, the Certificates
specified for such Pass Through Trust on Schedule I attached hereto, which (i)
shall be issued in the principal amount and in the Series and Maturity set
forth for such Certificate in Schedule I hereto, (ii) shall bear interest at
the interest rate set forth for such Certificate in Schedule I hereto, (iii)
shall be issued in such form and on such terms as are specified in the
Indenture, (iv) shall be dated and authenticated on the Certificate Closing
Date and shall bear interest from the Certificate Closing Date and (v) shall
be registered in the name of the Subordination Agent on behalf of the Pass
Through Trustee for such Pass Through Trust.
Section 2.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the issuance of Certificates in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the action specified in Section 1.01 (other than clauses (a) and
(c)) of the Trust Agreement and confirmation that all conditions to closing
in respect of the Certificate Closing Date set forth in Section 4.01 (but
not Section 4.02) hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 2.04. Pre-Delivery Date Adjustments to Basic Rent,
Stipulated Loss Values and Termination Values. On or prior to the Delivery
Date, the percentages for Basic Rent referred to in Schedule II of the Lease
and the percentages for Stipulated Loss Value and Termination Value in
Schedule III and Schedule IV, respectively, of the Lease shall be adjusted
(upward or downward), subject to the procedures set forth in Section 3.04 of
the Lease and the minimum values established by Section 3.05 of the Lease and
the definitions of Stipulated Loss Value and Termination Value, to reflect
changes in the pricing assumptions with respect to (i) the Delivery Date being
other than September 23, 1997, (ii) a different rate of interest or amortization
schedule assumed by the Owner Participant in calculating such percentages from
that assumed by the Owner Participant in originally calculating such
percentages, (iii) Transaction Costs being other than as assumed in Section
10.01 hereof, (iv) any change in the length of the Basic Term (but in no event
shall the Term exceed 23.25 years) and (v) a Change in Tax Law which occurs
after the date of the execution of this Agreement but on or prior to the
Delivery Date. Notwithstanding anything herein to the contrary, the Lessee
shall have no obligation to enter into the transaction contemplated by this
Agreement other than with respect to Transaction Costs as described in Section
2.03 below and its obligation to purchase the Aircraft as provided in Section
3.05(a) hereof if, as a result of a Change in Tax Law after the date of
execution of this Agreement but on or prior to the Delivery Date, the Net
Present Value of Rents is increased by 100 basis points or more.
ARTICLE 3
PARTICIPATION IN INVESTMENT ON DELIVERY DATE;
DELIVERY OF AIRCRAFT
Section 3.01. Lessee's Notice of Delivery Date. The Lessee agrees
to give the Owner Participant, the Indenture Trustee, the Owner Trustee and
the Pass Through Trustee at least three (3) Business Days' written or
facsimile notice prior to the Delivery Date (which notice shall be effective
only if received not later than 10:00 a.m. (New York City time) on the date
that is at least three (3) Business Days prior to the Delivery Date), which
Delivery Notice shall specify the amount of the Purchase Price, the amount of
the Owner Participant's Commitment, the Debt Portion, the Delivery Date for
the Aircraft, the serial number of the Airframe and each Engine, and the
Aeronautics Authority registration number for the Aircraft.
