EXHIBIT 4.d
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TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N585FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE MCDONNELL DOUGLAS MD-11F AIRCRAFT
SERIAL NO. 48481, REGISTRATION NO. N585FE
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Page
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TABLE OF CONTENTS
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PARTIES...................................................................... 1
RECITALS.................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............ 1
Section 1.02. Declaration of Trust.................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor. .......... 2
Section 1.04. Prohibited Activity..................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc.......................... 3
Section 2.02. Excepted Payments. ..................................... 4
Section 2.03. Other Receipts. ........................................ 4
Section 2.04. Distributions after Default. ........................... 4
Section 2.05. Distributions after Release of Lien of Indenture. ...... 4
Section 2.06. Manner of Making Distributions. ........................ 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties.......................... 5
Section 3.02. Limitation on Authority of Owner Trustee. .............. 6
Section 3.03. Notice of Default. ..................................... 6
Section 3.04. Action Upon Instructions................................ 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.... 7
Section 3.06. Certain Rights of Owner Trustee......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters.. 10
Section 3.08. Status of Moneys Received............................... 10
Section 3.09. Self-Dealing............................................ 11
Section 3.10. Definition of a Responsible Officer..................... 11
Section 3.11. Resignation or Removal of Owner Trustee................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............ 11
Section 3.13. Merger or Consolidation of SSB.......................... 12
Section 3.14. Co-Trustees. ........................................... 12
Section 3.15. Interpretation of Agreements............................ 13
Section 3.16. Not Acting in Individual Capacity....................... 14
Section 3.17. Tax Returns. ........................................... 14
Section 3.18. Independent Business.................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. ........................................... 16
Section 4.02. Distribution of Lessor's Estate upon Termination. ...... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification......................................... 17
Section 6.02. Supplements and Amendments.............................. 19
Section 6.03. Nature of Title of Trustor.............................. 19
Section 6.04. Power of Owner Trustee to Convey........................ 19
Section 6.05. Notices. ........................................... 20
Section 6.06. Situs of Trust; Applicable Law; Severability............ 21
Section 6.07. Successors and Assigns.................................. 21
Section 6.08. Headings and Table of Contents.......................... 21
Section 6.09. Identification of Trust................................. 21
Section 6.10. Counterparts............................................ 21
Section 6.11. Trustor Interest. ...................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N585FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N585FE)
dated as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association (in
its individual capacity, "SSB", and not in its individual capacity but solely as
trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS CORPORATION, a
Delaware corporation (together with its successors and permitted assigns, the
"Trustor"). The capitalized terms used herein, unless otherwise herein defined
or the context hereof shall otherwise require, shall have the respective
meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held by
the Indenture Trustee on behalf of the Owner Trustee in the Collateral Account
and released, subject to the proviso to Section 3.02(a) of the Participation
Agreement, on the Delivery Date in order to finance a portion of the Purchase
Price of the Aircraft, to acquire the Aircraft from the Lessee on the Delivery
Date, to lease the Aircraft to the Lessee on the Delivery Date and to receive
the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and
to perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the Owner
Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from the Lessee on the Delivery Date, and taking all appropriate
action to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in
the manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents
or certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and
agrees, in its individual capacity, that it will, and in its capacity as the
Owner Trustee does, hold the Lessor's Estate upon the trust herein set forth for
the use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at such
times as may be necessary to permit the Owner Trustee to satisfy its obligations
under Section 3.02 of the Participation Agreement, subject to the conditions set
forth therein. The right and obligation of the Owner Trustee to take the actions
required by Section 1.01 hereof shall be subject to the condition that the
Trustor shall have made the full aggregate amount of the advances required to be
made by the Trustor pursuant to Section 3.02(a) of the Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not,
and the Trustor shall not cause the Owner Trustee to, engage in any activity
other than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent (other
than Excepted Payments), Stipulated Loss Value, Termination Value, and any
proceeds from the sale, requisition or disposition of the Aircraft received by
it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii)
of this Section 2.01(b), or to the extent received from the Indenture
Trustee under the terms of the Indenture, the balance, if any, remaining
shall be paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be part
of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than those
referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to the
release of the Lien of the Indenture directly to the Indenture Trustee (and if
any of the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of any
kind) for distribution in accordance with the provisions of Article V of the
Indenture; and following such application or release of Lien, any such payment
for which provision as to the application thereof is made in the other Operative
Agreements shall be applied promptly to the purpose for which such payment shall
have been made in accordance with the terms of the other Operative Agreements,
and any such payment received by the Owner Trustee for which no provision as to
the application thereof is made in the Operative Agreements or in this Article 2
shall, unless the Trustor shall have otherwise instructed the Owner Trustee in
writing, be distributed promptly to the Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become or
been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part of
this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of Article
V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner
Trustee under the Lease or otherwise with respect to the Aircraft or any
part thereof (including, without limitation, all payments received pursuant
to Section 17.01 of the Lease and amounts realized upon the sale or lease
of the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of the
Trustor as it may designate from time to time by written notice to the Owner
Trustee (and the Owner Trustee shall use best efforts to cause such funds to be
transferred by wire transfer on the same day as received, but in any case not
later than the next succeeding Business Day), and (ii) the Indenture Trustee
pursuant to this Article 2 by paying the amount to be distributed to the
Indenture Trustee in the manner specified in the Indenture; provided, that the
Owner Trustee shall invest overnight, for the benefit of the Trustor, in
investments that would be permitted by Article 23 of the Lease (but only to the
extent funds are received on or prior to 1:00 P.M. (Eastern Time) and such
investments are available and, if such investments are not available to the
Owner Trustee in investments which, after consultation with the Trustor, the
Trustor shall direct) all funds not transferred by wire transfer on the same day
as they were received. Notwithstanding the foregoing but subject always to the
provisions of, and the Lien created by, the Indenture, the Owner Trustee will,
if so requested by the Trustor by written notice, pay in immediately available
funds any and all amounts payable by the Owner Trustee hereunder to the Trustor
as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the
trust hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation, subject
to Section 1.03 hereof, the actions specified in Section 1.01 hereof as herein
provided. The Owner Trustee agrees to disburse all monies that it receives under
the Operative Agreements in accordance with the terms hereof. The Owner Trustee
shall not be answerable or accountable in its individual capacity except as a
result of or arising from (a) the Owner Trustee's willful misconduct or gross
negligence (in its individual capacity or as trustee), (b) any breach by the
Owner Trustee of its representations, warranties and covenants given in its
individual capacity in this Agreement, Sections 7.01(c), 7.02(a) and (b) and
7.04 of the Participation Agreement or its covenants given in its individual
capacity in Section 3.05 of the Indenture or elsewhere in the Operative
Agreements, (c) the failure to use ordinary care in receiving, handling and
disbursing funds, (d) Lessor's Liens attributable to it in its individual
capacity, and (e) taxes, fees, or other charges on, based on, or measured by,
any fees, commissions or compensation received by SSB or the Owner Trustee in
connection with the transactions contemplated by the Lease, the Indenture and
the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain from
taking any action under or in connection with the Operative Agreements, except
(i) to execute and deliver the Operative Agreements to which it is a party, (ii)
to exercise and carry out or cause to be exercised or carried out the rights,
duties and obligations of the Owner Trustee hereunder and under the other
Operative Agreements as authorized and directed by the Trustor, or (iii) as
expressly provided in written instructions from the Trustor given pursuant to
Section 3.03 or 3.04 hereof; provided, that nothing in this Section 3.02 shall
limit in any manner the obligations of the Owner Trustee hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default or
an Indenture Event of Default, the Owner Trustee shall give or cause to be given
to the Trustor and the Indenture Trustee prompt notice (in any event within two
Business Days of the discovery thereof), in accordance with Article 14 of the
Participation Agreement, of such Default, Event of Default, Indenture Default or
Indenture Event of Default. Subject to the terms of Section 3.06(e) hereof and
the rights of the Indenture Trustee under the Indenture, the Owner Trustee shall
take such action with respect to such Default, Event of Default, Indenture
Default or Indenture Event of Default as shall be specified in written
instructions from the Trustor; provided that the Owner Trustee shall have no
duty to take any action whatsoever in the absence of instructions from the
Trustor. For all purposes of this Agreement and the Lease, in the absence of
actual knowledge of a Responsible Officer of the Owner Trustee, the Owner
Trustee shall not be deemed to have knowledge of a Default, Event of Default,
Indenture Default or Indenture Event of Default unless notified in writing by
the Lessee, the Trustor, the Indenture Trustee or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner Trustee
will take or refrain from taking such action, not inconsistent with provisions
of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner
Trustee. (a)(i) The Owner Trustee undertakes to perform such duties and only
such duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall be
read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not manage,
control, possess, use, sell, lease, dispose of or otherwise deal with the
Aircraft or any part of the Lessor's Estate except as required by the terms of
the Operative Agreements, any such instructions and as otherwise provided
herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in its
individual capacity that it will, at its own cost and expense, promptly take
such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions of
this Section 3.05, except that in the event of a conflict between this Section
3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Owner Trustee hereunder or under the other Operative Agreements
(including those furnished to the Indenture Trustee pursuant to the terms of the
Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the investment"
of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take
any action under this Agreement or under any of the other Operative
Agreements at the request or direction of the Trustor unless the Persons
making such request or direction shall have offered to the Owner Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction; nor shall the Owner Trustee be required to take any action
deemed to impose on the Owner Trustee any obligation to take any action, if
the Owner Trustee shall have been advised by its counsel that such action
is unlawful or is contrary to the terms of this Agreement or the other
Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE MADE
(a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR
A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by the Lessee and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall be
free of all Lessor's Liens attributable to it, and that the Owner Trustee shall
comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is a
party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor) the
other Operative Agreements to which the Owner Trustee is a party have been (or
at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has been
duly authorized, executed and delivered by SSB and (assuming due authorization,
execution and delivery of this Trust Agreement by the Trustor) constitutes the
legal, valid and binding obligation of SSB enforceable against it in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
rights of creditors generally and by general principles of equity.
Section 3.08. Status of Moneys Received. All moneys received by
the Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which they
were paid or are held, but need not be segregated in any manner from any other
moneys except to the extent required by law and subsection (e) of Section 3.18
hereof and may be deposited by the Owner Trustee under such conditions as may be
prescribed or permitted by law for trust funds, or may be invested in direct
obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary course
of business, with the Lessee or any other corporation having relations with the
Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of Directors,
the Chairman or Vice-Chairman of the Executive Committee of the Board of
Directors, the President, any Vice President (whether or not designated by a
number or a word or words added before or after the title "Vice President"), the
Secretary, any Assistant Secretary, or any other officer in the Corporate Trust
Administration of SSB customarily performing functions similar to those
performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so pursuant
to Section 7.02(b) of the Participation Agreement and (b) may resign at any time
without cause by giving at least 60 days' prior written notice to the Trustor
and the Indenture Trustee, such resignation in each case to be effective only
upon the appointment of a successor trustee and the acceptance of such
appointment by such successor. In addition, the Trustor may at any time remove
the Owner Trustee without cause by an instrument in writing delivered to the
Owner Trustee and the Indenture Trustee, such removal to be effective only upon
the appointment by the Trustor of a successor Owner Trustee and the acceptance
of such appointment by such successor. Upon the giving of notice of resignation
or removal of the Owner Trustee, the Trustor may appoint a successor Owner
Trustee by an instrument signed by the Trustor. If the Trustor shall not have so
appointed a successor Owner Trustee within 30 days after such resignation or
removal, the Owner Trustee, the Indenture Trustee or the Trustor may apply to
any court of competent jurisdiction to appoint a successor Owner Trustee to act
until such time, if any, as a successor or successors shall have been appointed
by the Trustor as above provided. Any successor Owner Trustee so appointed by a
court shall be superseded by any successor Owner Trustee subsequently appointed
by the Trustor.
The appointment of any successor Owner Trustee shall be subject to
the conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture Trustee,
an instrument accepting such appointment, and thereupon each successor Owner
Trustee, without further act, shall become vested with all the estates,
properties, rights, powers, duties and trust of the predecessor Owner Trustee in
the trust hereunder with like effect as if originally named as an Owner Trustee
herein, but nevertheless upon the written request of such successor Owner
Trustee, such predecessor Owner Trustee shall execute and deliver an instrument
transferring to such successor Owner Trustee, upon the trust herein expressed,
all estates, properties, rights, powers, duties, property or moneys then held by
such predecessor Owner Trustee upon the trust herein expressed. Upon any such
transfer by a predecessor Owner Trustee, such predecessor Owner Trustee shall
provide the successor Owner Trustee and Trustor an accounting of the Lessor's
Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of the
Aircraft included in the Lessor's Estate to be transferred upon the records of
the Aeronautics Authority or other registry where the Aircraft may then be
registered into the name of the successor Owner Trustee and shall otherwise use
its best efforts to comply, or assist the successor Owner Trustee in complying,
with the provisions of Section 11.01 of the Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or
the Trustor shall deem it necessary or prudent or desirable in order to conform
to legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to appoint
one or more Persons approved by the Trustor and the Owner Trustee to act as
co-trustee, or co-trustees, jointly with the Owner Trustee, or separate trustee
or separate trustees (except insofar as local law makes it necessary or prudent
or desirable for any such co-trustee or separate trustee to act alone), of all
or any part of the Lessor's Estate, and to vest in such Person or Persons, in
such capacity, such title to the Lessor's Estate or any part thereof, and such
rights, powers, duties, trusts or obligations as the Trustor and the Owner
Trustee may consider necessary or prudent or desirable. The Owner Trustee shall
not be liable for any act or omission of any co-trustee or separate trustee
appointed under this Section 3.14. No appointment of, or action by, any
co-trustee or separate trustee appointed under this Section 3.14 will relieve
the Owner Trustee of any of its obligations under any Operative Agreement or
otherwise affect any of the terms of the Indenture or adversely affect the
interests of the Indenture Trustee or the Certificate Holders in the Trust
Indenture Estate.
Any co-trustee or separate trustee may, at any time by an
instrument in writing, constitute the Owner Trustee its or his attorney-in-fact
and agent with full power and authority to do all acts and things and to
exercise all discretion on its or his behalf and in its or his name subject to
the conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the
United States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following provisions
and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be
exercised by, any such additional trustee, except jointly with, or with the
consent in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this Agreement
or any other Operative Agreement or any other agreement relating to the
transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is silent
or incomplete as to the course of action which the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee shall request
in writing sent in accordance with Article 14 of the Participation Agreement
instructions of the Trustor and, to the extent that the Owner Trustee acts in
good faith in accordance with any instructions received from the Trustor, shall
not be liable to any Person; provided, that in the event that no response is
made to the Owner Trustee by the Trustor within 25 Business Days after such
request, the Owner Trustee shall not be liable to any Person for acts taken by
the Owner Trustee in good faith or for any failure to act, except to the extent
provided in the last sentence of Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee hereunder
and not in its individual capacity except as expressly provided herein or in the
other Operative Agreements to which it is a party; and all Persons, other than
the Trustor as provided in this Agreement, having any claim against the Owner
Trustee by reason of the transactions contemplated hereby shall look only to the
Lessor's Estate for payment or satisfaction thereof, except to the extent
provided in the last sentence of Section 3.01 hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt and
disbursement of all moneys under this Agreement or any Operative Agreement. The
Trustor shall be responsible for causing to be prepared and filed all income tax
returns required to be filed by the Trustor. The Owner Trustee, upon the request
of the Trustor, will furnish the Trustor with all such information as may be
reasonably required or necessary from the Owner Trustee in connection with the
preparation of such tax returns and in connection with any other filing or audit
and related litigation obligations. The Owner Trustee shall be responsible for
causing to be prepared at the request of the Trustor and at the expense of the
Lessee all income tax returns required to be filed with respect to the trust
created hereby and shall execute and file such returns; provided, however, that
the Owner Trustee shall send a completed copy of each such return to the Trustor
not more than 60 nor less than 30 days prior to the due date of such return;
provided that the Owner Trustee shall have timely received all necessary
information to complete and deliver to the Trustor such return. The Trustor,
upon request, will furnish the Owner Trustee with all such information as may be
required from the Trustor in connection with the preparation of such income tax
returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily identifiable
trust separate from, and independent of, the Trustor and any of its Affiliates
(it being understood that the Trustor and its Affiliates may publish financial
statements that consolidate those of the Owner Trustee, if to do so is required
by any applicable law or accounting principles from time to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the
Owner Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created
and provided for hereby shall cease and be terminated in any one of the
following events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of
all of its interest in all property constituting or included in the
Lessor's Estate and, if the Indenture shall then be in effect, the sale or
other disposition by the Indenture Trustee of all of its interest in all
property constituting or included in the Lessor's Estate, and the final
disposition by the Owner Trustee and, if the Indenture shall then be in
effect, the Indenture Trustee, of all moneys or other property or proceeds
constituting part of the Lessor's Estate in accordance with the terms
hereof; or
(c) 21 years less one day from the death of the last survivor of
the descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if
the Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and accounting
for all funds which have come into its hands, the Owner Trustee shall be
entitled to receipt of any sums due and owing to the Owner Trustee for expenses
incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its Beneficial
Interest to one or more institutional investors to enable the Owner Trustee to
purchase the Aircraft pursuant to Section 3.02 of the Participation Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees
to reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to any
fees for services rendered in its capacity as Trustee hereunder) and reasonable
counsel fees, which are not required to be indemnified by the Lessee pursuant to
Section 9.01 of the Participation Agreement and which may be incurred by reason
of its being the Owner Trustee or acting hereunder or under the Operative
Agreements, but solely by reason thereof and arising out of or relating solely
to this Agreement or the other Operative Agreements or the Aircraft or the Rents
and other sums payable therefor, or by reason of any occurrence directly
relating thereto while so acting, and to secure the payment thereof, SSB, in its
individual capacity, shall have a Lien on the Lessor's Estate and the proceeds
thereof, including income, prior to any interest therein of the Trustor and
their respective assigns (but subject to the rights of the Lessee under the
Operative Agreements and subject and subordinate to the Lien of the Indenture),
except that SSB shall not have any such Lien (and the Trustor shall have no
obligation) in respect of any such loss, damage, liability, claims, demands,
disbursements and expenses, including Taxes and counsel fees, arising from or as
a result of (A) the Owner Trustee's willful misconduct or gross negligence (in
its individual capacity or as trustee), (B) any inaccuracy of any representation
of SSB or any breach by SSB of its warranties and covenants given in its
individual capacity in this Agreement, Article 5 of the Lease, Sections 7.01(c),
7.02(a) and (b) and 7.04 of the Participation Agreement and its representations
and warranties in the Operative Agreements, (C) the failure to use ordinary care
in receiving, handling and disbursing funds, (D) Lessor's Liens attributable to
it in its individual capacity, (E) Taxes, fees, or other charges on, based on,
or measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify SSB
pursuant to Section 8.01(b) of the Participation Agreement (disregarding for the
purposes of this Section 6.01, subsections (iii) or (vi) of Section 8.01(b) of
the Participation Agreement) or (G) Expenses excluded from the Lessee's
obligation to indemnify SSB pursuant to Section 9.01(b) of the Participation
Agreement (disregarding for the purposes of this Section 6.01, subsections (ii),
(iv), (vii) and (viii) of Section 9.01(b) of the Participation Agreement to the
extent such subsections relate to actions of the Trustor); provided, that,
before asserting any right to payment or indemnification hereunder, SSB shall
first demand (but need not exhaust its remedies with respect to) its
corresponding right to payment or indemnification from the Lessee pursuant to
the Participation Agreement. It is further understood that the distribution by
the Owner Trustee of all or any part of the Lessor's Estate as provided in
Section 4.02 of this Agreement shall not impair the right of SSB to indemnity,
payment and reimbursement as herein provided. In the event SSB makes any
advances at any time to pay or to provide for the payment of any such loss,
damage, liability, claim, demand or expense, then SSB, in its individual
capacity, shall be entitled, in addition to reimbursement for the principal of
the sum so advanced, to interest on the amount of such advances at the Prime
Rate. The provisions of this Section shall continue in force and effect
notwithstanding the termination of this Trust or the resignation, inability or
incapacity to act or removal of the Owner Trustee. SSB or the Owner Trustee (in
its individual capacity or as trustee, as the case may be) agrees that it shall
have no right against (except as provided in this Section 6.01) the Trustor or
(subject to the provisions of the Indenture) the Trust Indenture Estate for any
fee as compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from
time to time, only upon the written request of the Trustor (a) SSB and the
Trustor shall execute a supplement hereto for the purpose of adding provisions
to, or changing or eliminating provisions of, this Agreement as specified in
such request and (b) the Owner Trustee shall, subject to the provisions of
Section 8.01 of the Indenture, enter into or consent to such written amendment
or modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and as
may be specified in such request, or execute and deliver such written waiver of
the terms of any of the Operative Agreements as may be agreed to in writing by
the Indenture Trustee and as may be specified in such request; provided, that
(i) the Owner Trustee shall not execute any such supplement, amendment, waiver
or modification without the prior written consent of the Trustor, (ii) if in the
reasonable opinion of the Owner Trustee any document required to be executed by
it pursuant to this Section adversely affects any right or duty of, or immunity
or indemnity in favor of, the Owner Trustee under this Agreement or any other
Operative Agreement, the Owner Trustee may in its discretion decline to execute
such document, (iii) any amendment or supplement to this Agreement that would
adversely affect the rights of the Indenture Trustee or the Holders shall be
subject to the prior written consent of the Indenture Trustee and (iv) any
amendment or supplement to this Agreement that would adversely affect the rights
of the Lessee shall be subject to the prior written consent of the Lessee. It
shall not be necessary that any request pursuant to this Section specify the
particular form of the proposed document to be executed pursuant to such
request, but it shall be sufficient if such request shall indicate the substance
thereof. Promptly after the execution by SSB or the Owner Trustee of any
document pursuant to this Section, the Owner Trustee shall mail a conformed copy
thereof to the Trustor, the Indenture Trustee and the Lessee, but the failure of
the Owner Trustee to mail such conformed copies shall not impair or affect the
validity of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have
any legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to the
Lessor's Estate or the trust hereunder shall operate to terminate this Agreement
or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part thereof
pursuant to and in compliance with the terms of this Agreement or the Operative
Agreements shall bind the Trustor and shall be effective to transfer or convey
all right, title and interest of the Owner Trustee and the Trustor in and to the
Operative Agreements or the Aircraft or such part thereof. No purchaser or other
grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such assignment, sale, transfer or conveyance or as
to the application of any sale or other proceeds with respect thereto by the
Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement shall
be invalid or unenforceable, the remaining provisions hereof shall continue to
be fully effective; provided, that such remaining provisions do not increase the
obligations or liabilities of the Owner Trustee or the Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by, the
parties hereto and their respective successors and permitted assigns, including
any successive holder of the Beneficial Interest, but only to the extent the
Beneficial Interest has been transferred or assigned in accordance with the
limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any of
the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N585FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement
to be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _______________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _______________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N585FE)
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 Section 13.01(c)(i) of the
Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed
to have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall be
equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any reduction
in Taxes that would result from such increased Taxes. 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.
