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EXHIBIT 10.3
SEVENTH SPECIAL FACILITY SUPPLEMENTAL LEASE AGREEMENT
BY AND BETWEEN
MEMPHIS-SHELBY COUNTY AIRPORT AUTHORITY
AND
FEDERAL EXPRESS CORPORATION
DATED AS OF JUNE 1, 2002
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TABLE OF CONTENTS
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SECTION 1. Definitions............................................................1
SECTION 2. Term of Lease..........................................................2
SECTION 3. Rental.................................................................2
SECTION 4. Prepayment of Certain Rentals..........................................2
SECTION 5. Series 2002 Bonds......................................................3
SECTION 6. Special Covenants of the Lessee........................................3
SECTION 7. Tax Covenant...........................................................3
SECTION 8. Lease Still in Effect; Provisions Thereof Applicable to
this Seventh Supplemental Lease......................................3
SECTION 9. Descriptive Headings...................................................3
SECTION 10. Effectiveness of this Seventh Supplemental Lease.......................3
SECTION 11. Execution of Counterparts..............................................3
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SEVENTH SPECIAL FACILITY
SUPPLEMENTAL LEASE AGREEMENT
THIS SEVENTH SPECIAL FACILITY SUPPLEMENTAL LEASE AGREEMENT (this
"Seventh Supplemental Lease") dated as of the first day of June 2002, by and
between the MEMPHIS-SHELBY COUNTY AIRPORT AUTHORITY (the "Lessor"), a public and
governmental body politic and corporate of the State of Tennessee, and FEDERAL
EXPRESS CORPORATION (the "Lessee"), a corporation duly organized and existing
under the laws of the State of Delaware and qualified to do business in the
State of Tennessee;
WITNESSETH:
WHEREAS, Lessor and Lessee on August 21, 1979, entered into a Special
Facility Lease Agreement dated as of August 1, 1979 (as heretofore amended and
supplemented by the Supplemental Leases (defined below), the "Lease");
WHEREAS, Lessor and Lessee have amended and supplemented the Lease by
First, Second, Third, Fourth, Fifth and Sixth Special Facility Supplemental
Lease Agreements dated as of May 1, 1982, November 1, 1982, December 1, 1984,
July 1, 1992, July 1, 1997 and December 1, 2001, respectively (said First,
Second, Third, Fourth, Fifth and Sixth Special Facility Supplemental Lease
Agreements being referred to herein, collectively, as the "Supplemental
Leases"); and
WHEREAS, Lessor and Lessee have agreed to further supplement the Lease
to reflect a change in rentals resulting from the current refunding of the
Lessor's Special Facilities Revenue Bonds, Refunding Series 1992 (Federal
Express Corporation) issued to refund bonds originally issued to finance
facilities and equipment for inclusion in the Special Facility, as defined in
the Lease;
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and agreements hereinafter contained to be kept and performed by the
parties hereto and upon the provisions and conditions hereinafter set forth,
Lessor and Lessee do hereby covenant and agree, and each for itself does hereby
covenant and agree, as follows:
SECTION 1. DEFINITIONS. Except as otherwise provided herein, and
unless the context shall clearly require otherwise, all words and terms used in
this Seventh Supplemental Lease which are defined in the Lease shall, for all
purposes of this Seventh Supplemental Lease, have the respective meanings given
to them in the Lease.
Unless the context shall clearly require otherwise, the following
terms shall, for all purposes of the Lease and of any agreement amendatory or
supplemental thereto (including for all purposes this Seventh Supplemental
Lease) have the meanings herein specified, with the following definitions to be
equally applicable to both the singular and plural forms of any of the terms
herein defined:
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(a) EIGHTH SUPPLEMENTAL INDENTURE. The term "Eighth Supplemental
Indenture" shall mean the Eighth Supplemental Indenture dated as of
June 1, 2002, by and between the Lessor and the Trustee amending and
supplementing the Indenture, as amended and supplemented as provided
in the Indenture.
(b) SERIES 2002 BONDS. The term "Series 2002 Bonds" shall mean the
$95,770,000 principal amount of special obligation bonds of the Lessor
designated Special Facilities Revenue Refunding Bonds, Series 2002
(Federal Express Corporation) and issued under Sections 2.07 and 2.08
of the Indenture and the Eighth Supplemental Indenture and in
accordance with Section 7.6 of the Lease.
SECTION 2. TERM OF LEASE. The term of the Lease, including this
Seventh Supplemental Lease, shall expire on August 31, 2012 at 11:59 o'clock
P.M.; PROVIDED, that the term of the Lease, including this Seventh Supplemental
Lease, shall not expire so long as any Bonds remain outstanding under the terms
of the Indenture except as provided in subsection A of Section 9.2 of the Lease.
SECTION 3. RENTAL. Lessee shall pay the rentals reserved to the Lessor
under Section 3.3 of the Lease at the time, place and manner set forth therein,
which from and after the date of delivery of and payment for the Series 2002
Bonds, in addition to the amounts otherwise payable as of the date hereof under
said Section 3.3, shall include (a) an amount equal to the principal of and
premium (if any) and interest on the Series 2002 Bonds as and when the same
become due and payable by reason of stated maturity or redemption of such Bonds
as provided in the Indenture, and (b) all other amounts payable under said
Section 3.3 in connection with the Series 2002 Bonds.