Section 3.02. Commitments to Participate in Purchase Price. (a)
Participation in Purchase Price. Subject to the terms and conditions of this
Agreement, on the Delivery Date, (i) subject to the proviso to this Section
3.02(a), the Indenture Trustee agrees to release the Debt Portion or such
lesser amount as may then be held in the Collateral Account together with the
Lessee Shortfall (as defined in clause (iii) below), if any, to the Owner
Trustee for application to the Purchase Price as provided below, (ii) the
Owner Participant agrees to participate in the Lessor's payment of the
Purchase Price by making an investment in the beneficial ownership of the
Lessor's Estate in an amount equal to the amount set forth in Ancillary
Agreement II, (iii) subject to the proviso to this Section 3.02(a), the Lessee
agrees to pay to the Indenture Trustee the excess, if any, of (I) the Debt
Portion over (II) such amount as may then be held in the Collateral Account
(the "Lessee Shortfall") as provided in Section 17.02(a) hereof, and (iv)
pursuant to the Purchase Agreement as assigned pursuant to the Purchase
Agreement Assignment, AVSA shall sell the Aircraft to the Owner Trustee and
the Owner Trustee shall immediately thereafter lease the Aircraft to the
Lessee pursuant to the Lease. In consideration for the assignment to the
Owner Trustee by the Lessee under the Purchase Agreement Assignment of the
Lessee's right to purchase the Aircraft for the remaining balance due under
the Purchase Agreement and for the transfer of title to the Aircraft from
AVSA to the Owner Trustee, the following cash payments will be made by wire
transfer of immediately available funds on the Delivery Date: (A) by the
Owner Trustee to AVSA, an amount equal to the remaining balance due to AVSA
under the Purchase Agreement for the Aircraft, as evidenced by the Invoice,
or if the proviso to this Section 3.02(a) is applicable, such amount as it
shall have received from the Owner Participant not to exceed such remaining
balance due to AVSA, (B) by the Owner Trustee to the Lessee, an amount
equal to the Purchase Price (or if the proviso to this Section 3.02(a) is
applicable, the amount received from the Owner Participant) minus the cash
payment to AVSA pursuant to clause (A) above and (C) by the Indenture
Trustee, on behalf of the Owner Trustee, to the Lessee the excess of any
amounts as may then be held in the Collateral Account over the Debt
Portion; provided, however, that if (1) the Delivery Date has been
postponed, (2) the investments contemplated by Section 2.14(b) of the
Indenture have been made, (3) such investments do not mature on the
rescheduled Delivery Date and (4) the Lessee elects not to break such
investments, then the Indenture Trustee shall not release amounts in the
Collateral Account to the Owner Trustee and the Lessee shall instead pay to
AVSA any balance of the Purchase Price remaining after payment to AVSA by
the Owner Trustee as contemplated by clause (A) above and the Indenture
Trustee shall pay to the Lessee at the end of the applicable investment
period referred to in Section 2.14(b) of the Indenture all amounts then
held in the Collateral Account.
(b) Payment of Commitment. The Owner Participant agrees with the
Lessee and only with the Lessee on behalf of the Owner Trustee, subject to the
terms and conditions of this Agreement, to make the amount of its Commitment
available for and on account of the Owner Trustee on the Delivery Date
specified in the Delivery Notice pursuant to Section 3.03 hereof by wire
transfer, initiated by 10:00 a.m. (New York City time on such day) of such
amount in immediately available funds, to the Owner Trustee for deposit in its
account at State Street Bank and Trust Company, Boston, Massachusetts, ABA
No. ▇▇▇-▇▇▇-▇▇▇, A/C No. ▇▇▇▇-▇▇▇-▇, Attention: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇, Re: FedEx
Equity Payments Account. The amount of the Owner Participant's Commitment
shall be held for the account of the Owner Participant by the Owner Trustee
until released by the Owner Participant or its special counsel at closing or
until returned to the Owner Participant in accordance with Section 3.02(c)
hereof.
(c) No Obligation to Increase Commitments; Delayed Delivery. (i) If
the Indenture Trustee shall default in its obligation to make the amount of
its Debt Portion available pursuant hereto, the Owner Participant shall have
no obligation to make any portion of such Debt Portion available or to
increase the amount of its Commitment, and the obligations of the Owner
Participant shall remain subject to the terms and conditions of this
Agreement, until no later than September 30, 1997 (provided, however, if
the Delivery Date for the Aircraft is prior to the delivery date for the
aircraft bearing manufacturer's serial number 780 then the foregoing date
shall be September 30, 1997).
(ii) Subject to the provisions of Section 3.05 hereof, if the closing
of the transactions contemplated by the Operative Agreements shall not have
been consummated by 2:00 p.m. (New York City time), or such earlier time as
directed by the Lessee, on the Scheduled Delivery Date, the Owner Trustee
shall, if instructed in writing by the Lessee, at the risk and expense of the
Lessee, use its reasonable best efforts to cause the Owner Participant's
Commitment to be invested and reinvested to the extent practicable at the
direction received by it from the Lessee (with a copy to the Owner
Participant), at the risk of the Lessee, in Permitted Investments consisting
of either commercial paper or time deposits; provided, however, that in the
absence of instructions by 2:00 p.m. (New York City time) the Owner Trustee
shall use its reasonable best efforts to cause such amount or the proceeds
thereof to be invested and reinvested to the extent practicable in overnight
Eurodollar time deposits. Earnings on any such investments shall be applied
to the Lessee's payment obligations, if any, to such Owner Participant
pursuant to the next succeeding paragraph, and the balance, if any, of such
earnings remaining after such application shall be paid in accordance with the
Lessee's written instructions.