Aircraft. The Airframe to be sold by the Lessee 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 three
Engines (whether each 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative Agreements
(including Section 3.03 of the Participation Agreement) to Aircraft shall mean
the McDonnell Douglas MD-11F airframe bearing FAA Registration Number N585FE and
Manufacturer's serial number 48481, together with three General Electric
CF6-80C2-D1F engines.
Airframe. The McDonnell Douglas MD-11F 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 and any Pre-Delivery Replacement Airframe
which may be substituted pursuant to Section 2.04 of the Participation
Agreement.
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. N585FE), dated the Delivery 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 a copy of the fair market value letter
to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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.
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 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 January 15, 2021, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) under the Trust Agreement.
Bills of Sale. Collectively, the FAA Bill of Sale and the Warranty
Bill of Sale.
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. N585FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement thereof
pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N585FE) dated as of June 15, 1998, 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.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of
the Lease.
Cut-Off Date. December 14, 1998.
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 the Lessee 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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 three General Electric CF6-80C2-D1F 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, all Engines then leased to the
Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of June 15, 1998,
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. N585FE), dated as of June 15, 1998,
between the Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA,
or an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such longer
period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii) of this
definition) 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, provided that no Event of Loss shall be deemed to
have occurred, and the Term shall be extended automatically for a period of six
months (or the date of return of the Aircraft, if shorter, so long as the Lessor
receives at least six months notice of such date of return) beyond the end of
the Term in the event that the Aircraft, the Airframe or any Engine is
requisitioned by the Government pursuant to an activation as part of the CRAF
Program described in Section 7.02(a)(iv) of the Lease; 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 McDonnell Douglas MD-11 series aircraft
equipped with engines of the same make and model as the Engines for a period of
six (6) consecutive months, unless the Lessee, prior to the expiration of such
six (6) 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 twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period shall have conformed at
least one McDonnell Douglas MD-11 series aircraft (but not necessarily the
Aircraft or the Airframe) to the requirements of any such law, rule, regulation,
order, or other action and shall have commenced regular commercial use and shall
be diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month period, referred to in
clause (iv) above. 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 or other payments
(and interest thereon to the extent provided in the Operative Agreements) 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 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 the
provisions of 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 amounts payable by the Lessee to the Owner
Participant or the Owner Trustee in its individual capacity, after the release
thereof from the Lien of the Indenture, (vi) the payment of incremental
out-of-pocket expenses of the Owner Trustee, the Owner Participant or their
respective authorized representatives payable by the Lessee under Section
6.03(b) of the Participation Agreement or Section 14.01 of the Lease following
any reregistration of the Aircraft and (vii) proceeds of, and any right to
demand, collect or otherwise receive and enforce the payment of any amount
described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a)
of the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
FAA Bill of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority,
executed by the Lessee in favor of the Owner Trustee and to be dated the
Delivery Date.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided that in
connection with any determination pursuant to or for the purposes of Article 17
of the Lease, the Aircraft shall be appraised on an "as is, where is" basis.
Fair Market Value shall be determined in accordance with the provisions of
Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal
Aviation Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N585FE), dated as of June 15, 1998, 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.
N585FE) 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 against which the Lessee has not
indemnified (and is not obligated to indemnify) the Indenture Trustee in such
capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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 the Lessee to the
Lessor.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii)
the "Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N585FE) dated as of June 15, 1998, 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. N585FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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, the
Bills of Sale, the Modification Agreement, 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,
the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated
the Certificate Closing Date, in the form of Exhibit F to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of
the Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together with
any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount
(as determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis on
each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding principal
amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to
the Participation Agreement.
Manufacturer. McDonnell Douglas Corporation, a wholly-owned
subsidiary of The Boeing Company.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Maximum Stated Amount. The amount specified under "Letter of
Credit Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Modification Agreement. The Aircraft Modification Agreement dated
as of December 1, 1995 between the Lessee and the Manufacturer providing for the
refurbishing and reconfiguration of the Aircraft including any warranties
relating thereto, but only to the extent that the foregoing relates to the
Aircraft, to the extent assigned to the Owner Trustee pursuant to the Warranty
Bill of Sale.
Moody's. 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 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, the Bills of Sale, the Modification Agreement, the GTA, the Engine
Warranty Assignment, the Lease, the Lease Supplement, the Owner Participant
Guaranty, if any, 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
Engine Consent, the Tax Indemnity Agreement, each Liquidity Facility, the
Intercreditor Agreement, the Collateral Agreement, the Letter of Credit and the
Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N676FE, N677FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated as
of June 15, 1998, between State Street Bank and Trust Company of Connecticut,
National Association, as owner trustee and First Security Bank, National
Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement and
any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N585FE.
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, if any, 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 and the EBO Price, 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. N585FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January
15, 1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a)
of the Lease.
Premium Termination Date. With respect to the Series A
Certificates, the scheduled maturity date of the Series A Certificates, with
respect to the Series B Certificates, the scheduled maturity date of the Series
B Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Price. Has the meaning specified in Ancillary Agreement
I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative
Agreement that is to be modified in any material respect on the Delivery Date or
the Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications would
not result in (i) a reduction of the rating for any Class of Pass Through
Certificates below the then current rating for such Class of Pass Through
Certificates or (ii) a withdrawal or suspension of the rating of any Class of
Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application
and Agreement, dated the Pass Through Closing Date, between the Lessee and the
LC Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N676FE, N677FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated as
of June 15, 1998, between State Street Bank and Trust Company of Connecticut,
National Association, as owner trustee and First Security Bank, National
Association, as indenture trustee, the Trust Indenture and Security Agreement
for Federal Express Corporation Trust No. N590FE, dated as of May 1, 1998, as
amended and restated as of June 15, 1998, between State Street Bank and Trust
Company of Connecticut, National Association, as owner trustee and First
Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association, as
indenture trustee.
Related Participation Agreements. Collectively, with respect to
each Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on
January 15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b)
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-D1F engine (or an
engine of the same or another manufacturer) of the same or of equal or greater
value, 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-D1F engine, such
replacement engine must then be commonly used in the commercial aviation
industry on McDonnell Douglas MD-11 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 C Prepayment Date. July 15, 1999 or any other date
designated by the Lessee, but in no event later than the fifteenth day after the
Last Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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
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 and,
accordingly, no further accrual or credit shall be required whenever Stipulated
Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N585FE), dated as of June 15, 1998, 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, 2005 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, 2013 or July 15, 2019, as the case may be, (ii) Section 4.02(a)(D)
or (E) of the Lease, a Rent Payment Date that is on or after the eighth
anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the Lease,
January 15, 2016.
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 and, accordingly, no further accrual or credit
shall be required whenever Termination Value is to be calculated with reference
to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N585FE), dated as of June 15, 1998, 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, and the Letter of Credit and
any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and J.P.
Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
Warranty Bill of Sale. The full warranty bill of sale covering the
Aircraft (and specifically referring to each Engine) executed by the Lessee, as
seller in favor of the Owner Trustee, as buyer, and to be dated the Delivery
Date.
- -------------------------------------------------------------------------------
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N590FE)
Dated as of May 1, 1998
Amended and Restated as of June 15, 1998
between
BMO LEASING (U.S.), INC.,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE MCDONNELL DOUGLAS MD-11F AIRCRAFT
SERIAL NO. 48505, REGISTRATION NO. N590FE
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
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PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 2
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent..................................... 2
Section 1.04. Prohibited Activity...................................... 3
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Rent, Etc................................................ 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 7
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 11
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 12
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 14
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 15
Section 4.02. Distribution of Lessor's Estate upon Termination......... 16
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 18
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 20
Section 6.04. Power of Owner Trustee to Convey......................... 20
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 22
Section 6.10. Counterparts............................................. 22
Section 6.11. Trustor Interest......................................... 22
Section 6.12. Performance by the Trustor............................... 22
Section 6.13. Limitations on Control. Exceptions...................... 22
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N590FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N590FE) dated
as of May 1, 1998, as amended and restated as of June 15, 1998 (this
"Agreement") between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association (in its individual
capacity, "SSB", and not in its individual capacity but solely as trustee
hereunder, the "Owner Trustee"), and BMO LEASING (U.S.), INC., a Delaware
corporation (together with its successors and permitted assigns, the
"Trustor"). The capitalized terms used herein, unless otherwise herein
defined or the context hereof shall otherwise require, shall have the
respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor and SSB have heretofore entered into the Original
Trust Agreement;
WHEREAS, the Original Trust Agreement was duly filed with the Federal
Aviation Administration on May 27, 1998;
WHEREAS, the Original Loan Participant participated in the payment of
the Purchase Price by providing financing as evidenced by the Original Loan
Certificates;
WHEREAS, pursuant to Article 15 of the Original Participation
Agreement, the Lessee, the Trustor and the Owner Trustee desire to refinance
all of the Original Loan Certificates on the Refunding Date; and
WHEREAS, the Trustor and SSB desire, in connection with such
refinancing, to amend and restate the Original Trust Agreement in its entirety
as herein provided.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree that the Original Trust Agreement
be and the same is hereby amended and restated in its entirety as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) on the Refunding Date to execute and deliver each of the
Operative Agreements to which the Owner Trustee is a party and to enter
into and perform the transactions contemplated thereby;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements and the Original Agreements to which the Owner Trustee
is a party or which the Owner Trustee is required to deliver pursuant to
the Operative Agreements and the Original Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the transactions contemplated hereby, the taking of any
such action by the Owner Trustee in the presence of the Trustor or its
counsel to evidence, conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby confirms, in its
individual capacity, that it holds and will continue to hold, in its capacity
as the Owner Trustee, the Lessor's Estate upon the trust herein set forth for
the use and benefit of the Trustor, subject, however, to the provisions of,
and the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent. The right and obligation of the
Owner Trustee to take the actions required by Section 1.01 hereof shall be
subject to the condition that the terms and conditions of Section 4.01 of the
Participation Agreement shall have been complied with in a manner satisfactory
to the Owner Trustee and the Trustor.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Rent, Etc. The Trustor and the Owner Trustee
acknowledge that the Lease will be security for the Certificates pursuant to
the Indenture which provides that all moneys payable by the Lessee to the
Owner Trustee under the Lease (other than Excepted Payments) are to be paid to
the Indenture Trustee while the Lien of the Indenture is in effect. Except as
otherwise provided in Section 2.04 hereof, the Owner Trustee shall promptly
apply each payment of the Rent (other than Excepted Payments), Stipulated Loss
Value, Termination Value, and any proceeds from the sale, requisition or
disposition of the Aircraft received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01, or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner
Trustee under the Lease or otherwise with respect to the Aircraft or
any part thereof (including, without limitation, all payments
received pursuant to Section 17.01 of the Lease and amounts realized
upon the sale or lease of the Aircraft or any part thereof after the
termination of the Lease with respect thereto), to the extent
received or realized at any time after the Lien of the Indenture
shall have been released pursuant to the terms of the Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of
amounts described in paragraph (a),
shall, to the extent required, be retained by the Owner Trustee as
reimbursement for all expenses hereunder or under the Lease not theretofore
reimbursed under this Agreement, the Lease or otherwise and to which the Owner
Trustee is entitled to be reimbursed pursuant to the provisions thereof, and
any balance remaining thereafter shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to the account set forth in the
Participation Agreement or to such other account or accounts of the Trustor as
it may designate from time to time by written notice to the Owner Trustee (and
the Owner Trustee shall use best efforts to cause such funds to be transferred
by wire transfer on the same day as received, but in any case not later than
the next succeeding Business Day), and (ii) the Indenture Trustee pursuant to
this Article 2 by paying the amount to be distributed to the Indenture Trustee
in the manner specified in the Indenture; provided, that the Owner Trustee
shall invest overnight, for the benefit of the Trustor, in investments that
would be permitted by Article 23 of the Lease (but only to the extent funds
are received on or prior to 1:00 P.M. (Eastern Time) and such investments are
available and, if such investments are not available to the Owner Trustee in
investments which, after consultation with the Trustor, the Trustor shall
direct) all funds not transferred by wire transfer on the same day as they
were received. Notwithstanding the foregoing but subject always to the
provisions of, and the Lien created by, the Indenture, the Owner Trustee will,
if so requested by the Trustor by written notice, pay in immediately available
funds any and all amounts payable by the Owner Trustee hereunder to the
Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
representations, warranties and covenants given in its individual capacity in
Sections 3.05 and 3.08 of the Indenture or elsewhere in the Operative
Agreements, (c) the failure to use ordinary care in receiving, handling and
disbursing funds, (d) Lessor's Liens attributable to it in its individual
capacity, and (e) taxes, fees, or other charges on, based on, or measured by,
any fees, commissions or compensation received by SSB or the Owner Trustee in
connection with the transactions contemplated by the Lease, the Indenture and
the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements, or (iii) as expressly provided in written
instructions from the Trustor given pursuant to Section 3.03 or 3.04 hereof;
provided, that nothing in this Section 3.02 shall limit in any manner the
obligations of the Owner Trustee hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require SSB in its individual capacity
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements or the Original Agreements (including those furnished to the
Indenture Trustee pursuant to the terms of the Indenture) and not otherwise
furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner Trustee
shall not be authorized and shall have no power to "vary the investment" of the
Trustor within the meaning of Treasury Regulations Section 301.7701-4(c)(1),
it being understood that the Owner Trustee shall have the power and authority
to fulfill its obligations under Section 2.06 hereof and Article 23 of the
Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder or under any of the
other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its duties
by or through such attorneys, agents and servants as it shall appoint with
due care, and it shall be entitled to rely upon the advice of counsel
reasonably selected by it with due care and shall be protected by the
advice of such counsel in anything done or omitted to be done in accordance
with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except as
otherwise provided in written instructions given to the Owner Trustee by the
Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor and (to the extent provided in the
Indenture) the Indenture Trustee copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever right, title and interests in, to and under the
Aircraft that were conveyed to it by the Lessee and SSB represents, warrants
and covenants that at all times on and after the Delivery Date the Aircraft
shall be free of all Lessor's Liens attributable to it, and that the Owner
Trustee shall comply with the last sentence of Section 3.05(b) hereof, or (b)
any representation or warranty as to the validity, legality or enforceability
of this Agreement or any other Operative Agreement to which the Owner Trustee
is a party, or any other document or instrument, or as to the correctness of
any statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and may be deposited by the
Owner Trustee under such conditions as may be prescribed or permitted by law
for trust funds, or may be invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Department of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee for cause by an instrument in writing delivered
to the Owner Trustee and the Indenture Trustee, such removal to be effective
only upon the appointment by the Trustor of a successor Owner Trustee and the
acceptance of such appointment by such successor. Upon the giving of notice
of resignation or removal of the Owner Trustee, the Trustor may appoint a
successor Owner Trustee by an instrument signed by the Trustor. If the
Trustor shall not have so appointed a successor Owner Trustee within 30 days
after such resignation or removal, the Owner Trustee, the Indenture Trustee or
the Trustor may apply to any court of competent jurisdiction to appoint a
successor Owner Trustee to act until such time, if any, as a successor or
successors shall have been appointed by the Trustor as above provided. Any
successor Owner Trustee so appointed by a court shall be superseded by any
successor Owner Trustee subsequently appointed by the Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Owner Trustee by an instrument in
writing signed by it, shall appoint one or more Persons approved by the
Trustor to act as co-trustee, or co-trustees, jointly with the Owner Trustee,
or separate trustee or separate trustees (except insofar as local law makes it
necessary or prudent or desirable for any such co-trustee or separate trustee
to act alone), of all or any part of the Lessor's Estate, and to vest in such
Person or Persons, in such capacity, such title to the Lessor's Estate or any
part thereof, and such rights, powers, duties, trusts or obligations as the
Trustor may consider necessary or prudent or desirable. The Owner Trustee
shall not be liable for any act or omission of any co-trustee or separate
trustee appointed under this Section 3.14. No appointment of, or action by,
any co-trustee or separate trustee appointed under this Section 3.14 will
relieve the Owner Trustee of any of its obligations under any Operative
Agreement or otherwise affect any of the terms of the Indenture or adversely
affect the interests of the Indenture Trustee or the Certificate Holders in
the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder except as otherwise provided
hereunder; and
(E) the Trustor, at any time, by an instrument in writing may remove
any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon request, will furnish the Trustor with all such information as
may be reasonably required or necessary from the Owner Trustee in connection
with the preparation of such tax returns and in connection with any other
filing or audit and related litigation obligations. The Owner Trustee shall be
responsible for causing to be prepared at the request of the Trustor and at
the expense of the Lessee all income tax returns required to be filed with
respect to the trust created hereby and shall execute and file such returns;
provided, however, that the Owner Trustee shall send a completed copy of each
such return to the Trustor not more than 60 nor less than 30 days prior to the
due date of such return; provided that the Owner Trustee shall have timely
received all necessary information to complete and deliver to the Trustor such
return. The Trustor, upon request, will furnish the Owner Trustee with all
such information as may be required from the Trustor in connection with the
preparation of such income tax returns.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that (i) if
at the time of any termination the Lease remains in force and effect, then the
Lessor's Estate shall be sold as a unit (and not in parcels) and subject to
the Lease, and (ii) in the event such written instructions are not delivered
to the Owner Trustee on or before the date of termination, the Owner Trustee
shall transfer title to the Lessor's Estate to the Trustor. Upon making such
transfer or sale and accounting for all funds which have come into its hands,
the Owner Trustee shall be entitled to receipt of any sums due and owing to
the Owner Trustee for expenses incurred pursuant hereto as set forth in
Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Trustor may assign, convey or otherwise transfer to a single
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 Trustor shall remain liable for all obligations of
the Trustor under this Agreement and the Operative Agreements to which the
Trustor is a party to the extent (but only to the extent) incurred on or
before the date of such transfer and provided that the transferee agrees by a
written instrument in form and substance reasonably satisfactory to the
Indenture Trustee, the Owner Trustee and the Lessee to assume primary
liability for all obligations as a trustor under this Agreement and the other
Operative Agreements to which such trustor is a party incurred after the date
of transfer and the Trustor shall remain secondarily liable for all such
obligations assumed by its successor as Trustor; provided, that the Trustor
need not so agree to remain and shall not be so secondarily liable if (a) such
transferee is (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 satisfactory to the
Lessee, the Owner Trustee and the Indenture Trustee or (B) an unconditional
guaranty satisfactory to the Lessee, the Owner Trustee and the Indenture
Trustee of such transferee subsidiary's obligations, or (iii) an Affiliate of
the original Trustor, 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) such transferee is legally capable of
binding itself to the obligations of the Trustor and expressly agrees to
assume all obligations of the Trustor under the Participation Agreement and
this Agreement and (c) such transferee shall provide representations
substantially similar to those contained in Section 7.03(a) of the
Participation Agreement. In the event of any such assignment, conveyance or
transfer, the transferee shall become a party to this Agreement and shall
agree to be bound by all the terms of and will undertake all of the
obligations of the Trustor contained in this Agreement and the other Operative
Agreements in such manner as is reasonably satisfactory to the Owner Trustee,
the Indenture Trustee and the Lessee. 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) or if the transferee shall not be such "U.S. Person" then
each Certificate Holder shall be provided an indemnity in form and substance
satisfactory to each such Certificate Holder, for any Taxes that may be
imposed on such Certificate Holders (currently or in the future) due to 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 ERISA Plan. Assuming
the truth of the representations made in Section 6.01(m) of the Participation
Agreement 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 Trustor to a transferee as above
provided, the transferee shall be deemed the "Trustor" for all purposes
hereof, 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 herein to the
"Trustor" shall thereafter be deemed a reference to such transferee.