SECTION 4. PREPAYMENT OF CERTAIN RENTALS. (a) Lessee may prepay the
rentals required hereby in accordance with subsections A, B and C of Section 3.4
of the Lease and receive the credits provided therein.
(b) In the event a judgment or order of a court of competent
jurisdiction which is final (either because the time for appeal thereof has
expired or because the judgment or order is issued by that court having final
appellate jurisdiction over the matter and is not subject to collateral attack),
or a determination of the Internal Revenue Service which is final (because the
tax has been paid pursuant thereto and the time for filing a claim for refund of
such tax has expired) to the effect that the interest paid or payable on any
Series 2002 Bond to other than a substantial user of the Special Facility or a
related person is or was includable in the gross income of the holder thereof
for federal income tax purposes as a result of a failure by the Lessee to
observe or perform any covenant or agreement to be observed or performed by it
under the Lease or as a result of facts within the control of the Lessee which
are contradictory to any representation or warranty made by the Lessee under the
Lease, the Lessee shall prepay on the next scheduled rent payment date the
entire amount of rent due under subparagraph (b) of Section 3.3 of the Lease and
pursuant to Section 3 hereof to effect redemption of the then outstanding Series
2002 Bonds in accordance with the Indenture.
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SECTION 5. SERIES 2002 BONDS. Lessor shall apply the proceeds of the
Series 2002 Bonds in accordance with the terms of the Eighth Supplemental
Indenture, the form, terms and provisions of which the Lessee hereby
acknowledges.
SECTION 6. SPECIAL COVENANTS OF THE LESSEE. The Lessee covenants and
agrees with the Lessor that so long as the Series 2002 Bonds are outstanding, it
will provide the Lessor with copies of all publicly available reports, notices,
financial statements or other documents that the Lessee is required to provide
to the Securities and Exchange Commission.
SECTION 7. TAX COVENANT. The Lessee covenants and agrees that it will
comply with the requirements of Section 103 and Sections 141 through 150 of the
Internal Revenue Code of 1986, as amended (the "Code"), if and to the extent
required to maintain the exclusion of interest on the Series 2002 Bonds from
gross income for federal income tax purposes under the Code.
SECTION 8. LEASE STILL IN EFFECT; PROVISIONS THEREOF APPLICABLE TO
THIS SEVENTH SUPPLEMENTAL LEASE. All of the terms, provisions, conditions,
covenants and agreements of the Lease shall continue in full force and effect as
supplemented hereby, and shall be applicable to each of the provisions of this
Seventh Supplemental Lease during the term hereof with the same force and effect
as though the provisions hereof were set forth in the Lease.
SECTION 9. DESCRIPTIVE HEADINGS. The descriptive headings of the
sections of this Seventh Supplemental Lease are inserted for convenience of
reference only and do not constitute a part of this Seventh Supplemental Lease
and shall not affect the meaning, construction, interpretation or effect of this
Seventh Supplemental Lease.
SECTION 10. EFFECTIVENESS OF THIS SEVENTH SUPPLEMENTAL LEASE. This
Seventh Supplemental Lease shall become effective upon delivery of and payment
for the Series 2002 Bonds.
SECTION 11. EXECUTION OF COUNTERPARTS. This Seventh Supplemental Lease
may be simultaneously executed in several counterparts, each of which shall be
an original and all of which shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, MEMPHIS-SHELBY COUNTY AIRPORT AUTHORITY and
FEDERAL EXPRESS CORPORATION have caused this Seventh Supplemental Lease to be
duly executed as of the date first above written.
MEMPHIS-SHELBY COUNTY AIRPORT
AUTHORITY
By /s/ LARRY D. COX
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ATTEST: President and Chief Executive Officer
/s/ JERRY L. MCMICHAEL
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Executive Vice President,
Finance and Administration and
Secretary/Treasurer
FEDERAL EXPRESS CORPORATION
By /s/ BURNETTA B. WILLIAMS
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Name: Burnetta B. Williams
ATTEST: Title: Vice President and Assistant Treasurer
/s/ ANDREW M. PAALBORG
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Secretary
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STATE OF TENNESSEE )
) ss:
COUNTY OF SHELBY )
On this 19th day of June, 2002, before me appeared Larry D. Cox, to me
personally known, who, being by me duly sworn (or affirmed) did say that he is
the President and Chief Executive Officer of the Memphis-Shelby County Airport
Authority, and that the seal affixed to the foregoing instrument is the
corporate seal of said Authority, and that said instrument was signed and sealed
on behalf of said Authority, by authority of its Board of Commissioners and he
acknowledged said instrument to be the free act and deed of said Authority.
[SEAL]
/s/ S.M. GARRETT, JR.
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Notary Public
My Commission Expires: 11/16/02
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STATE OF TENNESSEE )
) ss:
COUNTY OF SHELBY )
On this 19th day of June, 2002, before me appeared Burnetta B.
Williams, to me personally known, who, being by me duly sworn (or affirmed) did
say that she is Vice President and Assistant Treasurer of Federal Express
Corporation, and that the seal affixed to the foregoing instrument is the
corporate seal of said Corporation, and that said instrument was signed and
sealed on behalf of said Corporation by authority of its Board of Directors and
she acknowledged said instrument to be the free act and deed of said
Corporation.
[SEAL]
/s/ JUDITH L. TWELE
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Notary Public
My Commission Expires: 2/26/03
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