If for any reason (i) the Operative Agreements shall not be executed
and delivered by the respective parties thereto and/or the delayed Delivery
Date shall not occur (whether by reason of a failure to meet a condition
precedent thereto set forth in Article 4 hereof or otherwise) on or before the
third Business Day after the Scheduled Delivery Date (or earlier if requested
by the Owner Participant) or, if earlier, the Cut-Off Date, or (ii) the Lessee
has notified the Owner Trustee (with a copy to the Owner Participant) prior to
2:00 p.m. (New York City time) on any date after the Scheduled Delivery Date
that it does not intend to go forward to close the transactions contemplated
hereby for such Delivery Date, the Owner Participant may cancel any funding
arrangements made to fund its Commitment on the Scheduled Delivery Date but
the Owner Participant's Commitment hereunder with respect to the Aircraft
shall not be terminated thereby until December 31, 1997 (or, in the
circumstances set forth in the proviso in paragraph (i) above, September
30, 1997), whereupon the Owner Participant's Commitment hereunder shall
terminate. On such third Business Day (or such earlier date) or December
31, 1997 (or September 30, 1997, as the case may be), or the earliest
practicable Business Day thereafter, the Owner Trustee shall return the
amounts held by it hereunder to the Owner Participant, provided that the
Owner Trustee shall have had a reasonable time to liquidate any Permitted
Investments it has been authorized to invest in pursuant to the preceding
paragraph and to obtain the proceeds therefrom in funds of the type
originally received, and the Lessee shall pay interest on such funds to the
Owner Participant at the Debt Rate, such interest to be payable for the
period from and including such Scheduled Delivery Date to but excluding the
date such funds are returned to the Owner Participant in accordance with
the terms hereof; provided that if any such funds are returned to the Owner
Participant after 2:00 p.m. (New York City time) on any such date, such
funds shall be deemed for purposes of this paragraph to have been returned
on the next succeeding Business Day.
The Lessee shall reimburse the Owner Trustee on demand for any loss
incurred by the Owner Trustee as a result of the investment of funds by the
Owner Trustee in accordance with the terms of this Section 3.02(c). Further,
the Lessee shall indemnify the Owner Trustee and hold it harmless from and
against any cost or expense the Owner Trustee may incur as a result of any
investment of funds or transfer of funds referred to herein in accordance with
the terms hereof. The Owner Trustee shall not be liable for failure to invest
such funds except as otherwise provided herein or for any losses incurred on
such investments except for any losses arising out of its own gross negligence
or willful misconduct.
Section 3.03. Owner Participant's Instructions to Owner Trustee.
The Owner Participant agrees that the release of its Commitment in
accordance with the terms hereof shall constitute, without further act,
authorization and direction by the Owner Participant to the Owner Trustee
to take the actions specified in Sections 1.01(a) and (c) of the Trust
Agreement and confirmation that all conditions to closing set forth in
Section 4.02 hereof were either met to the satisfaction of the Owner
Participant or, if not so met, were in any event waived by it.
Section 3.04. Transaction Costs. If the transactions contemplated
by this Article 3 are consummated, as and when any portion of Transaction
Costs becomes due and payable, the Owner Participant shall, as soon as
practicable upon receipt of bills or invoices for the amounts payable make
such payments or, if the Lessee shall have already made such payment, shall
reimburse the Lessee therefor or shall, as soon as practicable, furnish the
Owner Trustee funds sufficient to, and the Owner Trustee shall, as soon as
practicable, make payment of such portion to the Person or Persons entitled to
payment upon presentation to the Owner Trustee of bills or invoices for the
amount of such payment. If such transactions are not consummated, the Lessee
shall pay or cause to be paid all the Transaction Costs; provided, however
that if the failure of such transactions to be consummated is due to (i) a
failure of the Owner Participant to obtain investment approval to proceed with
the transaction contemplated hereby, (ii) a failure to negotiate the Operative
Agreements in good faith by the Owner Participant or (iii) a wrongful act by
the Owner Participant, the Lessee shall have no obligation to pay those costs
and expenses incurred directly by the Owner Participant in connection with the
transactions contemplated by this Agreement described in Sections 10.01(a)(i)
and (xi) hereof, but the Lessee shall be obligated to pay all other
Transaction Costs.