Notwithstanding anything to the contrary contained in this Article 5, in no
event shall the Trustor 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 and
which competes with the Lessee.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agree to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including taxes (excluding taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements or the Original Agreements, but solely by
reason thereof and arising out of or relating solely to this Agreement or the
other Operative Agreements or the Original Agreements or the Aircraft or the
Rents and other sums payable therefor, or by reason of any occurrence directly
relating thereto while so acting, and to secure the payment thereof, SSB, in
its individual capacity, shall have a Lien on the Lessor's Estate and the
proceeds thereof, including income, prior to any interest therein of the
Trustor and its assigns (but subject to the rights of the Lessee under the
Operative Agreements or the Original Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Owner Participant shall have no obligation) in respect of any such loss,
damage, liability, claims, demands, disbursements and expenses, including
taxes and counsel fees, arising from or as a result of (A) the Owner Trustee's
willful misconduct or gross negligence (in its individual capacity or as
trustee), (B) any inaccuracy of any representation of SSB or any breach by SSB
of its warranties and covenants given in its individual capacity in this
Agreement, Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04
of the Participation Agreement and its representations and warranties in
Sections 3.05 and 3.08 of the Indenture or elsewhere in the Operative
Agreements, (C) the failure to use ordinary care in receiving, handling and
disbursing funds, (D) Lessor's Liens attributable to it in its individual
capacity, (E) taxes, fees, or other charges on, based on, or measured by, any
fees, commissions or compensation received by SSB in connection with the
transactions contemplated by the Lease, the Indenture and this Agreement, (F)
Taxes excluded from indemnification pursuant to Section 8.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii) and (v) of Section 8.01(b) of the Participation Agreement) or
(G) Expenses excluded from indemnification pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii), and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Owner Participant); provided, that, before asserting any right to payment
or indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Article
VIII of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. The Trustor shall not
have any legal title to any part of the Lessor's Estate. No transfer, by
operation of law or otherwise, of the right, title and interest of the Trustor
in and to the Lessor's Estate or the trusts hereunder shall operate to
terminate this Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: BMO Leasing (U.S.), Inc.
c/o Bank of Montreal
115 South LaSalle Street
Chicago, Illinois 60603
Attention: BMO Leasing (U.S.), Inc.
Telephone: (312) 750-3791
Facsimile: (312) 658-4616
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N590FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this trust (as opposed to
the Trustor's beneficial interest in this trust).
Section 6.12. Performance by the Trustor. Any obligation of the
Owner Trustee hereunder or under any Operative Agreement or other document
contemplated herein may be performed by the Trustor and any such performance
shall not be construed as a revocation of the trust created hereby.
Section 6.13. Limitations on Control. Exceptions. (a) Limitations
on Control. Notwithstanding any other provision of this Agreement, but
subject to paragraph (b) of this Section 6.13, the Trustor will not have any
rights or powers to direct, influence or control the Owner Trustee in the
performance of the Owner Trustee's duties under this Agreement in connection
with matters involving the ownership and operation of the Aircraft by the
Owner Trustee. In all matters involving the ownership and operation of the
Aircraft by the Owner Trustee, the Owner Trustee shall have absolute and
complete discretion in connection therewith and shall be free of any kind of
influence or control whatsoever by the Trustor, and the Owner Trustee shall
exercise its duties under this Agreement in connection with matters involving
the ownership and operation of the Aircraft by the Owner Trustee as it, in its
discretion, shall deem necessary to protect the interests of the United
States, notwithstanding any countervailing interest of any foreign power
which, or whose citizens, may have a direct or indirect interest in the
Trustor and any such action by the Owner Trustee shall not be considered
malfeasance or in breach of any obligation which the Owner Trustee might
otherwise have to the Trustor; provided, however, that subject to the foregoing
limitations, the Owner Trustee shall exercise this discretion in all matters
involving the ownership and operation of the Aircraft by the Owner Trustee
with due regard for the interests of the Trustor. In exercising any of its
rights and duties under this Agreement in connection with matters which may
arise not relating to the ownership and operation of the Aircraft, the Owner
Trustee shall be permitted to seek the advice of the Trustor before taking, or
refraining from taking, any action with respect thereto. The Owner Trustee
shall notify the Trustor of its exercise of rights and duties under this
Agreement in connection with matters involving the ownership and operation of
the Aircraft by the Owner Trustee.
(b) Certain Exceptions. Subject to the requirements of the preceding
paragraph (a), the Owner Trustee agrees that it will not, without the prior
written consent of the Trustor, (i) sell, mortgage, pledge or otherwise
dispose of the Aircraft or other assets held in the Trust Estate relating
thereto except as otherwise expressly provided for herein, or (ii) amend any
Lease or give any consents thereunder.
(c) Purposes. The purpose of this Section 6.13 is to give the Owner
Trustee the power to manage and control the Aircraft with respect to matters
involving the ownership and operation of the Aircraft by the Owner Trustee so
as to assure that (i) the Aircraft shall be controlled with respect to such
matters by a Citizen of the United States and (ii) the Trustor shall have no
power to influence or control the exercise of the Owner Trustee's authority
with respect to such matters and (iii) the Owner Trustee shall be able to give
the affidavit required by Section 47.7(c)(2)(iii) of the Federal Aviation
Regulations, 14 C.F.R. 47.7(c)(2)(iii). This Section 6.13 shall be construed
in furtherance of the foregoing purpose.
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
BMO LEASING (U.S.), INC.
By: _________________________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N590FE)
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 and except in the case of the
Original Agreements, (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.
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 received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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.
Agent. Morgan Guaranty Trust Company of New York and its successors
and permitted assigns as Agent for the Original Loan Participant pursuant to
Article 16 of the Original Participation Agreement.
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.
Aircraft. The Airframe (or any permitted substitute airframe
thereunder) together with three Engines (whether each 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.
Airframe. The McDonnell Douglas MD-11F aircraft (excluding the
Engines or engines from time to time installed thereon) 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.
Amendment No. 1 to the Original Tax Indemnity Agreement. Amendment
No. 1 to the Original Tax Indemnity Agreement (Federal Express Corporation
Trust No. N590FE), dated as of June 15, 1998, between the Lessee and the Owner
Participant.
Ancillary Agreement I. The Ancillary Agreement I (Federal Express
Corporation Trust No. N590FE), dated the Delivery Date, as amended and
restated on the Refunding 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 Agreements. 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 the Delivery Date or the Refunding 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.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with an abbreviated report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original 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.
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 27, 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.
Bills of Sale. Collectively, the FAA Bill of Sale and the Warranty
Bill of Sale.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Chicago, Illinois, 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.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N590FE), 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 on or prior to the Refunding 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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
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. May 27, 1998.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
Engine. Each of the three General Electric CF6-80C2-D1F 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), 10.03, 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, all Engines then
leased to the Lessee pursuant to the Lease.
Engine Consent. The Engine Consent dated as of May 1, 1998, 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. N590FE), dated as of May 1, 1998, 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)(ix) 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 30 days due to theft or disappearance or such longer
period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii) of
this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease 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 McDonnell Douglas MD-11 series aircraft equipped with
engines of the same make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the expiration of such six (6)
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 twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period shall have conformed
at least one McDonnell Douglas MD-11 series aircraft (but not necessarily the
Aircraft or the Airframe) to the requirements of any such law, rule,
regulation, order, or other action and shall have commenced regular commercial
use and shall be diligently carrying forward, on a non-discriminatory basis,
all steps necessary or desirable to permit the normal use of the Aircraft by
the Lessee. The date of such Event of Loss shall be (s) the 31st day or the
91st 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, 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 6 month or
12 month period, referred to in clause (iv) above. 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. If an Event of Loss described in any of
clauses (i) (A), (iii), (iv) or (v) above shall occur, Lessor may elect,
within 30 days following the date upon which such Event of Loss is deemed to
have occurred, to waive such Event of Loss and the consequences thereof.
Excepted Payments. Collectively, (i) indemnity or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (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)
the payment of incremental out-of-pocket expenses of the Owner Trustee, the
Owner Participant or their respective authorized representatives payable by
the Lessee under Section 6.03(b) of the Participation Agreement or Section
14.01 of the Lease following any reregistration of the Aircraft and (viii) any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
FAA Bill of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority,
executed by the Lessee in favor of the Owner Trustee and dated the Delivery
Date.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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.
FSB. First Security Bank, National Association, a national banking
association.
FSC. Global Capital Solutions Ltd., a Barbados corporation.
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 Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Subordination Agent, in its
individual capacity and in its capacity as Subordination Agent, each Liquidity
Provider, the Owner Participant, the Original Loan Participant (to the extent
set forth in Articles 8 and 9 of the Original Participation Agreement), 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. N590FE), dated as of May 1, 1998, as amended and
restated as of June 15, 1998, 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.
N590FE), dated May 27, 1998, 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 or Expenses
imposed against the Indenture Trustee 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.
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, 1998, 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.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N590FE) dated as of May 1, 1998, as amended and restated as of June 15, 1998,
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. N590FE), dated May 27, 1998, 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 Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, the Bills of Sale, the Modification Agreement, 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 or 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 7, 8, 9, 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.
Liquidity Facility. Has the meaning specified in Section 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in the Intercreditor
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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Manufacturer. McDonnell Douglas Corporation, a Maryland corporation.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Modification Agreement. The Aircraft Modification Agreement dated as
of December 1, 1995 between the Lessee and the Manufacturer providing for the
refurbishing and reconfiguration of the Aircraft including any warranties
relating thereto, but only to the extent that the foregoing relates to the
Aircraft, to the extent assigned to the Owner Trustee pursuant to the Warranty
Bill of Sale.
Moody's. 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 (i) a citizen or resident of
the United States, as defined in Section 7701(a)(30) of the Code, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof or therein, or
(iii) any estate or trust that is subject to United States federal income
taxation regardless of the source of its income.
Obsolete Parts. Parts which 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, the Bills of Sale, the Modification Agreement, the GTA, the Engine
Warranty Assignment, the Lease, the Lease Supplement, the Owner Participant
Guaranty, the Owner Trustee Guaranty, 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 Engine
Consent, the Tax Indemnity Agreement, each Liquidity Facility and the
Intercreditor 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) Davis Polk & Wardwell 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.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Ancillary Agreement I. The Ancillary Agreement I (Federal
Express Corporation Trust No. N590FE), dated the Delivery Date, among the
Lessee, the Owner Participant, the Indenture Trustee and the Owner Trustee as
it was originally executed on May 27, 1998.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N590FE), dated as of May 1,
1998, between the Owner Trustee and the Indenture Trustee, which together with
the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N590FE), dated May 27, 1998 attached thereto was
recorded as one instrument by the FAA on June 1, 1998 and assigned Conveyance
Number X136036.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N590FE), dated as of May 1, 1998, between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N590FE), dated May 27, 1998 attached thereto was
recorded as one instrument by the FAA on June 1, 1998 and assigned Conveyance
Number X136037.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participant.
Original Loan Participant. The entity listed on Schedule I to the
Original Participation Agreement and its successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N590FE), dated as of May 1, 1998, among
the Lessee, the Owner Participant, the Indenture Trustee, the Owner Trustee
and the Original Loan Participant as it was originally executed on May 27,
1998.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N590FE), dated as of May 1, 1998,
between the Lessee and the Owner Participant as it was originally executed on
May 27, 1998.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N590FE), dated as of May 1, 1998, between the Owner
Participant and the Owner Trustee as it was originally executed and filed with
the FAA on May 27, 1998.
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. Bankmont Financial Corp., a Delaware
corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Delivery Date, as amended and restated as of the Refunding 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 Article 5 of the Trust 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. State Street Bank and Trust Company, a
Massachusetts trust company, and any other provider of an Owner Trustee
Guaranty.
Owner Trustee Guaranty. The Owner Trustee Guaranty dated the Delivery
Date, as amended and restated as of the Refunding Date, by the Owner Trustee
Guarantor in favor of the Lessee, the Owner Participant, the Indenture Trustee
and the Pass Through Trustee, and any guaranty delivered in compliance with
Section 11.01(b)(ii) of the Participation Agreement.
Owner's Economic Return. The Owner Participant's (i) nominal
after-tax yield and aggregate after-tax cash flow during the Basic Term and
(ii) nominal after-tax yield and aggregate after-tax cash flow assumed to be
realized through the date on which the option under Section 4.02(a)(F) of the
Lease may be exercised, in each case, 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 and the EBO
Price, 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. N590FE), dated as of May 1, 1998, as amended and
restated as of June 15, 1998, among the Lessee, the Original Loan Participant,
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, prior to
replacement thereof in accordance with the Lease, which may be removed
therefrom.
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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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 Price. Has the meaning specified in Ancillary Agreement I.
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.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least three (3) Business Days
prior to such expected Refunding Date.
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. N676FE, N677FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N585FE, N620FE, N621FE and N623FE,
each dated as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, and the Trust Indenture and
Security Agreement for Federal Express Corporation Trust No. N675FE, dated as
of June 1, 1998, as amended and restated as of June 15, 1998, between State
Street Bank and Trust Company of Connecticut, National Association, as owner
trustee and First Security Bank, National Association, as 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. July 7, 1998, September 27, 2020 and each January
15 and July 15 commencing on July 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-D1F engine (or an
engine of the same or another manufacturer) of equal or greater value,
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-D1F engine, such replacement engine
must then be commonly used in the commercial aviation industry on McDonnell
Douglas MD-11 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, with respect to the Owner Participant, the president or
any vice president with direct responsibility for the transactions
contemplated by 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.
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
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association or any successor Owner Trustee in
its individual capacity.
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 and, accordingly, no further accrual or credit
shall be required whenever Stipulated Loss Value is to be calculated with
reference to any such date.
Stipulated Loss Value Determination Date. Each date set forth on
Schedule III of the Lease under the heading "Stipulated Loss Value Date."
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, EBO 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 Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement.
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 July 15, 2006 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, 2011 and January 15, 2014, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
fifth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2016.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
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. N590FE), dated as of May 1, 1998, as amended and restated as of June
15, 1998, 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.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
Warranty Bill of Sale. The full warranty bill of sale covering the
Aircraft (and specifically referring to each Engine) executed by the Lessee as
owner of the Aircraft in favor of the Owner Trustee and to be dated the
Delivery Date.
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TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N620FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE MCDONNELL DOUGLAS MD-11F AIRCRAFT
SERIAL NO. 48791, REGISTRATION NO. N620FE
- ------------------------------------------------------------------------------
Page
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TABLE OF CONTENTS
-----------------
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N620FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N620FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from the Lessee on
the Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date
and to receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from the Lessee on the Delivery Date, and taking all appropriate
action to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by the Lessee and SSB represents, warrants
and covenants that at all times on and after the Delivery Date the Aircraft
shall be free of all Lessor's Liens attributable to it, and that the Owner
Trustee shall comply with the last sentence of Section 3.05(b) hereof, or (b)
any representation or warranty as to the validity, legality or enforceability
of this Agreement or any other Operative Agreement to which the Owner Trustee
is a party, or any other document or instrument, or as to the correctness of
any statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N620FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N620FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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.
Aircraft. The Airframe to be sold by the Lessee 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 three Engines
(whether each 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the McDonnell Douglas MD-11F airframe bearing FAA Registration
Number N620FE and Manufacturer's serial number 48791, together with three
Pratt & Whitney 4462 engines.
Airframe. The McDonnell Douglas MD-11F 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 and any
Pre-Delivery Replacement Airframe which may be substituted pursuant to Section
2.04 of the Participation Agreement.
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. N620FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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.
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 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 March 15, 2024, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) under the Trust Agreement.
Bills of Sale. Collectively, the FAA Bill of Sale and the Warranty
Bill of Sale.
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. N620FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N620FE) dated as of June 15, 1998,
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.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. June 13, 1999.
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 the Lessee 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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 three Pratt & Whitney 4462 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, all Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent and Agreement. The Engine Consent and Agreement dated
as of June 15, 1998, executed by the Engine Manufacturer.
Engine Manufacturer. Pratt & Whitney, a Connecticut corporation.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 McDonnell Douglas MD-11 series aircraft equipped with
engines of the same make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the expiration of such six (6)
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 twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period shall have conformed
at least one McDonnell Douglas MD-11 series aircraft (but not necessarily the
Aircraft or the Airframe) to the requirements of any such law, rule,
regulation, order, or other action and shall have commenced regular commercial
use and shall be diligently carrying forward, on a non-discriminatory basis,
all steps necessary or desirable to permit the normal use of the Aircraft by
the Lessee. The date of such Event of Loss shall be (s) the 31st day or the
91st 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, 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 6 month or
12 month period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
FAA Bill of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority,
executed by the Lessee in favor of the Owner Trustee and to be dated the
Delivery Date.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
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.
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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N620FE), dated as of June 15, 1998, 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.
N620FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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 the Lessee to the
Lessor.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N620FE) dated as of June 15, 1998, 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. N620FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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, the Bills of
Sale, the Purchase Agreement, the Purchase Agreement Assignment, the Consent
and Agreement, the Engine Consent and Agreement, any Ancillary Agreement, 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, the Owner Participant or the Indenture
Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit F to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
Manufacturer. McDonnell Douglas Corporation, a wholly-owned
subsidiary of The Boeing Company.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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, the Bills of Sale, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Consent and Agreement, the
Lease, the Lease Supplement, the Owner Participant Guaranty, if any, 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 Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N682FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N620FE.