Section 3.05. Postponement of Delivery Date. (a) If the Owner
Participant shall for any reason fail or refuse to make the full amount of its
Commitment available on the Scheduled Delivery Date in accordance with the
terms of Section 3.02 hereof, the Owner Trustee will promptly give each party
confirmed facsimile notice thereof and the Lessee shall postpone the Delivery
Date for a period of not more than five (5) Business Days, but in no event
later than September 30, 1997 or December 31, 1997, as the case may be. If
the Owner Participant shall for any reason fail or refuse to make the full
amount of its Commitment available in accordance with the terms of Section
3.02 hereof on such postponed Delivery Date, (i) if the Owner Participant
fails to make available its Commitment in breach of its obligations under
this Agreement, the Lessee shall cause the Owner Participant to assign to
another equity investor identified by the Lessee its interest in the
Lessor's Estate pursuant to Section 7.03(d) hereof and (ii) if no such
equity investor is identified, or if such equity investor fails to close
such transactions, or if the Owner Participant fails to make available its
Commitment for any other reason than as specified in clause (i) above, the
Owner Participant's interest in the Lessor's Estate shall be automatically
conveyed to the Lessee without any further action, and the parties hereto
shall take such actions as may be advisable or necessary to give effect to
such conveyance. From and after any such conveyance, the Owner
Participant's obligations hereunder and under the other Operative
Agreements shall cease. The exception to the Lessee's indemnity set forth
in clause (viii) of Section 9.01(b) hereof shall not be applicable to any
such conveyance other than a conveyance pursuant to clause (i) above. For
the avoidance of doubt, it is understood and agreed that if for any reason
other than the failure of the Manufacturer or AVSA to deliver the Aircraft,
the Lessee does not enter into the Lease Supplement with the Owner Trustee
on or prior to the Cut-Off Date, the Indenture Trustee and the Pass Through
Trustee agree that the Lessee shall purchase the Aircraft and assume all of
the obligations of the Owner Trustee under the Certificates upon
satisfaction of the requirements set forth in Section 4.02 hereof, as the
same may be modified by the provisions of Section 7.11 hereof and as
otherwise necessary to reflect a full recourse secured aircraft financing
of the Lessee. If the Lessee has identified an equity investor under the
circumstances set forth in clause (i) above, the Owner Participant agrees
to assign its interest in the Lessor's Estate as provided in said clause
(i). In case of any such conveyance pursuant to said clause (i) (but
subject to the satisfaction of the conditions precedent specified herein),
the Indenture Trustee shall release the Debt Portion or such lesser amount
as may then be held in the Collateral Account for application to the
payments contemplated in the last sentence of Section 3.02(a) hereof,
subject to the proviso to Section 3.02(a) hereof.
(b) Release of Obligations. If the Delivery Date has not occurred
on or prior to the Cut-Off Date (i) in the case of the Indenture Trustee and
the Pass Through Trustee, as a result of a failure of the Manufacturer or AVSA
to deliver the Aircraft, or (ii) in the case of the Owner Participant, for any
reason, then, in such event, the Owner Trustee shall not purchase the Aircraft
from AVSA, and the parties to the Operative Agreements shall have no further
obligations or liabilities under any of said Operative Agreements with respect
to the Aircraft, including the obligation of the Owner Participant to
participate in the payment of the Purchase Price, and such documents shall
terminate and have no further force or effect with respect to the Aircraft;
provided, however, that the Lessee shall provide, no later than the Cut-Off
Date, notice of prepayment to the Indenture Trustee and the Certificates shall
be prepaid on the 15th day following the Cut-Off Date as provided in Section
6.02(a)(vi) of the Indenture and Section 17.02(c) hereof and provided further,
that (i) the Lessee's obligation to pay any Transaction Costs as provided in
Section 3.04 hereof (to the extent such section is applicable) and to
indemnify such parties to the extent provided in such documents, shall not be
diminished or modified in any respect and (ii) the obligations of the Owner
Trustee, the Indenture Trustee and the Lessee to return funds and pay
interest, costs, expenses and other amounts thereon or in respect thereof as
provided in Section 3.02 hereof shall continue.
(c) Optional Postponement. Without limiting the provisions of
Section 3.02(c) hereof, the Scheduled Delivery Date may be postponed from time
to time (but in no event shall the Delivery Date be later than the Cut-Off
Date) for any reason, other than pursuant to Section 3.05(a) hereof, if the
Lessee gives the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Pass Through Trustee confirmed facsimile notice (or telephone notice
followed by written confirmation) of such postponement and notice of the date
to which the Delivery Date has been postponed, such notice of postponement to
be received by each party no later than 11:00 a.m. (New York City time) on the
Business Day preceding the Scheduled Delivery Date.