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, if any, 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 and the EBO Price, 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. N620FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Purchase Agreement No. A00431-B dated as of
March 17, 1998 between the Manufacturer 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. N620FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N682FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 Pratt & Whitney 4462 engine (or an engine of
the same or another manufacturer) of the same or of equal or greater value,
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 Pratt & Whitney 4462 engine, such replacement engine must then
be commonly used in the commercial aviation industry on McDonnell Douglas
MD-11 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N620FE), dated as of June 15, 1998, 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, 2005 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, 2015 or January 15, 2020, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N620FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
Warranty Bill of Sale. The full warranty bill of sale covering the
Aircraft (and specifically referring to each Engine) executed by the Lessee,
as seller in favor of the Owner Trustee, as buyer, and to be dated the
Delivery Date.
- ------------------------------------------------------------------------------
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N621FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE MCDONNELL DOUGLAS MD-11F AIRCRAFT
SERIAL NO. 48792, REGISTRATION NO. N621FE
- ------------------------------------------------------------------------------
Page
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TABLE OF CONTENTS
-----------------
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N621FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N621FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from the Lessee on
the Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date
and to receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from the Lessee on the Delivery Date, and taking all appropriate
action to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by the Lessee and SSB represents, warrants
and covenants that at all times on and after the Delivery Date the Aircraft
shall be free of all Lessor's Liens attributable to it, and that the Owner
Trustee shall comply with the last sentence of Section 3.05(b) hereof, or (b)
any representation or warranty as to the validity, legality or enforceability
of this Agreement or any other Operative Agreement to which the Owner Trustee
is a party, or any other document or instrument, or as to the correctness of
any statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N621FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N621FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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.
Aircraft. The Airframe to be sold by the Lessee 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 three Engines
(whether each 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the McDonnell Douglas MD-11F airframe bearing FAA Registration
Number N621FE and Manufacturer's serial number 48792, together with three
Pratt & Whitney 4462 engines.
Airframe. The McDonnell Douglas MD-11F 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 and any
Pre-Delivery Replacement Airframe which may be substituted pursuant to Section
2.04 of the Participation Agreement.
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. N621FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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.
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 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 June 15, 2024, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) under the Trust Agreement.
Bills of Sale. Collectively, the FAA Bill of Sale and the Warranty
Bill of Sale.
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. N621FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N621FE) dated as of June 15, 1998,
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.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. September 13, 1999.
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 the Lessee 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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 three Pratt & Whitney 4462 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, all Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent and Agreement. The Engine Consent and Agreement dated
as of June 15, 1998, executed by the Engine Manufacturer.
Engine Manufacturer. Pratt & Whitney, a Connecticut corporation.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 McDonnell Douglas MD-11 series aircraft equipped with
engines of the same make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the expiration of such six (6)
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 twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period shall have conformed
at least one McDonnell Douglas MD-11 series aircraft (but not necessarily the
Aircraft or the Airframe) to the requirements of any such law, rule,
regulation, order, or other action and shall have commenced regular commercial
use and shall be diligently carrying forward, on a non-discriminatory basis,
all steps necessary or desirable to permit the normal use of the Aircraft by
the Lessee. The date of such Event of Loss shall be (s) the 31st day or the
91st 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, 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 6 month or
12 month period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
FAA Bill of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority,
executed by the Lessee in favor of the Owner Trustee and to be dated the
Delivery Date.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
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.
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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N621FE), dated as of June 15, 1998, 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.
N621FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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 the Lessee to the
Lessor.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N621FE) dated as of June 15, 1998, 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. N621FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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, the Bills of
Sale, the Purchase Agreement, the Purchase Agreement Assignment, the Consent
and Agreement, the Engine Consent and Agreement, any Ancillary Agreement, 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, the Owner Participant or the Indenture
Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit F to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
Manufacturer. McDonnell Douglas Corporation, a wholly-owned
subsidiary of The Boeing Company.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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, the Bills of Sale, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Consent and Agreement, the
Lease, the Lease Supplement, the Owner Participant Guaranty, if any, 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 Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N682FE, N620FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N621FE.
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, if any, 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 and the EBO Price, 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. N621FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Purchase Agreement No. A00431-B dated as of
March 17, 1998 between the Manufacturer 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. N620FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N682FE, N620FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 Pratt & Whitney 4462 engine (or an engine of
the same or another manufacturer) of the same or of equal or greater value,
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 Pratt & Whitney 4462 engine, such replacement engine must then
be commonly used in the commercial aviation industry on McDonnell Douglas
MD-11 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N621FE), dated as of June 15, 1998, 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, 2005 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 or January 15, 2019, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N621FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
Warranty Bill of Sale. The full warranty bill of sale covering the
Aircraft (and specifically referring to each Engine) executed by the Lessee,
as seller in favor of the Owner Trustee, as buyer, and to be dated the
Delivery Date.
- --------------------------------------------------------------------------------
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N623FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE MCDONNELL DOUGLAS MD-11F AIRCRAFT
SERIAL NO. 48794, REGISTRATION NO. N623FE
- --------------------------------------------------------------------------------
Page
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TABLE OF CONTENTS
-----------------
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N623FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N623FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from the Lessee on
the Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date
and to receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from the Lessee on the Delivery Date, and taking all appropriate
action to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by the Lessee and SSB represents, warrants
and covenants that at all times on and after the Delivery Date the Aircraft
shall be free of all Lessor's Liens attributable to it, and that the Owner
Trustee shall comply with the last sentence of Section 3.05(b) hereof, or (b)
any representation or warranty as to the validity, legality or enforceability
of this Agreement or any other Operative Agreement to which the Owner Trustee
is a party, or any other document or instrument, or as to the correctness of
any statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N623FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N623FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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.
Aircraft. The Airframe to be sold by the Lessee 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 three Engines
(whether each 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the McDonnell Douglas MD-11F airframe bearing FAA Registration
Number N623FE and Manufacturer's serial number 48794, together with three
Pratt & Whitney 4462 engines.
Airframe. The McDonnell Douglas MD-11F 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 and any
Pre-Delivery Replacement Airframe which may be substituted pursuant to Section
2.04 of the Participation Agreement.
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. N623FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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.
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 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 June 15, 2024, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) under the Trust Agreement.
Bills of Sale. Collectively, the FAA Bill of Sale and the Warranty
Bill of Sale.
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. N623FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N623FE) dated as of June 15, 1998,
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.
Corporate Trust Administration. The Corporate Trust Administration
office of the Owner Trustee located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. September 13, 1999.
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 the Lessee 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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 three Pratt & Whitney 4462 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, all Engines
then leased to the Lessee pursuant to the Lease.
Engine Consent and Agreement. The Engine Consent and Agreement dated
as of June 15, 1998, executed by the Engine Manufacturer.
Engine Manufacturer. Pratt & Whitney, a Connecticut corporation.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 McDonnell Douglas MD-11 series aircraft equipped with
engines of the same make and model as the Engines for a period of six (6)
consecutive months, unless the Lessee, prior to the expiration of such six (6)
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 twelve (12) consecutive months, unless the Lessee,
prior to the expiration of such twelve (12) month period shall have conformed
at least one McDonnell Douglas MD-11 series aircraft (but not necessarily the
Aircraft or the Airframe) to the requirements of any such law, rule,
regulation, order, or other action and shall have commenced regular commercial
use and shall be diligently carrying forward, on a non-discriminatory basis,
all steps necessary or desirable to permit the normal use of the Aircraft by
the Lessee. The date of such Event of Loss shall be (s) the 31st day or the
91st 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, 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 6 month or
12 month period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
FAA Bill of Sale. The bill of sale for the Airframe on AC Form
8050-2, or such other form as may be approved by the Aeronautics Authority,
executed by the Lessee in favor of the Owner Trustee and to be dated the
Delivery Date.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
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.
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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N623FE), dated as of June 15, 1998, 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.
N623FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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 the Lessee to the
Lessor.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N623FE) dated as of June 15, 1998, 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. N623FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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, the Bills of
Sale, the Purchase Agreement, the Purchase Agreement Assignment, the Consent
and Agreement, the Engine Consent and Agreement, any Ancillary Agreement, 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, the Owner Participant or the Indenture
Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit F to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
Manufacturer. McDonnell Douglas Corporation, a wholly-owned
subsidiary of The Boeing Company.
Maturity. With respect to any Certificate, the date on which the
final principal amount of such Certificate is scheduled to be due and payable.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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, the Bills of Sale, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement, the Engine Consent and Agreement, the
Lease, the Lease Supplement, the Owner Participant Guaranty, if any, 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 Tax Indemnity
Agreement, each Liquidity Facility, the Intercreditor Agreement, the
Collateral Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N682FE, N620FE and N621FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N623FE.
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, if any, 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 and the EBO Price, 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. N623FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
Purchase Agreement. The Purchase Agreement No. A00431-B dated as of
March 17, 1998 between the Manufacturer 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. N620FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N682FE, N620FE and N621FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 Pratt & Whitney 4462 engine (or an engine of
the same or another manufacturer) of the same or of equal or greater value,
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 Pratt & Whitney 4462 engine, such replacement engine must then
be commonly used in the commercial aviation industry on McDonnell Douglas
MD-11 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N623FE), dated as of June 15, 1998, 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, 2005 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, 2016 or July 15, 2019, as the case may be, (ii) Section 4.02(a)(D)
or (E) of the Lease, a Rent Payment Date that is on or after the eighth
anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the Lease,
January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N623FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
Warranty Bill of Sale. The full warranty bill of sale covering the
Aircraft (and specifically referring to each Engine) executed by the Lessee,
as seller in favor of the Owner Trustee, as buyer, and to be dated the
Delivery Date.
- -------------------------------------------------------------------------------
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N675FE)
Dated as of June 1, 1998
Amended and Restated as of June 15, 1998
between
PMCC LEASING CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 789, REGISTRATION NO. N675FE
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
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PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 2
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent..................................... 2
Section 1.04. Prohibited Activity...................................... 3
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Rent, Etc................................................ 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Distributions after Release of Lien of Indenture......... 4
Section 2.04. Manner of Making Distributions........................... 4
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 5
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 6
Section 3.06. Certain Rights of Owner Trustee.......................... 7
Section 3.07. No Representations or Warranties as to Certain Matters... 9
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 10
Section 3.10. Definition of a Responsible Officer...................... 10
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 13
Section 3.17. Books and Records; Tax Returns........................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 14
Section 4.02. Termination at Option of the Trustor..................... 15
Section 4.03. Distribution of Lessor's Estate upon Termination......... 15
ARTICLE 5
[RESERVED]
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 16
Section 6.02. Limitations on the Trustor's Liability................... 17
Section 6.03. Fees; Compensation....................................... 17
Section 6.04. Supplements and Amendments............................... 17
Section 6.05. Nature of Title of Trustor............................... 17
Section 6.06. Power of Owner Trustee to Convey......................... 18
Section 6.07. Notices.................................................. 18
Section 6.08. Situs of Trust; Applicable Law; Severability............. 19
Section 6.09. Successors and Assigns................................... 19
Section 6.10. Headings and Table of Contents........................... 19
Section 6.11. Identification of Trust.................................. 19
Section 6.12. Counterparts............................................. 19
Section 6.13. Trustor Interest......................................... 19
Section 6.14. Performance by the Trustor............................... 20
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N675FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N675FE) dated
as of June 1, 1998, as amended and restated as of June 15, 1998 (this
"Agreement") between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, a national banking association (in its individual
capacity, "SSB", and not in its individual capacity but solely as trustee
hereunder, the "Owner Trustee"), and PMCC LEASING CORPORATION, a Delaware
corporation (together with its successors and permitted assigns, the
"Trustor"). The capitalized terms used herein, unless otherwise herein
defined or the context hereof shall otherwise require, shall have the
respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor and SSB have heretofore entered into the Original
Trust Agreement;
WHEREAS, the Original Trust Agreement was duly filed with the Federal
Aviation Administration on June 18, 1998;
WHEREAS, the Original Loan Participant participated in the payment of
the Purchase Price by providing financing as evidenced by the Original Loan
Certificates;
WHEREAS, pursuant to Article 15 of the Original Participation
Agreement, the Lessee, the Trustor and the Owner Trustee desire to refinance
all of the Original Loan Certificates on the Refunding Date; and
WHEREAS, the Trustor and SSB desire, in connection with such
refinancing, to amend and restate the Original Trust Agreement in its entirety
as herein provided.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree that the Original Trust Agreement
be and the same is hereby amended and restated in its entirety as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) on the Refunding Date to execute and deliver each of the
Operative Agreements to which the Owner Trustee is a party and to enter
into and perform the transactions contemplated thereby;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements and the Original Agreements to which the Owner Trustee
is a party or which the Owner Trustee is required to deliver pursuant to
the Operative Agreements and the Original Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the transactions contemplated hereby, the taking of any
such action by the Owner Trustee in the presence of the Trustor or its
counsel to evidence, conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby confirms, in its
individual capacity, that it holds and will continue to hold, in its capacity
as the Owner Trustee, the Lessor's Estate upon the trust herein set forth for
the use and benefit of the Trustor, subject, however, to the provisions of,
and the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent. The right and obligation of the
Owner Trustee to take the actions required by Section 1.01 hereof shall be
subject to the condition that the terms and conditions of Section 4.01 of the
Participation Agreement shall have been complied with in a manner satisfactory
to the Owner Trustee and the Trustor.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Rent, Etc. The Trustor and the Owner Trustee
acknowledge that the Lease will be security for the Certificates pursuant to
the Indenture which provides that all moneys payable by the Lessee to the
Owner Trustee under the Lease (other than Excepted Payments) are to be first
paid to the Indenture Trustee while the Lien of the Indenture is in effect,
for distribution in accordance with the terms of Article V of the Indenture.
Except for amounts received from the Indenture Trustee, which shall be
applicable only in accordance with clause (iii) below, the Owner Trustee shall
promptly apply each payment of the Rent (other than Excepted Payments),
Stipulated Loss Value, Termination Value, and any proceeds from the sale,
requisition or disposition of the Aircraft received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01, or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. Notwithstanding any other provision
contained herein, all Excepted Payments at any time received by the Owner
Trustee shall be distributed promptly to the applicable Person entitled
thereto, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01 and 2.02 hereof:
(a) all payments received and amounts realized by the Owner
Trustee under the Lease or otherwise with respect to the Aircraft or
any part thereof (including, without limitation, all payments
received pursuant to Section 17.01 of the Lease and amounts realized
upon the sale or lease of the Aircraft or any part thereof after the
termination of the Lease with respect thereto), to the extent
received or realized at any time after the Lien of the Indenture
shall have been released pursuant to the terms of the Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.03
remaining as part of the Lessor's Estate after the Lien of the
Indenture has been released,
shall, to the extent required, be retained by the Owner Trustee as
reimbursement for all expenses hereunder or under the Lease not theretofore
reimbursed under this Agreement, the Lease or otherwise and to which the Owner
Trustee is entitled to be reimbursed pursuant to the provisions thereof, and
any balance remaining thereafter shall be distributed to the Trustor.
Section 2.04. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to the account set forth in the
Participation Agreement or to such other account or accounts of the Trustor as
it may designate from time to time by written notice to the Owner Trustee (and
the Owner Trustee shall use best efforts to cause such funds to be transferred
by wire transfer on the same day as received, but in any case not later than
the next succeeding Business Day), and (ii) the Indenture Trustee pursuant to
this Article 2 by paying the amount to be distributed to the Indenture Trustee
in the manner specified in the Indenture; provided, that the Owner Trustee
shall invest overnight, for the benefit of the Trustor, in investments that
would be permitted by Article 23 of the Lease (but only to the extent funds
are received on or prior to 2:00 P.M. (Eastern Time) and such investments are
available and, if such investments are not available to the Owner Trustee in
investments which, after consultation with the Trustor, the Trustor shall
direct) all funds not transferred by wire transfer on the same day as they
were received. Notwithstanding the foregoing but subject always to the
provisions of, and the Lien created by, the Indenture, the Owner Trustee will,
if so requested by the Trustor by written notice, pay in immediately available
funds any and all amounts payable by the Owner Trustee hereunder to the
Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Article 5 of the
Lease, Sections 7.02(a) and (b) and 7.04 of the Participation Agreement or its
representations, warranties and covenants given in its individual capacity in
Sections 3.05 and 3.08 of the Indenture, (c) the failure to use ordinary care
in receiving, handling and disbursing funds, (d) Lessor's Liens attributable
to it in its individual capacity, and (e) taxes, fees, or other charges on,
based on, or measured by, any fees, commissions or compensation received by
SSB or the Owner Trustee in connection with the transactions contemplated by
the Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to, and agrees that it
will not, manage, control, possess, use, sell, lease, dispose of or otherwise
deal with the Aircraft, Airframe, Engines, any Part thereof or any other
property at any time constituting a part of the Lessor's Estate, or otherwise
to take or refrain from taking any action under or in connection with the
Operative Agreements, except (i) to execute and deliver the Operative
Agreements to which it is a party, (ii) to exercise and carry out or cause to
be exercised or carried out the rights, duties and obligations of the Owner
Trustee hereunder and under the other Operative Agreements, or (iii) as
expressly provided in written instructions from the Trustor given pursuant to
Section 3.03 or 3.04 hereof; provided, that nothing in this Section 3.02 shall
limit in any manner the obligations of the Owner Trustee hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt telephone or facsimile
notice, followed by prompt confirmation thereof by certified mail, postage
prepaid (in any event within two Business Days of the discovery thereof), in
accordance with Article 14 of the Participation Agreement, of such Default,
Event of Default, Indenture Default or Indenture Event of Default. Subject to
the terms of Section 3.06(e) hereof and the rights of the Indenture Trustee
under the Indenture, the Owner Trustee shall take such action with respect to
such Default, Event of Default, Indenture Default or Indenture Event of
Default as shall be specified in written instructions from the Trustor;
provided that the Owner Trustee shall have no duty to take any (and shall take
no) action whatsoever in the absence of written instructions from the Trustor.
For all purposes of this Agreement and the Lease, in the absence of actual
knowledge of a Responsible Officer of the Owner Trustee, the Owner Trustee
shall not be deemed to have knowledge of a Default, Event of Default,
Indenture Default or Indenture Event of Default unless notified in writing by
the Lessee, the Trustor, the Indenture Trustee or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with written instructions
given by the Trustor hereunder, and no implied duties, covenants or
obligations shall be read into this Agreement, any such instructions or the
Operative Agreements against the Owner Trustee, and the Owner Trustee agrees
that it will not manage, control, possess, use, sell, lease, dispose of or
otherwise deal with the Aircraft or any part of the Lessor's Estate except as
required by the terms of the Operative Agreements, any such instructions and as
otherwise provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require SSB in its individual capacity
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements or the Original Agreements (including those furnished to the
Indenture Trustee pursuant to the terms of the Indenture) and not otherwise
furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner Trustee
shall not be authorized and shall have no power to "vary the investment" of the
Trustor within the meaning of Treasury Regulations Section 301.7701-4(c)(1),
it being understood that the Owner Trustee shall have the power and authority
to fulfill its obligations under Section 2.06 hereof and Article 23 of the
Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder or under any of the
other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its duties
by or through such attorneys, agents and servants as it shall appoint with
due care, and it shall be entitled to rely upon the advice of counsel
reasonably selected by it with due care and shall be protected by the
advice of such counsel in anything done or omitted to be done in accordance
with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except as
otherwise provided in written instructions given to the Owner Trustee by the
Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor and (to the extent provided in the
Indenture) the Indenture Trustee copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever right, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and may be deposited by the
Owner Trustee under such conditions as may be prescribed or permitted by law
for trust funds, or may be invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Department of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, in form and substance
acceptable to the predecessor Owner Trustee and the Trustor and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Owner Trustee by an instrument in
writing signed by it, shall appoint one or more Persons approved by the
Trustor to act as co-trustee, or co-trustees, jointly with the Owner Trustee,
or separate trustee or separate trustees (except insofar as local law makes it
necessary or prudent or desirable for any such co-trustee or separate trustee
to act alone), of all or any part of the Lessor's Estate, and to vest in such
Person or Persons, in such capacity, such title to the Lessor's Estate or any
part thereof, and such rights, powers, duties, trusts or obligations as the
Trustor may consider necessary or prudent or desirable. The Owner Trustee
shall not be liable for any act or omission of any co-trustee or separate
trustee appointed under this Section 3.14. No appointment of, or action by,
any co-trustee or separate trustee appointed under this Section 3.14 will
relieve the Owner Trustee of any of its obligations under any Operative
Agreement or otherwise affect any of the terms of the Indenture or adversely
affect the interests of the Indenture Trustee or the Certificate Holders in
the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder except as otherwise provided
hereunder; and
(E) the Trustor, at any time, by an instrument in writing may remove
any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith in what
it deems to be the best interests of the Trustor or for any failure to act in
any situation described above in this Section 3.15. The provisions of this
Section 3.15 shall not be applicable to the Owner Trustee's obligations set
forth in the last sentence of Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Books and Records; Tax Returns. The Owner Trustee
shall be responsible for the keeping of all appropriate books and records
relating to its receipt and disbursement of all moneys under this Agreement or
any Operative Agreement and shall, upon the request of the Trustor or its duly
authorized representative, make available such books and records at its
principal trust office during normal business hours for inspection and
copying. The Owner Trustee agrees to sign and file all returns with respect
to Taxes that the Trustor prepares (or causes to be prepared) and directs the
Owner Trustee to sign and file. The Owner Trustee, upon request, will furnish
the Trustor with all such information as may be reasonably required or
necessary from the Owner Trustee in connection with the preparation of such tax
returns and in connection with any other filing or audit and related litigation
obligations. At the request of the Trustor, and at the expense of the Lessee,
the Owner Trustee shall file an application with the Internal Revenue Service
for a taxpayer identification number with respect to the trust created
hereunder and prepare or cause to be prepared and sign and/or file the Federal
fiduciary tax return with respect to Taxes due and payable by the Trust in
connection with the transactions contemplated hereby or by any other Operative
Agreement; provided, however, that the Owner Trustee shall send a completed
copy of each such return to the Trustor not more than 60 nor less than 30 days
prior to the due date of such return; provided that the Owner Trustee shall
have timely received all necessary information to complete and deliver to the
Trustor such return. The Trustor, upon request, will furnish the Owner Trustee
with all such information as may be required from the Trustor in connection
with the preparation of such income tax returns. The Owner Trustee shall keep
copies of all returns delivered to or filed by it.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(b) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
Section 4.02. Termination at Option of the Trustor. Notwithstanding
Section 4.01 hereof, this Agreement and the trust created hereby shall
terminate and the Trust Estate shall be distributed to the Trustor, and this
Agreement shall be of no further force and effect, upon the election of the
Trustor by notice to the Owner Trustee, if such notice shall be accompanied by
the written agreement (in form and substance satisfactory to the Owner
Trustee) of the Trustor assuming all the obligations of the Owner Trustee
under or contemplated by the Operative Agreements or incurred by it as trustee
hereunder and releasing the Owner Trustee therefrom; provided, however, that
such notice may be given only after the time the Lien of the Indenture is
discharged under Section 14.01 of the Indenture and the Lease has terminated
unless the Trustor shall have received the prior written consent of the
Indenture Trustee to any such termination in which case such notice may be
given while the Lien of the Indenture is outstanding.
Section 4.03. Distribution of Lessor's Estate upon Termination.
Upon any termination of this trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that (i) if
at the time of any termination the Lease remains in force and effect, then the
Lessor's Estate shall be sold as a unit (and not in parcels) and subject to
the Lease, and (ii) in the event such written instructions are not delivered
to the Owner Trustee on or before the date of termination, the Owner Trustee
shall transfer title to the Lessor's Estate to the Trustor. Upon making such
transfer or sale and accounting for all funds which have come into its hands,
the Owner Trustee shall be entitled to receipt of any sums due and owing to
the Owner Trustee for expenses incurred pursuant hereto as set forth in
Section 2.05 hereof.
ARTICLE 5
[RESERVED]
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor shall assume liability
for, and shall indemnify, protect, save and keep harmless SSB from and against
any and all liabilities, obligations, losses, damages, penalties, taxes,
claims, actions, proceedings, suits, costs (including reasonable attorneys'
fees), expenses and disbursements of any kind and nature whatsoever ("Trust
Claims") imposed on, incurred by or asserted against the Owner Trustee or SSB,
as the case may be (but only to the extent the Owner Trustee or SSB, as the
case may be, is not indemnified by the Lessee for such Trust Claims under any
Operative Agreement or is not indemnified by any other Person for such Trust
Claims, within a reasonable time after demand therefor), in any way relating
to or arising out of (X) the Trust Estate or any of the properties included
therein and (Y) the administration of the Trust Estate or the action or
inaction of the Owner Trustee hereunder or under the Operative Agreements
including, but not limited to, claims under any Environmental Laws; provided,
however, that (a) the Trustor shall not be required to indemnify the Owner
Trustee or SSB in the case of (i) willful misconduct, negligence with respect
to handling of funds, gross negligence or bad faith of the Owner Trustee or
SSB, as the case may be, (ii) the Owner Trustee's or SSB's failure to use
ordinary care in the handling of monies constituting part of the Trust Estate,
(iii) Taxes of the Owner Trustee or SSB, as the case may be, that are based on
or measured by the compensation received by SSB for acting as Owner Trustee
hereunder, and (iv) items excluded from indemnification by the Lessee as, as
to the extent, provided in Sections 8.01(b)(i), (ii) and (iv)-(xii) and
9.01(b)(i), (iii)-(ix) of the Participation Agreement, and (b) the Trustor
shall not be required to indemnify with respect to Trust Claims resulting from
a breach of the covenants by SSB in Article 3 hereof or Trust Claims resulting
because any representation or warranty of the Owner Trustee or SSB, as the
case may be, contained in any Operative Agreement proves to be untrue or
inaccurate or the failure by the Owner Trustee or SSB, as the case may be, to
perform or observe any agreements, covenants or conditions to be performed or
observed by it in any of the Operative Agreements. None of the foregoing
exclusions shall limit the obligation of the Trustor to indemnify SSB (but SSB
shall still be required to seek indemnification from the Lessee before making
a claim against the Trustor hereunder unless such exclusion is otherwise
limited under Sections 8.01(b) and 9.01(b) of the Participation Agreement),
(i) for actions taken in accordance with written instructions received from
the Trustor, and (ii) to the extent such exclusions are attributable to acts
or omissions of the Trustor. The payor of any indemnity under this Section
6.01 shall be subrogated to any right of the person indemnified in respect of
the matter as to which such indemnity was paid. The indemnities contained in
this Section 6.01 shall survive the termination of this Agreement.
Section 6.02. Limitations on the Trustor's Liability. The Trustor
shall not have any liability for the performance of this Agreement except as
expressly set forth herein.
Section 6.03. Fees; Compensation. Except as provided in Section
3.06(e) or 6.01 hereof, the Owner Trustee agrees that it shall have no right
against the Trustor or the Trust Estate for any fee as compensation for its
services hereunder.
Section 6.04. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Trustor and any other necessary parties may agree to in writing and as may be
specified in such request, or execute and deliver such written waiver of the
terms of any of the Operative Agreements as may be agreed to in writing by the
Trustor and as may be specified in such request; provided, that (i) the Owner
Trustee shall not execute any such supplement, amendment, waiver or
modification without the prior written consent of the Trustor, (ii) if in the
reasonable opinion of the Owner Trustee any document required to be executed
by it pursuant to this Section adversely affects any right or duty of, or
immunity or indemnity in favor of, the Owner Trustee under this Agreement or
any other Operative Agreement, the Owner Trustee may in its discretion
decline to execute such document and (iii) any amendment or supplement to this
Agreement shall comply with the provisions of Section 7.13 of the
Participation Agreement. It shall not be necessary that any request pursuant
to this Section specify the particular form of the proposed document to be
executed pursuant to such request, but it shall be sufficient if such request
shall indicate the substance thereof. Promptly after the execution by SSB or
the Owner Trustee of any document pursuant to this Section, the Owner Trustee
shall mail a conformed copy thereof to the Trustor, the Indenture Trustee and
the Lessee, but the failure of the Owner Trustee to mail such conformed copies
shall not impair or affect the validity of such document.
Section 6.05. Nature of Title of Trustor. The Trustor shall not
have any legal title to any part of the Lessor's Estate. No transfer, by
operation of law or otherwise, of the right, title and interest of the Trustor
in and to the Lessor's Estate or the trust hereunder shall operate to
terminate this Agreement or Lessor's Estate.
Section 6.06. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee in and to the
Operative Agreements or the right, title and interest of the Owner Trustee and
the Trustor in and to the Aircraft or such part thereof. No purchaser or
other grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such assignment, sale, transfer or conveyance or
as to the application of any sale or other proceeds with respect thereto by
the Owner Trustee.
Section 6.07. 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 other means, when
received or personally delivered, addressed:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: PMCC Leasing Corporation
200 First Stamford Place
Stamford, Connecticut 06902
Attention: Vice President Leasing
with a copy to Director, Portfolio Administration
Telephone: (914) 335-5000
Facsimile: (914) 335-8301
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.08. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.09. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Section 7.03(d) of the Participation Agreement.
Section 6.10. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.11. Identification of Trust. This trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N675FE."
Section 6.12. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.13. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this trust (as opposed to
the Trustor's beneficial interest in this trust).
Section 6.14. Performance by the Trustor. Any obligation of the
Owner Trustee hereunder or under any Operative Agreement or other document
contemplated herein may be performed by the Trustor and any such performance
shall not be construed as a revocation of the trust created hereby.
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
PMCC LEASING CORPORATION
By: _________________________________________________
Name: Thomas W. Urbach
Title: Vice President
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N675FE)
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 and except in the case of the
Original Agreements, (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.
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.
Agent. Morgan Guaranty Trust Company of New York and its successors
and permitted assigns as Agent for the Original Loan Participant pursuant to
Article 16 of the Original Participation Agreement.
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 dated the Delivery Date executed by the
Manufacturer and guaranteeing AVSA's Warranty Bill of Sale.
Aircraft. The Airframe (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.
Airframe. The Airbus A300F4-605R aircraft (excluding the Engines or
engines from time to time installed thereon) 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.
Amendment No. 1 to the Original Tax Indemnity Agreement. Amendment
No. 1 to the Original Tax Indemnity Agreement (Federal Express Corporation
Trust No. N675FE), dated as of June 15, 1998, between the Lessee and the Owner
Participant.
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 the Refunding 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. N675FE), dated the Delivery Date, as amended and
restated on the Refunding 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. N675FE), dated the Refunding 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.
Appraisal. The report prepared by BK Associates, Inc. and delivered
to the Owner Participant (with an abbreviated report to the Lessee) on the
Delivery Date pursuant to Section 4.01(n) of the Original 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
June 1, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 dated the
Delivery Date.
AVSA's Warranty Bill of Sale. The full warranty bill 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 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 18, 2021, 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.
Breakage Costs. Has the meaning specified in Schedule II to the
Original Participation Agreement.
Business Day. Any day on which commercial banks are not authorized or
required to close in New York, New York, Stamford, Connecticut, 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.
Certificates. The Equipment Trust Certificates (Federal Express
Corporation Trust No. N675FE), 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 Refunding 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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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
refunding of the Original Loan Certificates.
Code. Except as otherwise provided, the Internal Revenue Code of
1986, as amended from time to time.
Consent and Agreement. The Consent and Agreement dated as of June 1,
1998, 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
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. June 18, 1998.
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 June 1, 1998, 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. N675FE), dated as of June 1, 1998, 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.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 June
1, 1998, 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 Agent (to the extent set forth in Articles 8 and 9 of
the Original Participation Agreement), the Subordination Agent, in its
individual capacity and in its capacity as Subordination Agent, each Liquidity
Provider, the Owner Participant, the Original Loan Participant (to the extent
set forth in Articles 8 and 9 of the Original Participation Agreement), 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. N675FE), dated as of June 1, 1998, as amended
and restated as of June 15, 1998, 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.
N675FE), dated June 18, 1998, 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
June 15, 1998, 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.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N675FE) dated as of June 1, 1998, as amended and restated as of June 15, 1998,
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. N675FE), dated June 18, 1998, 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 Aircraft, the Lease, any Lease Supplement, the
Participation Agreement, AVSA's FAA Bill of Sale, AVSA's Warranty Bill 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, the Owner
Participant, the Original Loan Participants or any other Holder or the
Indenture Trustee) 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 the Original Loan Participants or any other Holder, 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, the 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.
Liquidity Facility. Has the meaning specified in Section 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in the Intercreditor
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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (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. 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 Bill of Sale, AVSA's Warranty Bill 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,
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, any Assignment and Assumption Agreement, each Liquidity Facility
and the Intercreditor 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) Davis Polk & Wardwell 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.
Original Agreements. The documents and instruments delivered on the
Delivery Date in connection with the transactions contemplated by the Original
Participation Agreement.
Original Ancillary Agreement I. The Ancillary Agreement I (Federal
Express Corporation Trust No. N675FE), dated the Delivery Date, among the
Lessee, the Owner Participant, the Indenture Trustee and the Owner Trustee as
it was originally executed on June 18, 1998.
Original Indenture. The Trust Indenture, Mortgage and Security
Agreement (Federal Express Corporation Trust No. N675FE), dated as of June 1,
1998, between the Owner Trustee and the Indenture Trustee, which together with
the Indenture and Security Agreement Supplement No. 1 (Federal Express
Corporation Trust No. N675FE), dated June 18, 1998 attached thereto was
recorded as one instrument by the FAA on June 22, 1998 and assigned Conveyance
Number BB27401.
Original Lease. The Lease Agreement (Federal Express Corporation
Trust No. N675FE), dated as of June 1, 1998, between the Owner Trustee as
lessor, and the Lessee, which together with Lease Supplement No. 1 (Federal
Express Corporation Trust No. N675FE), dated June 18, 1998 attached thereto
was recorded as one instrument by the FAA on June 22, 1998 and assigned
Conveyance Number BB27402.
Original Loan Certificates. The loan certificates issued on the
Delivery Date to the Original Loan Participant.
Original Loan Participant. The entity listed on Schedule I to the
Original Participation Agreement and its successors and assigns (other than
any assignees in connection with the Refunding Date).
Original Participation Agreement. The Participation Agreement
(Federal Express Corporation Trust No. N675FE), dated as of June 1, 1998,
among the Lessee, the Owner Participant, the Indenture Trustee, the Owner
Trustee and the Original Loan Participant as it was originally executed on
June 18, 1998.
Original Tax Indemnity Agreement. The Tax Indemnity Agreement
(Federal Express Corporation Trust No. N675FE), dated as of June 1, 1998,
between the Lessee and the Owner Participant as it was originally executed on
June 18, 1998.
Original Trust Agreement. The Trust Agreement (Federal Express
Corporation Trust No. N675FE), dated as of June 1, 1998, between the Owner
Participant and the Owner Trustee as it was originally executed and filed with
the FAA on June 18, 1998.
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. Philip Morris Capital Corporation, a
Delaware corporation, and any other provider of an Owner Participant Guaranty.
Owner Participant Guaranty. The Owner Participant Guaranty dated the
Delivery Date, as amended and restated as of the Refunding 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. State Street Bank and Trust Company, a
Massachusetts trust company, and any other provider of an Owner Trustee
Guaranty.
Owner Trustee Guaranty. The Owner Trustee Guaranty dated the Delivery
Date, as amended and restated as of the Refunding Date, by the Owner Trustee
Guarantor in favor of the Lessee, the Owner Participant, the Indenture Trustee
and the Pass Through Trustee, and 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. N675FE), dated as of June 1, 1998, as amended and
restated as of June 15, 1998, among the Lessee, the Original Loan Participant,
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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. N675FE), dated as of June 15, 1998,
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.
Refunding Date. A Business Day on which the refunding of the
Original Loan Certificates occurs, the expected date thereof having been
specified by the Lessee in a written notice given to the parties to the
Participation Agreement and the Underwriters at least three (3) Business Days
prior to such expected Refunding Date.
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.
Regulatory Change. Any change after June 18, 1998 in Federal, state
or foreign law or regulations or the adoption or making after such date of any
interpretation, directive or request applying to a class of financial
institutions including any Certificate Holder of or under any Federal, state
or foreign law or regulation (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N676FE, N677FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N585FE, N620FE, N621FE and N623FE,
each dated as of June 15, 1998, between the State Street Bank and Trust
Company of Connecticut, National Association, as owner trustee and First
Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N590FE, dated as of May 1, 1998, as amended and restated as of June 15, 1998,
between the State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as 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. July 7, 1998, September 18, 2021 and each January
15 and July 15 commencing on July 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 Department, 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.
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
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
SSB. State Street Bank and Trust Company of Connecticut, National
Association, a national banking association or any successor Owner Trustee in
its individual capacity.
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 Original Tax Indemnity Agreement as
amended by Amendment No. 1 to the Original Tax Indemnity Agreement.
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, 2005 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, 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. N675FE), dated as of June 1, 1998, as amended and restated as of
June 15, 1998, 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.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
==============================================================================
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N676FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 790, REGISTRATION NO. N676FE
==============================================================================
TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N676FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N676FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from AVSA on the
Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date and to
receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from AVSA on the Delivery Date, and taking all appropriate action
to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee to
take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N676FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N676FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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 Bill 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the Airbus A300F4-605R airframe bearing FAA Registration Number
N676FE and Manufacturer's serial number 790, 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 and any Pre-Delivery Replacement
Airframe which may be substituted pursuant to Section 2.04 of the
Participation Agreement.
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. N676FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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
June 15, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 Bill of Sale. The full warranty bill 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 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 July 15, 2023, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) 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. N676FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N676FE) dated as of June 15, 1998,
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 June 15,
1998 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. October 13, 1998.
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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 June 15, 1998,
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. N676FE), dated as of June 15, 1998, between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 six (6) consecutive
months, unless the Lessee, prior to the expiration of such six (6) 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 twelve (12) consecutive months, unless the Lessee, prior to the
expiration of such twelve (12) month period shall have conformed at least one
Airbus A300-600 series aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month
period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
French Pledge Agreement. The French Pledge Agreement (Federal Express
Corporation Trust No. N676FE) dated as of June 15, 1998, 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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N676FE), dated as of June 15, 1998, 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.
N676FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N676FE) dated as of June 15, 1998, 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. N676FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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 Bill
of Sale, AVSA's Warranty Bill 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, the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit G to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
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.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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 Bill of Sale, AVSA's Warranty Bill 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, if any, 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 Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N677FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N676FE.
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, if any, 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 and the EBO Price, 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. N676FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
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. N676FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N677FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 the same or of equal or greater
value, 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N676FE), dated as of June 15, 1998, 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, 2005 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, 2016 or January 15, 2020, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N676FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
==============================================================================
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N677FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 791, REGISTRATION NO. N677FE
==============================================================================
Page
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TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N677FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N677FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from AVSA on the
Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date and to
receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from AVSA on the Delivery Date, and taking all appropriate action
to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N677FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N677FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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 Bill 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the Airbus A300F4-605R airframe bearing FAA Registration Number
N677FE and Manufacturer's serial number 791, 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 and any Pre-Delivery Replacement
Airframe which may be substituted pursuant to Section 2.04 of the
Participation Agreement.
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. N677FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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
June 15, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 Bill of Sale. The full warranty bill 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 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 August 26, 2023, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) 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. N677FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N677FE) dated as of June 15, 1998,
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 June 15,
1998 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. November 24, 1998.
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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 June 15, 1998,
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. N677FE), dated as of June 15, 1998, between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 six (6) consecutive
months, unless the Lessee, prior to the expiration of such six (6) 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 twelve (12) consecutive months, unless the Lessee, prior to the
expiration of such twelve (12) month period shall have conformed at least one
Airbus A300-600 series aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month
period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
French Pledge Agreement. The French Pledge Agreement (Federal Express
Corporation Trust No. N677FE) dated as of June 15, 1998, 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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N677FE), dated as of June 15, 1998, 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.