Section 3.06. Closing. The closing with respect to the purchase and
lease of the Aircraft on the Delivery Date shall take place at the offices of
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent (Certificate Closing Date). The
obligations of the Owner Trustee, the Owner Participant, the Indenture
Trustee, the Subordination Agent and the Pass Through Trustee on behalf of
each Pass Through Trust to participate in the transactions contemplated hereby
on the Certificate Closing Date are subject to the fulfillment to the
satisfaction of such party (or waiver by such party), prior to or on the
Certificate Closing Date, of the following conditions precedent (it being
understood that receipt by the Lessee of any of the following documents shall
not be a condition precedent to the obligations of any party):
(a) Certificates. (i) On the Certificate Closing Date, there shall
have been duly issued and delivered by the Owner Trustee to the
Subordination Agent on behalf of the Pass Through Trustee for each Pass
Through Trust, against payment therefor, a Certificate, substantially in
the form set forth in Exhibit B to the Indenture, duly authenticated, dated
the Certificate Closing Date and registered in the name of the
Subordination Agent, in the principal amounts, Series and Maturity, bearing
the interest rate and the other economic terms specified in the Series
Supplements and otherwise as provided in Section 2.04 of the Indenture.
The Pass Through Certificates shall be registered under the Securities Act,
any applicable state securities laws shall have been complied with, and the
Pass Through Agreement shall have been qualified under the Trust Indenture
Act, and (ii) on the Certificate Closing Date, the "Certificates" (as
defined in each of the Related Indentures) have been duly issued and
delivered by the "Owner Trustee" (as defined in each of the Related
Indentures) to the Subordination Agent on behalf of the Pass Through
Trustee for each Pass Through Trust.
(b) Legal Investment. On the Certificate Closing Date, no fact or
condition shall exist under applicable laws or regulations, or
interpretations of any such laws or regulations by applicable regulatory
authorities, which, in the opinion of the Owner Participant or its special
counsel, the Pass Through Trustee, the Subordination Agent or the Indenture
Trustee or their special counsel, would make it illegal for the Owner
Participant, the Lessee, the Owner Trustee, the Pass Through Trustee, the
Subordination Agent or the Indenture Trustee, and no change in
circumstances shall have occurred which would otherwise make it illegal or
otherwise in contravention of guidance issued by regulatory authorities for
the Owner Participant, the Lessee, the Owner Trustee, the Pass Through
Trustee, the Subordination Agent or the Indenture Trustee, to participate
in the transactions to be consummated on the Certificate Closing Date; and
no action or proceeding shall have been instituted nor shall governmental
action before any court, governmental authority or agency be threatened
which in the opinion of counsel for the Owner Participant, the Indenture
Trustee, the Subordination Agent or the Pass Through Trustee is not
frivolous, nor shall any order have been issued or proposed to be issued by
any court, or governmental authority or agency, as of the Certificate
Closing Date, to set aside, restrain, enjoin or prevent the consummation of
any of the transactions contemplated by this Agreement or by any of the
other Operative Agreements.
(c) Underwriters. The Underwriters shall have transferred the funds
specified in Section 2.01(a) hereof and all conditions thereunder shall
have been satisfied or waived.
(d) Documents. This Agreement and the following documents shall
have been duly authorized, executed and delivered by the respective
party or parties thereto, shall each be satisfactory in form and
substance to the Lessee, the Owner Trustee, the Indenture Trustee, the
Pass Through Trustee and the Owner Participant (each acting directly or
by authorization to its special counsel) and shall each be in full force
and effect; there shall not have occurred any default thereunder, or any
event which with the lapse of time or the giving of notice or both would
be a default thereunder, and copies executed or certified as requested
by the Lessee, the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee, the Subordination Agent or the Owner Participant, as
the case may be, of such documents shall have been delivered to the
Owner Participant, the Lessee, the Indenture Trustee, the Pass Through
Trustee, the Subordination Agent and the Owner Trustee (provided that
the sole chattel-paper original of each of the Lease and each Ancillary
Agreement amendatory of the Lease, shall be delivered to the Indenture
Trustee):
(i) the Lease;
(ii) the Indenture;
(iii) in the case of the Owner Participant only, the Tax Indemnity
Agreement;
(iv) the Purchase Agreement and the Consent and Guaranty;
(v) the Purchase Agreement Assignment and the French Pledge
Agreement with respect thereto;
(vi) the GTA;
(vii) the Trust Agreement;
(viii) the Ancillary Agreement I;
(ix) the Ancillary Agreement II;
(x) the Owner Participant Guaranty;
(xi) the Intercreditor Agreement; and
(xii) the Liquidity Facility for each of the Pass Through Trusts for
the Series A Certificates and the Series B Certificates.
(e) Approv