N677FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N677FE) dated as of June 15, 1998, 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. N677FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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 Bill
of Sale, AVSA's Warranty Bill 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, the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit G to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
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.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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 Bill of Sale, AVSA's Warranty Bill 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, if any, 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 Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N677FE.
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, if any, 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 and the EBO Price, 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. N677FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
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. N677FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N678FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 the same or of equal or greater
value, 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N677FE), dated as of June 15, 1998, 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, 2005 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 or July 15, 2019, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N677FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
- -------------------------------------------------------------------------------
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N678FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 792, REGISTRATION NO. N678FE
- -------------------------------------------------------------------------------
Page
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TABLE OF CONTENTS
-----------------
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee................ 1
Section 1.02. Declaration of Trust........................................ 2
Section 1.03. Conditions Precedent and Advances by Trustor................ 2
Section 1.04. Prohibited Activity......................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc.............................. 3
Section 2.02. Excepted Payments........................................... 4
Section 2.03. Other Receipts.............................................. 4
Section 2.04. Distributions after Default................................. 4
Section 2.05. Distributions after Release of Lien of Indenture............ 4
Section 2.06. Manner of Making Distributions.............................. 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties.............................. 5
Section 3.02. Limitation on Authority of Owner Trustee.................... 6
Section 3.03. Notice of Default........................................... 6
Section 3.04. Action Upon Instructions.................................... 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee........ 7
Section 3.06. Certain Rights of Owner Trustee............................. 8
Section 3.07. No Representations or Warranties as to Certain Matters...... 10
Section 3.08. Status of Moneys Received................................... 10
Section 3.09. Self-Dealing................................................ 11
Section 3.10. Definition of a Responsible Officer......................... 11
Section 3.11. Resignation or Removal of Owner Trustee..................... 11
Section 3.12. Estate and Rights of Successor Owner Trustee................ 11
Section 3.13. Merger or Consolidation of SSB.............................. 12
Section 3.14. Co-Trustees................................................. 12
Section 3.15. Interpretation of Agreements................................ 13
Section 3.16. Not Acting in Individual Capacity........................... 14
Section 3.17. Tax Returns................................................. 14
Section 3.18. Independent Business........................................ 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination................................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination............ 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification............................................. 17
Section 6.02. Supplements and Amendments.................................. 19
Section 6.03. Nature of Title of Trustor.................................. 19
Section 6.04. Power of Owner Trustee to Convey............................ 19
Section 6.05. Notices..................................................... 20
Section 6.06. Situs of Trust; Applicable Law; Severability................ 21
Section 6.07. Successors and Assigns...................................... 21
Section 6.08. Headings and Table of Contents.............................. 21
Section 6.09. Identification of Trust..................................... 21
Section 6.10. Counterparts................................................ 21
Section 6.11. Trustor Interest............................................ 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N678FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N678FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from AVSA on the
Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date and to
receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from AVSA on the Delivery Date, and taking all appropriate action
to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N678FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N678FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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 Bill 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the Airbus A300F4-605R airframe bearing FAA Registration Number
N678FE and Manufacturer's serial number 792, 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 and any Pre-Delivery Replacement
Airframe which may be substituted pursuant to Section 2.04 of the
Participation Agreement.
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. N678FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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
June 15, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 Bill of Sale. The full warranty bill 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 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 March 23, 2023, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) 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. N678FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N678FE) dated as of June 15, 1998,
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 June 15,
1998 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. December 22, 1998.
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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 June 15, 1998,
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. N678FE), dated as of June 15, 1998, between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 six (6) consecutive
months, unless the Lessee, prior to the expiration of such six (6) 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 twelve (12) consecutive months, unless the Lessee, prior to the
expiration of such twelve (12) month period shall have conformed at least one
Airbus A300-600 series aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month
period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
French Pledge Agreement. The French Pledge Agreement (Federal Express
Corporation Trust No. N678FE) dated as of June 15, 1998, 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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N678FE), dated as of June 15, 1998, 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.
N678FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N678FE) dated as of June 15, 1998, 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. N678FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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 Bill
of Sale, AVSA's Warranty Bill 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, the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit G to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
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.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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 Bill of Sale, AVSA's Warranty Bill 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, if any, 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 Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N678FE.
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, if any, 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 and the EBO Price, 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. N678FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
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. N678FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N679FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 the same or of equal or greater
value, 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N678FE), dated as of June 15, 1998, 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, 2005 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, 2015 or July 15, 2018, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2017.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N678FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
==============================================================================
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N679FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 793, REGISTRATION NO. N679FE
==============================================================================
TABLE OF CONTENTS
-----------------
Page
----
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N679FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N679FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from AVSA on the
Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date and to
receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from AVSA on the Delivery Date, and taking all appropriate action
to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N679FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N679FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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 Bill 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the Airbus A300F4-605R airframe bearing FAA Registration Number
N679FE and Manufacturer's serial number 793, 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 and any Pre-Delivery Replacement
Airframe which may be substituted pursuant to Section 2.04 of the
Participation Agreement.
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. N679FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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
June 15, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 Bill of Sale. The full warranty bill 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 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 October 22, 2023, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) 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. N679FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N679FE) dated as of June 15, 1998,
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 June 15,
1998 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. January 20, 1999.
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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 June 15, 1998,
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. N679FE), dated as of June 15, 1998, between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 six (6) consecutive
months, unless the Lessee, prior to the expiration of such six (6) 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 twelve (12) consecutive months, unless the Lessee, prior to the
expiration of such twelve (12) month period shall have conformed at least one
Airbus A300-600 series aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month
period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
French Pledge Agreement. The French Pledge Agreement (Federal Express
Corporation Trust No. N679FE) dated as of June 15, 1998, 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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N679FE), dated as of June 15, 1998, 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.
N679FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N679FE) dated as of June 15, 1998, 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. N679FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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 Bill
of Sale, AVSA's Warranty Bill 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, the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit G to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
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.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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 Bill of Sale, AVSA's Warranty Bill 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, if any, 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 Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N679FE.
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, if any, 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 and the EBO Price, 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. N679FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
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. N679FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N680FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 the same or of equal or greater
value, 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N679FE), dated as of June 15, 1998, 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, 2005 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 or July 15, 2019, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N679FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
==============================================================================
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N680FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 794, REGISTRATION NO. N680FE
==============================================================================
Page
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TABLE OF CONTENTS
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N680FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N680FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from AVSA on the
Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date and to
receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from AVSA on the Delivery Date, and taking all appropriate action
to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N680FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N680FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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 Bill 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the Airbus A300F4-605R airframe bearing FAA Registration Number
N680FE and Manufacturer's serial number 794, 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 and any Pre-Delivery Replacement
Airframe which may be substituted pursuant to Section 2.04 of the
Participation Agreement.
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. N680FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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
June 15, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 Bill of Sale. The full warranty bill 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 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 May 12, 2023, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) 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. N680FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N680FE) dated as of June 15, 1998,
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 June 15,
1998 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. February 10, 1999.
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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 June 15, 1998,
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. N680FE), dated as of June 15, 1998, between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 six (6) consecutive
months, unless the Lessee, prior to the expiration of such six (6) 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 twelve (12) consecutive months, unless the Lessee, prior to the
expiration of such twelve (12) month period shall have conformed at least one
Airbus A300-600 series aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month
period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
French Pledge Agreement. The French Pledge Agreement (Federal Express
Corporation Trust No. N680FE) dated as of June 15, 1998, 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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N680FE), dated as of June 15, 1998, 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.
N680FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N680FE) dated as of June 15, 1998, 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. N680FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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 Bill
of Sale, AVSA's Warranty Bill 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, the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit G to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
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.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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 Bill of Sale, AVSA's Warranty Bill 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, if any, 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 Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N680FE.
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, if any, 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 and the EBO Price, 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. N680FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
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. N680FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N681FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 the same or of equal or greater
value, 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N680FE), dated as of June 15, 1998, 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, 2005 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, 2016 or July 15, 2019, as the case may be, (ii) Section 4.02(a)(D)
or (E) of the Lease, a Rent Payment Date that is on or after the eighth
anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the Lease,
January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N680FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
==============================================================================
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N681FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 799, REGISTRATION NO. N681FE
==============================================================================
Page
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TABLE OF CONTENTS
-----------------
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N681FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N681FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from AVSA on the
Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date and to
receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from AVSA on the Delivery Date, and taking all appropriate action
to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N681FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N681FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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 Bill 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the Airbus A300F4-605R airframe bearing FAA Registration Number
N681FE and Manufacturer's serial number 799, 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 and any Pre-Delivery Replacement
Airframe which may be substituted pursuant to Section 2.04 of the
Participation Agreement.
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. N681FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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
June 15, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 Bill of Sale. The full warranty bill 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 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 20, 2023, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) 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. N681FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N681FE) dated as of June 15, 1998,
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 June 15,
1998 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. August 18, 1999.
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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 June 15, 1998,
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. N681FE), dated as of June 15, 1998, between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 six (6) consecutive
months, unless the Lessee, prior to the expiration of such six (6) 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 twelve (12) consecutive months, unless the Lessee, prior to the
expiration of such twelve (12) month period shall have conformed at least one
Airbus A300-600 series aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month
period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
French Pledge Agreement. The French Pledge Agreement (Federal Express
Corporation Trust No. N681FE) dated as of June 15, 1998, 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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N681FE), dated as of June 15, 1998, 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.
N681FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N681FE) dated as of June 15, 1998, 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. N681FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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 Bill
of Sale, AVSA's Warranty Bill 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, the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit G to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
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.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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 Bill of Sale, AVSA's Warranty Bill 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, if any, 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 Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N681FE.
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, if any, 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 and the EBO Price, 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. N681FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
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. N681FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N682FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 the same or of equal or greater
value, 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N681FE), dated as of June 15, 1998, 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, 2005 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 or July 15, 2019, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N681FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.
==============================================================================
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N682FE)
Dated as of June 15, 1998
between
FEDERAL EXPRESS CORPORATION,
Trustor
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
Owner Trustee
COVERING ONE AIRBUS A300F4-605R AIRCRAFT
SERIAL NO. 800, REGISTRATION NO. N682FE
==============================================================================
Page
----
TABLE OF CONTENTS
-----------------
PARTIES.................................................................... 1
RECITALS................................................................... 1
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee............. 1
Section 1.02. Declaration of Trust..................................... 2
Section 1.03. Conditions Precedent and Advances by Trustor............. 2
Section 1.04. Prohibited Activity...................................... 2
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc........................... 3
Section 2.02. Excepted Payments........................................ 4
Section 2.03. Other Receipts........................................... 4
Section 2.04. Distributions after Default.............................. 4
Section 2.05. Distributions after Release of Lien of Indenture......... 4
Section 2.06. Manner of Making Distributions........................... 5
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties........................... 5
Section 3.02. Limitation on Authority of Owner Trustee................. 6
Section 3.03. Notice of Default........................................ 6
Section 3.04. Action Upon Instructions................................. 6
Section 3.05. Certain Duties and Responsibilities of Owner Trustee..... 7
Section 3.06. Certain Rights of Owner Trustee.......................... 8
Section 3.07. No Representations or Warranties as to Certain Matters... 10
Section 3.08. Status of Moneys Received................................ 10
Section 3.09. Self-Dealing............................................. 11
Section 3.10. Definition of a Responsible Officer...................... 11
Section 3.11. Resignation or Removal of Owner Trustee.................. 11
Section 3.12. Estate and Rights of Successor Owner Trustee............. 11
Section 3.13. Merger or Consolidation of SSB........................... 12
Section 3.14. Co-Trustees.............................................. 12
Section 3.15. Interpretation of Agreements............................. 13
Section 3.16. Not Acting in Individual Capacity........................ 14
Section 3.17. Tax Returns.............................................. 14
Section 3.18. Independent Business..................................... 14
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination.............................................. 16
Section 4.02. Distribution of Lessor's Estate upon Termination......... 17
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification.......................................... 17
Section 6.02. Supplements and Amendments............................... 19
Section 6.03. Nature of Title of Trustor............................... 19
Section 6.04. Power of Owner Trustee to Convey......................... 19
Section 6.05. Notices.................................................. 20
Section 6.06. Situs of Trust; Applicable Law; Severability............. 21
Section 6.07. Successors and Assigns................................... 21
Section 6.08. Headings and Table of Contents........................... 21
Section 6.09. Identification of Trust.................................. 21
Section 6.10. Counterparts............................................. 21
Section 6.11. Trustor Interest......................................... 21
Schedule I Definitions
TRUST AGREEMENT
(FEDERAL EXPRESS CORPORATION TRUST NO. N682FE)
TRUST AGREEMENT (FEDERAL EXPRESS CORPORATION TRUST NO. N682FE) dated
as of June 15, 1998 (this "Agreement") between STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, "SSB", and not in its individual capacity but
solely as trustee hereunder, the "Owner Trustee"), and FEDERAL EXPRESS
CORPORATION, a Delaware corporation (together with its successors and
permitted assigns, the "Trustor"). The capitalized terms used herein, unless
otherwise herein defined or the context hereof shall otherwise require, shall
have the respective meanings set forth in Schedule I attached hereto.
W I T N E S S E T H :
WHEREAS, the Trustor desires to create a trust for the purpose of
issuing Certificates, the proceeds of which issuance shall initially be held
by the Indenture Trustee on behalf of the Owner Trustee in the Collateral
Account and released, subject to the proviso to Section 3.02(a) of the
Participation Agreement, on the Delivery Date in order to finance a portion of
the Purchase Price of the Aircraft, to acquire the Aircraft from AVSA on the
Delivery Date, to lease the Aircraft to the Lessee on the Delivery Date and to
receive the benefits provided for herein.
WHEREAS, SSB is willing to accept the trust as herein provided and to
perform its obligations hereunder in its individual capacity or as the Owner
Trustee as the case may be.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, SSB and the Trustor agree as follows:
ARTICLE 1
THE LESSOR'S ESTATE
Section 1.01. Authorization and Direction to Owner Trustee. The
Trustor hereby authorizes and directs (or has authorized and directed) the
Owner Trustee, not individually but solely as the Owner Trustee hereunder:
(a) to execute and deliver, as and when specified in Sections 4.01
and 4.02 of the Participation Agreement, the Participation Agreement and
each of the other Operative Agreements to which the Owner Trustee is a
party and to enter into and perform the transactions contemplated thereby
including, without limitation, accepting title to, and delivery of, the
Aircraft from AVSA on the Delivery Date, and taking all appropriate action
to cause the Airframe to be registered with the Federal Aviation
Administration in the name of the Owner Trustee;
(b) to execute and deliver from time to time the Certificates in the
manner and subject to the terms and conditions provided in the
Participation Agreement and the Indenture;
(c) to execute and deliver each other document referred to in the
Operative Agreements to which the Owner Trustee is a party or which the
Owner Trustee is required to deliver pursuant to the Operative Agreements;
(d) subject to the terms of this Agreement, to perform the
obligations and duties and, upon instruction of the Trustor, exercise the
rights of the Owner Trustee under the Operative Agreements; and
(e) to execute and deliver all such other instruments, documents or
certificates and take all such other actions in accordance with the
directions of the Trustor, as the Trustor may deem necessary or advisable
in connection with the Certificate Closing Date and the Delivery Date and
the transactions contemplated hereby, the taking of any such action by the
Owner Trustee in the presence of the Trustor or its counsel to evidence,
conclusively, the direction of the Trustor.
Section 1.02. Declaration of Trust. SSB hereby declares and agrees,
in its individual capacity, that it will, and in its capacity as the Owner
Trustee does, hold the Lessor's Estate upon the trust herein set forth for the
use and benefit of the Trustor, subject, however, to the provisions of, and
the Lien created by, the Indenture. This Agreement is not intended by the
Trustor to create, and the trust created hereby is not intended by the Trustor
and the other parties interested herein to constitute a business trust for
purposes of the Bankruptcy Code.
Section 1.03. Conditions Precedent and Advances by Trustor. The
Trustor agrees to make advances to the Owner Trustee in such amounts and at
such times as may be necessary to permit the Owner Trustee to satisfy its
obligations under Section 3.02 of the Participation Agreement, subject to the
conditions set forth therein. The right and obligation of the Owner Trustee
to take the actions required by Section 1.01 hereof shall be subject to the
condition that the Trustor shall have made the full aggregate amount of the
advances required to be made by the Trustor pursuant to Section 3.02(a) of the
Participation Agreement.
Section 1.04. Prohibited Activity. The Owner Trustee shall not, and
the Trustor shall not cause the Owner Trustee to, engage in any activity other
than as contemplated or permitted under the Operative Agreements.
ARTICLE 2
DISTRIBUTIONS
Section 2.01. Predelivery Funding; Rent, Etc. (a) The Trustor and
the Owner Trustee acknowledge that the proceeds from the sale of the
Certificates to be effected on the Certificate Closing Date are to be held by
the Indenture Trustee in the Collateral Account in the manner specified in the
Indenture for application as provided therein and in Section 3.02 of the
Participation Agreement.
(b) The Trustor and the Owner Trustee acknowledge that the
Lease will be security for the Certificates pursuant to the Indenture which
provides that all moneys payable by the Lessee to the Owner Trustee under the
Lease (other than Excepted Payments) are to be first paid to the Indenture
Trustee while the Lien of the Indenture is in effect, for distribution in
accordance with the terms of Article V of the Indenture. Except as otherwise
provided in Section 2.04 hereof (and except for amounts received from the
Indenture Trustee, which shall be applicable only in accordance with clause
(iii) below), the Owner Trustee shall promptly apply each payment of Rent
(other than Excepted Payments), Stipulated Loss Value, Termination Value, and
any proceeds from the sale, requisition or disposition of the Aircraft
received by it as follows:
(i) prior to the release of the Lien of the Indenture, each such
payment shall be payable directly to the Indenture Trustee (and if any of
the same are received by the Owner Trustee shall, upon receipt, be paid
over to the Indenture Trustee without deduction, set off or adjustment of
any kind) for distribution in accordance with the provisions of Article V
of the Indenture; provided, that any payments received by the Owner Trustee
from (x) the Lessee with respect to SSB's or the Owner Trustee's fees and
disbursements under this Agreement, or (y) the Trustor pursuant to Section
6.01 hereof shall not be paid over to the Indenture Trustee but shall be
retained by the Owner Trustee and applied toward the purpose for which such
payments were made;
(ii) after the release of the Lien of the Indenture, any amount
remaining after application in full in accordance with paragraph (b)(i) of
this Section 2.01 and which represents payments for which provision as to
the application thereof is made in any other Operative Agreement shall be
applied promptly to the purpose for which such payment shall have been made
in accordance with the terms of such Operative Agreement; and
(iii) after application in accordance with paragraphs (i) and (ii) of
this Section 2.01(b), or to the extent received from the Indenture Trustee
under the terms of the Indenture, the balance, if any, remaining shall be
paid to the Trustor.
Section 2.02. Excepted Payments. All Excepted Payments at any time
received by the Owner Trustee shall be distributed promptly to the applicable
Person, and such payment shall not be deemed under any circumstances to be
part of the Lessor's Estate.
Section 2.03. Other Receipts. Except as otherwise provided in
Section 2.04 hereof, any payment received by the Owner Trustee, other than
those referred to in Sections 2.01 and 2.02 hereof, shall be payable prior to
the release of the Lien of the Indenture directly to the Indenture Trustee
(and if any of the same are received by the Owner Trustee shall, upon receipt,
be paid over to the Indenture Trustee without deduction, set off or adjustment
of any kind) for distribution in accordance with the provisions of Article V
of the Indenture; and following such application or release of Lien, any such
payment for which provision as to the application thereof is made in the other
Operative Agreements shall be applied promptly to the purpose for which such
payment shall have been made in accordance with the terms of the other
Operative Agreements, and any such payment received by the Owner Trustee for
which no provision as to the application thereof is made in the Operative
Agreements or in this Article 2 shall, unless the Trustor shall have otherwise
instructed the Owner Trustee in writing, be distributed promptly to the
Trustor.
Section 2.04. Distributions after Default. Subject to the
provisions of Section 2.02 hereof, (i) all payments received and amounts
realized by the Owner Trustee after an Indenture Event of Default shall have
occurred and shall be continuing and after the Certificates shall have become
or been declared due and payable pursuant to Section 7.02(b) or 7.02(c) of the
Indenture or the Lease shall have been declared in default (including, without
limitation, any amounts realized by the Owner Trustee or the Trustor from the
exercise of any remedies pursuant to Section 17.01 of the Lease), as well as
(ii) all funds then held or thereafter received by the Owner Trustee as part
of this Trust Agreement, the Lease or otherwise, shall be distributed to the
Indenture Trustee for distribution in accordance with the provisions of
Article V of the Indenture.
Section 2.05. Distributions after Release of Lien of Indenture.
Except as otherwise provided in Sections 2.01, 2.02, 2.03 and 2.04 hereof:
(a) all payments received and amounts realized by the Owner Trustee
under the Lease or otherwise with respect to the Aircraft or any part
thereof (including, without limitation, all payments received pursuant to
Section 17.01 of the Lease and amounts realized upon the sale or lease of
the Aircraft or any part thereof after the termination of the Lease with
respect thereto), to the extent received or realized at any time after the
Lien of the Indenture shall have been released pursuant to the terms of the
Indenture, and
(b) moneys not included in paragraph (a) of this Section 2.05
remaining as part of the Lessor's Estate after payment in full of amounts
described in paragraph (a), shall, to the extent required, be retained by
the Owner Trustee as reimbursement for all expenses hereunder or under the
Lease not theretofore reimbursed under this Agreement, the Lease or
otherwise and to which the Owner Trustee is entitled to be reimbursed
pursuant to the provisions thereof, and any balance remaining thereafter
shall be distributed to the Trustor.
Section 2.06. Manner of Making Distributions. The Owner Trustee
shall make distributions or cause distributions to be made to (i) the Trustor
pursuant to this Article 2 by transferring by wire transfer in immediately
available funds the amount to be distributed to such account or accounts of
the Trustor as it may designate from time to time by written notice to the
Owner Trustee (and the Owner Trustee shall use best efforts to cause such
funds to be transferred by wire transfer on the same day as received, but in
any case not later than the next succeeding Business Day), and (ii) the
Indenture Trustee pursuant to this Article 2 by paying the amount to be
distributed to the Indenture Trustee in the manner specified in the Indenture;
provided, that the Owner Trustee shall invest overnight, for the benefit of
the Trustor, in investments that would be permitted by Article 23 of the Lease
(but only to the extent funds are received on or prior to 1:00 P.M. (Eastern
Time) and such investments are available and, if such investments are not
available to the Owner Trustee in investments which, after consultation with
the Trustor, the Trustor shall direct) all funds not transferred by wire
transfer on the same day as they were received. Notwithstanding the foregoing
but subject always to the provisions of, and the Lien created by, the
Indenture, the Owner Trustee will, if so requested by the Trustor by written
notice, pay in immediately available funds any and all amounts payable by the
Owner Trustee hereunder to the Trustor as directed by the Trustor.
ARTICLE 3
THE OWNER TRUSTEE
Section 3.01. Acceptance of Trust and Duties. SSB accepts the trust
hereby created and, subject to Section 1.03 hereof, in its capacity as the
Owner Trustee agrees to perform the same, including without limitation,
subject to Section 1.03 hereof, the actions specified in Section 1.01 hereof
as herein provided. The Owner Trustee agrees to disburse all monies that it
receives under the Operative Agreements in accordance with the terms hereof.
The Owner Trustee shall not be answerable or accountable in its individual
capacity except as a result of or arising from (a) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (b)
any breach by the Owner Trustee of its representations, warranties and
covenants given in its individual capacity in this Agreement, Sections
7.01(c), 7.02(a) and (b) and 7.04 of the Participation Agreement or its
covenants given in its individual capacity in Section 3.05 of the Indenture or
elsewhere in the Operative Agreements, (c) the failure to use ordinary care in
receiving, handling and disbursing funds, (d) Lessor's Liens attributable to
it in its individual capacity, and (e) taxes, fees, or other charges on, based
on, or measured by, any fees, commissions or compensation received by SSB or
the Owner Trustee in connection with the transactions contemplated by the
Lease, the Indenture and the Operative Agreements including this Agreement.
Section 3.02. Limitation on Authority of Owner Trustee. The Owner
Trustee shall have no power, right, duty or authority to manage, control,
possess, use, sell, lease, dispose of or otherwise deal with the Aircraft,
Airframe, Engines, any Part thereof or any other property at any time
constituting a part of the Lessor's Estate, or otherwise to take or refrain
from taking any action under or in connection with the Operative Agreements,
except (i) to execute and deliver the Operative Agreements to which it is a
party, (ii) to exercise and carry out or cause to be exercised or carried out
the rights, duties and obligations of the Owner Trustee hereunder and under
the other Operative Agreements as authorized and directed by the Trustor, or
(iii) as expressly provided in written instructions from the Trustor given
pursuant to Section 3.03 or 3.04 hereof; provided, that nothing in this
Section 3.02 shall limit in any manner the obligations of the Owner Trustee
hereunder.
Section 3.03. Notice of Default. In the event that a Responsible
Officer in the Corporate Trust Administration of the Owner Trustee shall have
actual knowledge of a Default or an Event of Default, or an Indenture Default
or an Indenture Event of Default, the Owner Trustee shall give or cause to be
given to the Trustor and the Indenture Trustee prompt notice (in any event
within two Business Days of the discovery thereof), in accordance with Article
14 of the Participation Agreement, of such Default, Event of Default,
Indenture Default or Indenture Event of Default. Subject to the terms of
Section 3.06(e) hereof and the rights of the Indenture Trustee under the
Indenture, the Owner Trustee shall take such action with respect to such
Default, Event of Default, Indenture Default or Indenture Event of Default as
shall be specified in written instructions from the Trustor; provided that the
Owner Trustee shall have no duty to take any action whatsoever in the absence
of instructions from the Trustor. For all purposes of this Agreement and the
Lease, in the absence of actual knowledge of a Responsible Officer of the
Owner Trustee, the Owner Trustee shall not be deemed to have knowledge of a
Default, Event of Default, Indenture Default or Indenture Event of Default
unless notified in writing by the Lessee, the Trustor, the Indenture Trustee
or any Certificate Holder.
Section 3.04. Action Upon Instructions. Upon the written
instructions at any time and from time to time of the Trustor, the Owner
Trustee will take or refrain from taking such action, not inconsistent with
provisions of the Indenture, as may be specified in such instructions.
Section 3.05. Certain Duties and Responsibilities of Owner Trustee.
(a)(i) The Owner Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein, and with the degree of care
specified in Section 3.01 hereof, and in accordance with instructions given by
the Trustor hereunder, and no implied duties, covenants or obligations shall
be read into this Agreement, any such instructions or the Operative Agreements
against the Owner Trustee, and the Owner Trustee agrees that it will not
manage, control, possess, use, sell, lease, dispose of or otherwise deal with
the Aircraft or any part of the Lessor's Estate except as required by the
terms of the Operative Agreements, any such instructions and as otherwise
provided herein; and
(ii) in the absence of bad faith on its part, the Owner Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Owner Trustee and conforming to the requirements of this Agreement or
the other Operative Agreements, but in the case of any such certificates or
opinions which by any provisions hereof or thereof are specifically
required to be furnished to the Owner Trustee, the Owner Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Trust Agreement or the Operative Agreements.
(b) No provision hereof shall require the Owner Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Notwithstanding the foregoing, SSB agrees in
its individual capacity that it will, at its own cost and expense, promptly
take such action as may be necessary to discharge duly all Lessor's Liens
attributable to it in its individual capacity and will claim no indemnity
therefor hereunder, or under the Participation Agreement or any Operative
Agreement.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Owner Trustee shall be subject to the provisions
of this Section 3.05, except that in the event of a conflict between this
Section 3.05 and Section 3.01 hereof, Section 3.01 hereof shall be controlling.
(d) The Owner Trustee will furnish to the Trustor, promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee hereunder or under the other Operative
Agreements (including those furnished to the Indenture Trustee pursuant to the
terms of the Indenture) and not otherwise furnished to the Trustor.
(e) Notwithstanding anything herein to the contrary, the Owner
Trustee shall not be authorized and shall have no power to "vary the
investment" of the Trustor within the meaning of Treasury Regulations Section
301.7701-4(c)(1), it being understood that the Owner Trustee shall have the
power and authority to fulfill its obligations under Section 2.06 hereof and
Article 23 of the Lease.
Section 3.06. Certain Rights of Owner Trustee. Except as otherwise
provided in Section 3.05 hereof:
(a) in the absence of bad faith on its part, the Owner Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction or authorization by the Trustor or any
other party to any other Operative Agreement shall be sufficiently
evidenced by a request, direction or authorization in writing, delivered to
the Owner Trustee, and signed in the name of such party by any of the
Chairman of the Board, the President, any Vice President, the Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary or other duly
authorized officer of such party; and any resolution of the Board of
Directors or committee thereof of such party shall be sufficiently
evidenced by a copy of such resolution certified by the Secretary or an
Assistant Secretary of such party, to have been duly adopted and to be in
full force and effect on the date of such certification, and delivered to
the Owner Trustee;
(c) whenever in the administration of this Agreement the Owner
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder or under any of
the other Operative Agreements, the Owner Trustee (unless other evidence be
herein or therein specifically prescribed), absent actual knowledge of a
Responsible Officer of the Owner Trustee to the contrary, may rely in good
faith upon a certificate in writing, delivered to the Owner Trustee and
signed by any of the Chairman of the Board, the President, any Vice
President, the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary of the Lessee, the Trustor, or the Indenture Trustee
and notice of such need for such proof or establishment shall be delivered
to the Trustor, who may advise the Owner Trustee in respect of such matter
and the Owner Trustee shall act in conformity with such advice;
(d) the Owner Trustee may exercise its powers and perform its
duties by or through such attorneys, agents and servants as it shall
appoint with due care, and it shall be entitled to rely upon the advice of
counsel reasonably selected by it with due care and shall be protected by
the advice of such counsel in anything done or omitted to be done in
accordance with such advice;
(e) the Owner Trustee shall not be under any obligation to take any
action under this Agreement or under any of the other Operative Agreements
at the request or direction of the Trustor unless the Persons making such
request or direction shall have offered to the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; nor
shall the Owner Trustee be required to take any action deemed to impose on
the Owner Trustee any obligation to take any action, if the Owner Trustee
shall have been advised by its counsel that such action is unlawful or is
contrary to the terms of this Agreement or the other Operative Agreements;
(f) the Owner Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document unless a Responsible Officer of the Owner Trustee
has actual knowledge that the facts or matters stated therein are false or
inaccurate, but the Owner Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Owner Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, to the same extent permitted to the
Lessor under the Lease, to examine the books and records of the Lessee to
reasonably determine whether the Lessee is in compliance with the terms and
conditions of the Lease and to examine the Aircraft, Airframe, Engines or
any Part thereof personally or by agent or attorney; and
(g) without limiting the generality of Section 3.05 hereof, except
as otherwise provided in written instructions given to the Owner Trustee by
the Trustor or as otherwise provided in the Indenture or the Participation
Agreement, the Owner Trustee shall not have any duty (i) to see to any
recording or filing of the Lease or of this Agreement or any financing
statement or other notice or document relating thereto or contemplated
under the Operative Agreements or to see to the maintenance of any such
recording or filing (other than FAA reporting requirements contained in 14
C.F.R. Sections 47.45 and 47.51), (ii) to see to any insurance on the
Aircraft or any part thereof or to effect or maintain any such insurance,
whether or not the Lessee shall be in default with respect thereto, other
than to forward to the Trustor copies of all certificates, reports and
other written information which it receives from the Lessee pursuant to the
Lease, (iii) to see to the payment or discharge of any tax, assessment or
other governmental charges or any Lien (except any Lessor's Lien
attributable to it in its individual capacity) owing with respect to, or
assessed or levied against any part of the Lessor's Estate, (iv) to confirm
or verify any financial statements or reports of the Lessee, or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of the Lessee's covenants under the Lease.
Section 3.07. No Representations or Warranties as to Certain
Matters. NEITHER THE OWNER TRUSTEE NOR SSB MAKES OR SHALL BE DEEMED TO HAVE
MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, VALUE, CONDITION, WORKMANSHIP, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, CONSTRUCTION, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER
DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF
ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON
STRICT LIABILITY IN TORT, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, except
that SSB represents and warrants that on the Delivery Date the Owner Trustee
shall have received whatever rights, title and interests in, to and under the
Aircraft that were conveyed to it by AVSA and SSB represents, warrants and
covenants that at all times on and after the Delivery Date the Aircraft shall
be free of all Lessor's Liens attributable to it, and that the Owner Trustee
shall comply with the last sentence of Section 3.05(b) hereof, or (b) any
representation or warranty as to the validity, legality or enforceability of
this Agreement or any other Operative Agreement to which the Owner Trustee is
a party, or any other document or instrument, or as to the correctness of any
statement contained in any thereof, except to the extent that any such
representation, warranty or statement is expressly made herein or therein as a
representation or warranty by the Owner Trustee or SSB and except that SSB
hereby represents and warrants that this Agreement has been, and (assuming the
due authorization, execution and delivery of this Agreement by the Trustor)
the other Operative Agreements to which the Owner Trustee is a party have been
(or at the time of execution and delivery of any such instrument by the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of the Owner Trustee and that this Agreement has
been duly authorized, executed and delivered by SSB and (assuming due
authorization, execution and delivery of this Trust Agreement by the Trustor)
constitutes the legal, valid and binding obligation of SSB enforceable against
it in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and by general principles of
equity.
Section 3.08. Status of Moneys Received. All moneys received by the
Owner Trustee under or pursuant to any provision of this Agreement or any
Operative Agreement shall constitute trust funds for the purpose for which
they were paid or are held, but need not be segregated in any manner from any
other moneys except to the extent required by law and subsection (e) of
Section 3.18 hereof and may be deposited by the Owner Trustee under such
conditions as may be prescribed or permitted by law for trust funds, or may be
invested in direct obligations of the United States.
Section 3.09. Self-Dealing. The Owner Trustee in its individual
capacity, or any corporation in or with which the Owner Trustee may be
interested or affiliated, or any officer or director of any such corporation,
may have normal commercial relations, and otherwise deal, in the ordinary
course of business, with the Lessee or any other corporation having relations
with the Lessee to the full extent permitted by law.
Section 3.10. Definition of a Responsible Officer. For purposes of
this Trust Agreement only, "Responsible Officer" when used with respect to the
Owner Trustee means the Chairman or the Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive Committee of the
Board of Directors, the President, any Vice President (whether or not
designated by a number or a word or words added before or after the title
"Vice President"), the Secretary, any Assistant Secretary, or any other
officer in the Corporate Trust Administration of SSB customarily performing
functions similar to those performed by any of the above designated officers.
Section 3.11. Resignation or Removal of Owner Trustee. The Owner
Trustee or any successor thereof (a) shall resign if required to do so
pursuant to Section 7.02(b) of the Participation Agreement and (b) may resign
at any time without cause by giving at least 60 days' prior written notice to
the Trustor and the Indenture Trustee, such resignation in each case to be
effective only upon the appointment of a successor trustee and the acceptance
of such appointment by such successor. In addition, the Trustor may at any
time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee and the Indenture Trustee, such removal to be
effective only upon the appointment by the Trustor of a successor Owner
Trustee and the acceptance of such appointment by such successor. Upon the
giving of notice of resignation or removal of the Owner Trustee, the Trustor
may appoint a successor Owner Trustee by an instrument signed by the Trustor.
If the Trustor shall not have so appointed a successor Owner Trustee within 30
days after such resignation or removal, the Owner Trustee, the Indenture
Trustee or the Trustor may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor or successors shall have been appointed by the Trustor as above
provided. Any successor Owner Trustee so appointed by a court shall be
superseded by any successor Owner Trustee subsequently appointed by the
Trustor.
The appointment of any successor Owner Trustee shall be subject to the
conditions set forth in Section 11.01 of the Participation Agreement.
Section 3.12. Estate and Rights of Successor Owner Trustee. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee, with a copy to the Trustor and the Indenture
Trustee, an instrument accepting such appointment, and thereupon each
successor Owner Trustee, without further act, shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trust hereunder with like effect as if originally named as an
Owner Trustee herein, but nevertheless upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trust herein expressed, all estates, properties, rights, powers, duties,
property or moneys then held by such predecessor Owner Trustee upon the trust
herein expressed. Upon any such transfer by a predecessor Owner Trustee, such
predecessor Owner Trustee shall provide the successor Owner Trustee and
Trustor an accounting of the Lessor's Estate and the trust hereunder.
Upon the appointment of any successor Owner Trustee hereunder, the
predecessor Owner Trustee will use its best efforts to cause registration of
the Aircraft included in the Lessor's Estate to be transferred upon the
records of the Aeronautics Authority or other registry where the Aircraft may
then be registered into the name of the successor Owner Trustee and shall
otherwise use its best efforts to comply, or assist the successor Owner
Trustee in complying, with the provisions of Section 11.01 of the
Participation Agreement.
Section 3.13. Merger or Consolidation of SSB. Any corporation into
which SSB in its individual capacity may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which SSB shall be a party, or any corporation to which substantially all the
business of the Owner Trustee in its individual capacity may be transferred,
shall, subject to Section 11.01 of the Participation Agreement, be the Owner
Trustee under this Agreement without further act; provided, that such
corporation shall not also be the Indenture Trustee.
Section 3.14. Co-Trustees. At any time, if the Owner Trustee or the
Trustor shall deem it necessary or prudent or desirable in order to conform to
legal requirements of any jurisdiction in which any part of the Lessor's
Estate may at the time be located, the Trustor and the Owner Trustee jointly
shall have the power, and shall execute and deliver all instruments, to
appoint one or more Persons approved by the Trustor and the Owner Trustee to
act as co-trustee, or co-trustees, jointly with the Owner Trustee, or separate
trustee or separate trustees (except insofar as local law makes it necessary
or prudent or desirable for any such co-trustee or separate trustee to act
alone), of all or any part of the Lessor's Estate, and to vest in such Person
or Persons, in such capacity, such title to the Lessor's Estate or any part
thereof, and such rights, powers, duties, trusts or obligations as the Trustor
and the Owner Trustee may consider necessary or prudent or desirable. The
Owner Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.14. No appointment of, or
action by, any co-trustee or separate trustee appointed under this Section
3.14 will relieve the Owner Trustee of any of its obligations under any
Operative Agreement or otherwise affect any of the terms of the Indenture or
adversely affect the interests of the Indenture Trustee or the Certificate
Holders in the Trust Indenture Estate.
Any co-trustee or separate trustee may, at any time by an instrument
in writing, constitute the Owner Trustee its or his attorney-in-fact and agent
with full power and authority to do all acts and things and to exercise all
discretion on its or his behalf and in its or his name subject to the
conditions of this Agreement.
Every additional trustee hereunder shall be a Citizen of the United
States and, to the extent permitted by law, be appointed and act, and the
Owner Trustee and its successors shall act, subject to the following
provisions and conditions:
(A) all powers, duties, obligations and rights conferred upon the
Owner Trustee in respect of the custody, control and management of monies,
the Aircraft or documents authorized to be delivered hereunder or under the
Participation Agreement shall be exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred or imposed upon and
exercised or performed by the Owner Trustee and such additional trustee
jointly, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (including the holding
of title to the Lessor's Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by such
additional trustee;
(C) no power given to, or which is provided hereby may be exercised
by, any such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder except as otherwise
provided hereunder; and
(E) the Trustor, at any time, by an instrument in writing may
remove any such additional trustee.
Section 3.15. Interpretation of Agreements. In the event that the
Owner Trustee is unsure as to the application of any provision of this
Agreement or any other Operative Agreement or any other agreement relating to
the transactions contemplated by the Operative Agreements or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement or any other
Operative Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action which the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
shall request in writing sent in accordance with Article 14 of the
Participation Agreement instructions of the Trustor and, to the extent that
the Owner Trustee acts in good faith in accordance with any instructions
received from the Trustor, shall not be liable to any Person; provided, that
in the event that no response is made to the Owner Trustee by the Trustor
within 25 Business Days after such request, the Owner Trustee shall not be
liable to any Person for acts taken by the Owner Trustee in good faith or for
any failure to act, except to the extent provided in the last sentence of
Section 3.01 hereof.
Section 3.16. Not Acting in Individual Capacity. In carrying out
the trust hereby created, the Owner Trustee will act solely as trustee
hereunder and not in its individual capacity except as expressly provided
herein or in the other Operative Agreements to which it is a party; and all
Persons, other than the Trustor as provided in this Agreement, having any
claim against the Owner Trustee by reason of the transactions contemplated
hereby shall look only to the Lessor's Estate for payment or satisfaction
thereof, except to the extent provided in the last sentence of Section 3.01
hereof.
Section 3.17. Tax Returns. The Owner Trustee shall be responsible
for the keeping of all appropriate books and records relating to the receipt
and disbursement of all moneys under this Agreement or any Operative
Agreement. The Trustor shall be responsible for causing to be prepared and
filed all income tax returns required to be filed by the Trustor. The Owner
Trustee, upon the request of the Trustor, will furnish the Trustor with all
such information as may be reasonably required or necessary from the Owner
Trustee in connection with the preparation of such tax returns and in
connection with any other filing or audit and related litigation obligations.
The Owner Trustee shall be responsible for causing to be prepared at the
request of the Trustor and at the expense of the Lessee all income tax returns
required to be filed with respect to the trust created hereby and shall
execute and file such returns; provided, however, that the Owner Trustee shall
send a completed copy of each such return to the Trustor not more than 60 nor
less than 30 days prior to the due date of such return; provided that the
Owner Trustee shall have timely received all necessary information to complete
and deliver to the Trustor such return. The Trustor, upon request, will
furnish the Owner Trustee with all such information as may be required from
the Trustor in connection with the preparation of such income tax returns.
Section 3.18. Independent Business. The Owner Trustee will conduct
its activities such that the Owner Trust is a separate and readily
identifiable trust separate from, and independent of, the Trustor and any of
its Affiliates (it being understood that the Trustor and its Affiliates may
publish financial statements that consolidate those of the Owner Trustee, if
to do so is required by any applicable law or accounting principles from time
to time in effect) and:
(a) it will observe all formalities required under this Agreement
necessary to cause the Owner Trust to remain a common law trust separate
and distinct from the Trustor and any of its Affiliates;
(b) it will maintain each of the assets and liabilities of the Owner
Trust separate and distinct from those of the Trustor and any of its
Affiliates;
(c) it will maintain records, books, accounts, and minutes of the
Owner Trust separate from those of the Trustor and any of its Affiliates;
(d) it will pay the obligations of the Owner Trust in the ordinary
course of business as a common law trust separate from the Trustor and any
of its Affiliates;
(e) it will keep funds held in the Trust Estate separate and
distinct from any funds of the Trustor and any of its Affiliates, and will
receive, deposit, withdraw and disburse such funds separately from any
funds of the Trustor and any of its Affiliates;
(f) it will conduct the activities of the Owner Trust in its own
name as trustee of the Owner Trust, and not in the name of the Trustor or
any of its Affiliates;
(g) it will not agree to pay or become liable for any debt of the
Trustor or any of its Affiliates other than as contemplated by the
Indenture;
(h) it will not induce any third party to rely on the
creditworthiness of the Trustor or any of its Affiliates in order that such
third party will be induced to contract with the Owner Trust (except
insofar as such third party may rely on the fact, if applicable, that the
Trustor or its Affiliate is the Lessee); and
(i) it will not enter into any transaction between the Owner Trust
and the Trustor or any of its Affiliates that is more favorable to the
Trustor and its Affiliates than transactions that the Owner Trustee would
have been able to enter into at such time on an arm's-length basis with a
non-affiliated third party, other than any agreements in effect on the date
hereof or any transaction permitted pursuant to the Operative Agreements.
ARTICLE 4
TERMINATION OF TRUST
Section 4.01. Termination. This Agreement and the trust created and
provided for hereby shall cease and be terminated in any one of the following
events, whichever shall first occur:
(a) If the Trustor shall by notice in writing to the Owner Trustee
revoke and terminate the trust on and as of a date stated in such notice,
which date shall not be less than ten nor more than thirty days from the
date of mailing such notice, in which case, on the date specified in such
notice the trust created and provided for hereby shall cease and terminate;
provided, that this Trust shall not be subject to revocation or termination
by the Trustor prior to the later of (x) payment in full and discharge of
the Certificates and all other indebtedness secured by the Indenture and
the release of the Lien of the Indenture and the security interest granted
thereby without the consent of the Indenture Trustee and (y) the
termination of the Lease; provided, further, that such notice shall be
accompanied by the written agreement of the Trustor to assume all of the
obligations of the Owner Trustee under the Operative Agreements and all
other obligations of the Owner Trustee incurred by it hereunder in its role
as the Owner Trustee arising from the revocation or termination of the
trust or this Agreement by the Trustor;
(b) The sale or other final disposition by the Owner Trustee of all
of its interest in all property constituting or included in the Lessor's
Estate and, if the Indenture shall then be in effect, the sale or other
disposition by the Indenture Trustee of all of its interest in all property
constituting or included in the Lessor's Estate, and the final disposition
by the Owner Trustee and, if the Indenture shall then be in effect, the
Indenture Trustee, of all moneys or other property or proceeds constituting
part of the Lessor's Estate in accordance with the terms hereof; or
(c) 21 years less one day from the death of the last survivor of the
descendants of Queen Victoria of England living on the date of this
Agreement; provided, however, that if the Trust shall be or become valid
under applicable law for a period subsequent to 21 years less one day from
the death of the last survivor of the descendants of Queen Victoria of
England living on the date of this Agreement or, without limiting the
generality of the foregoing, if legislation shall become effective
providing for the validity or permitting the effective grant of such trust
for a period, in gross, exceeding the period for which such trust is
hereinabove stated to extend and be valid, then such trust shall not
terminate as provided in the first part of this sentence but shall extend
to and continue in effect until, but only if such non-termination and
extension shall then be valid under applicable law, such time as the same
shall, under applicable law, cease to be valid.
In the event of a termination pursuant to this Section 4.01, if the
Indenture is still in effect, the Trustor will 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 4.02. Distribution of Lessor's Estate upon Termination.
Upon any termination of this Trust pursuant to the provisions of Section 4.01
hereof, the Owner Trustee shall convey the Lessor's Estate (subject to all
obligations, if any, of the Owner Trustee then existing under the Operative
Agreements to which the Owner Trustee is a party) to such purchaser or
purchasers or the Trustor, as the case may be, and for such amount and on such
terms as shall be specified in written instructions from the Trustor delivered
to the Owner Trustee prior to the date of termination; provided, that in the
event such written instructions are not delivered to the Owner Trustee on or
before the date of termination, the Owner Trustee shall transfer title to the
Lessor's Estate to the Trustor. Upon making such transfer or sale and
accounting for all funds which have come into its hands, the Owner Trustee
shall be entitled to receipt of any sums due and owing to the Owner Trustee
for expenses incurred pursuant hereto as set forth in Section 2.05 hereof.
ARTICLE 5
TRANSFER OF BENEFICIAL INTEREST
The Initial Owner Participant may, on the Delivery Date (or, if
earlier, the Transfer Date), assign, convey or otherwise transfer its
Beneficial Interest to one or more institutional investors to enable the Owner
Trustee to purchase the Aircraft pursuant to Section 3.02 of the Participation
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Indemnification. The Trustor and its assigns agrees to
reimburse and save SSB, in its individual capacity, harmless against any and
all loss, damage, liability, claims, demands, disbursements and expenses,
including Taxes (excluding Taxes imposed against SSB upon or with respect to
any fees for services rendered in its capacity as Trustee hereunder) and
reasonable counsel fees, which are not required to be indemnified by the
Lessee pursuant to Section 9.01 of the Participation Agreement and which may
be incurred by reason of its being the Owner Trustee or acting hereunder or
under the Operative Agreements, but solely by reason thereof and arising out
of or relating solely to this Agreement or the other Operative Agreements or
the Aircraft or the Rents and other sums payable therefor, or by reason of any
occurrence directly relating thereto while so acting, and to secure the payment
thereof, SSB, in its individual capacity, shall have a Lien on the Lessor's
Estate and the proceeds thereof, including income, prior to any interest
therein of the Trustor and their respective assigns (but subject to the rights
of the Lessee under the Operative Agreements and subject and subordinate to
the Lien of the Indenture), except that SSB shall not have any such Lien (and
the Trustor shall have no obligation) in respect of any such loss, damage,
liability, claims, demands, disbursements and expenses, including Taxes and
counsel fees, arising from or as a result of (A) the Owner Trustee's willful
misconduct or gross negligence (in its individual capacity or as trustee), (B)
any inaccuracy of any representation of SSB or any breach by SSB of its
warranties and covenants given in its individual capacity in this Agreement,
Article 5 of the Lease, Sections 7.01(c), 7.02(a) and (b) and 7.04 of the
Participation Agreement and its representations and warranties in the
Operative Agreements, (C) the failure to use ordinary care in receiving,
handling and disbursing funds, (D) Lessor's Liens attributable to it in its
individual capacity, (E) Taxes, fees, or other charges on, based on, or
measured by, any fees, commissions or compensation received by SSB in
connection with the transactions contemplated by the Lease, the Indenture and
this Agreement, (F) Taxes excluded from the Lessee's obligation to indemnify
SSB pursuant to Section 8.01(b) of the Participation Agreement (disregarding
for the purposes of this Section 6.01, subsections (iii) or (vi) of Section
8.01(b) of the Participation Agreement) or (G) Expenses excluded from the
Lessee's obligation to indemnify SSB pursuant to Section 9.01(b) of the
Participation Agreement (disregarding for the purposes of this Section 6.01,
subsections (ii), (iv), (vii) and (viii) of Section 9.01(b) of the
Participation Agreement to the extent such subsections relate to actions of
the Trustor); provided, that, before asserting any right to payment or
indemnification hereunder, SSB shall first demand (but need not exhaust its
remedies with respect to) its corresponding right to payment or
indemnification from the Lessee pursuant to the Participation Agreement. It
is further understood that the distribution by the Owner Trustee of all or any
part of the Lessor's Estate as provided in Section 4.02 of this Agreement
shall not impair the right of SSB to indemnity, payment and reimbursement as
herein provided. In the event SSB makes any advances at any time to pay or to
provide for the payment of any such loss, damage, liability, claim, demand or
expense, then SSB, in its individual capacity, shall be entitled, in addition
to reimbursement for the principal of the sum so advanced, to interest on the
amount of such advances at the Prime Rate. The provisions of this Section
shall continue in force and effect notwithstanding the termination of this
Trust or the resignation, inability or incapacity to act or removal of the
Owner Trustee. SSB or the Owner Trustee (in its individual capacity or as
trustee, as the case may be) agrees that it shall have no right against
(except as provided in this Section 6.01) the Trustor or (subject to the
provisions of the Indenture) the Trust Indenture Estate for any fee as
compensation for its services hereunder.
Section 6.02. Supplements and Amendments. At any time and from time
to time, only upon the written request of the Trustor (a) SSB and the Trustor
shall execute a supplement hereto for the purpose of adding provisions to, or
changing or eliminating provisions of, this Agreement as specified in such
request and (b) the Owner Trustee shall, subject to the provisions of Section
8.01 of the Indenture, enter into or consent to such written amendment or
modification of or supplement to any of the Operative Agreements as the
Indenture Trustee and any other necessary parties may agree to in writing and
as may be specified in such request, or execute and deliver such written
waiver of the terms of any of the Operative Agreements as may be agreed to in
writing by the Indenture Trustee and as may be specified in such request;
provided, that (i) the Owner Trustee shall not execute any such supplement,
amendment, waiver or modification without the prior written consent of the
Trustor, (ii) if in the reasonable opinion of the Owner Trustee any document
required to be executed by it pursuant to this Section adversely affects any
right or duty of, or immunity or indemnity in favor of, the Owner Trustee
under this Agreement or any other Operative Agreement, the Owner Trustee may
in its discretion decline to execute such document, (iii) any amendment or
supplement to this Agreement that would adversely affect the rights of the
Indenture Trustee or the Holders shall be subject to the prior written consent
of the Indenture Trustee and (iv) any amendment or supplement to this
Agreement that would adversely affect the rights of the Lessee shall be
subject to the prior written consent of the Lessee. It shall not be necessary
that any request pursuant to this Section specify the particular form of the
proposed document to be executed pursuant to such request, but it shall be
sufficient if such request shall indicate the substance thereof. Promptly
after the execution by SSB or the Owner Trustee of any document pursuant to
this Section, the Owner Trustee shall mail a conformed copy thereof to the
Trustor, the Indenture Trustee and the Lessee, but the failure of the Owner
Trustee to mail such conformed copies shall not impair or affect the validity
of such document.
Section 6.03. Nature of Title of Trustor. No Trustor shall have any
legal title to any part of the Lessor's Estate. No transfer, by operation of
law or otherwise, of the right, title and interest of the Trustor in and to
the Lessor's Estate or the trust hereunder shall operate to terminate this
Agreement or Lessor's Estate.
Section 6.04. Power of Owner Trustee to Convey. Any assignment,
sale, transfer or other conveyance by the Owner Trustee of the interest of the
Owner Trustee in the Operative Agreements or in the Aircraft or any part
thereof pursuant to and in compliance with the terms of this Agreement or the
Operative Agreements shall bind the Trustor and shall be effective to transfer
or convey all right, title and interest of the Owner Trustee and the Trustor
in and to the Operative Agreements or the Aircraft or such part thereof. No
purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Owner Trustee.
Section 6.05. 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:
If to the Owner Trustee: State Street Bank and Trust Company of Connecticut,
National Association
225 Asylum Street
Goodwin Square
Hartford, Connecticut 06103
Attention: Corporate/Muni Administration
Facsimile: (860) 244-1889
with a copy to State Street Bank and Trust Company
Two International Place
4th Floor
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Telephone: (617) 664-5526
Facsimile: (617) 664-5371
If to the Trustor: Federal Express Corporation
2007 Corporate Avenue
Memphis, Tennessee 38132
Attention: Vice President and Treasurer
with a copy to Senior Vice President and General
Counsel at:
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
Telephone: (901) 395-3388
Facsimile: (901) 395-4758
If to the Indenture
Trustee: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telephone: (801) 246-5630
Facsimile: (801) 246-5053
or as to any of the foregoing parties at such other address as such party may
designate by notice duly given in accordance with this Section to the other
parties.
Section 6.06. Situs of Trust; Applicable Law; Severability. THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT, INCLUDING ALL MATTERS OF
VALIDITY, CONSTRUCTION AND PERFORMANCE. If any provision of this Agreement
shall be invalid or unenforceable, the remaining provisions hereof shall
continue to be fully effective; provided, that such remaining provisions do
not increase the obligations or liabilities of the Owner Trustee or the
Trustor.
Section 6.07. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of, and shall be enforceable by,
the parties hereto and their respective successors and permitted assigns,
including any successive holder of the Beneficial Interest, but only to the
extent the Beneficial Interest has been transferred or assigned in accordance
with the limitations of Article 5 of this Agreement.
Section 6.08. Headings and Table of Contents. The headings of the
Articles and Sections of this Agreement and the Table of Contents are inserted
for convenience only and shall not affect the meaning or construction of any
of the provisions hereof.
Section 6.09. Identification of Trust. This Trust may for
convenience be referred to as the "Federal Express Corporation Trust No.
N682FE."
Section 6.10. Counterparts. This instrument may be executed in any
number of counterparts or upon separate signature pages bound together in
several counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts together shall constitute and be one and the
same instrument.
Section 6.11. Trustor Interest. The Trustor has only a beneficial
interest in any specific property of this Trust. No creditor of the Trustor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of this Trust (as opposed to
the Trustor's beneficial interest in this Trust).
IN WITNESS WHEREOF, SSB and the Trustor have caused this Agreement to
be duly executed all as of the date first above written.
FEDERAL EXPRESS CORPORATION
By: _________________________________________________
Name: Robert D. Henning
Title: Vice President and Treasurer
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION
By: _________________________________________________
Name: Paul D. Allen
Title: Vice President
SCHEDULE I
DEFINITIONS
(FEDERAL EXPRESS CORPORATION TRUST NO. N682FE)
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 Section 13.01(c)(i) of the Lease.
Adjustment Date. The date of any increase or decrease in the
principal amount of the Series C Certificates pursuant to Section 2.19 of the
Indenture.
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 and SSB shall not be deemed to be an
Affiliate of any of the Owner Trustee, the Lessor or the Owner Participant.
After-Tax Basis. A basis such that any payment received or deemed to
have been received by a Person (the "Original Payment") shall be supplemented
by a further payment to such Person so that the sum of the two payments shall
be equal to the Original Payment, after taking into account (x) all Taxes that
would result from the receipt or accrual of such payments and (y) any
reduction in Taxes that would result from such increased Taxes. 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 Bill 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. Subject to Section 2.04 of the Participation Agreement, prior to
delivery of the initial Lease Supplement, references in the Operative
Agreements (including Section 3.03 of the Participation Agreement) to Aircraft
shall mean the Airbus A300F4-605R airframe bearing FAA Registration Number
N682FE and Manufacturer's serial number 800, 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 and any Pre-Delivery Replacement
Airframe which may be substituted pursuant to Section 2.04 of the
Participation Agreement.
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. N682FE), dated the Delivery 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 a copy of the fair market value
letter to the Lessee) on the Delivery Date pursuant to Section 4.02(h) 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
June 15, 1998, executed by AVSA.
AVSA's FAA Bill of Sale. The bill 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 Bill of Sale. The full warranty bill 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 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 1, 2023, or such
earlier date on which the Lease shall be terminated as provided therein.
Beneficial Interest. The interest of the Owner Participant (or the
Initial Owner Participant, as the case may be) 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. N682FE), issued by the Owner Trustee pursuant to the
Indenture and any certificate issued in exchange therefor or replacement
thereof pursuant to the Indenture.
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. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in the
Intercreditor Agreement).
Class B Liquidity Provider. Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal Republic of Germany
together with any Replacement Liquidity Provider (as defined in 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 Agreement. The Collateral Account Control Agreement
(Federal Express Corporation Trust No. N682FE) dated as of June 15, 1998,
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 June 15,
1998 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 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103, 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 79 South Main Street, Salt Lake City, Utah
84111, 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 7.02(a)(iv) of the
Lease.
Cut-Off Date. August 30, 1999.
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 3.03(c) of the Participation Agreement.
EBO Price. Has the meaning set forth in Section 4.02(a)(F) of the
Lease.
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 June 15, 1998,
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. N682FE), dated as of June 15, 1998, between the
Lessor and the Lessee.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Plan. An employee benefit plan subject to Title I of ERISA, or
an individual retirement account or plan subject to Section 4975 of the Code.
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 30 days due to theft or disappearance or such
longer period not to exceed 60 days from the end of such initial 30-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 loss constitutes an Event of Loss under clause (ii)
of this definition) 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, provided that no Event
of Loss shall be deemed to have occurred, and the Term shall be extended
automatically for a period of six months (or the date of return of the
Aircraft, if shorter, so long as the Lessor receives at least six months
notice of such date of return) beyond the end of the Term in the event that
the Aircraft, the Airframe or any Engine is requisitioned by the Government
pursuant to an activation as part of the CRAF Program described in Section
7.02(a)(iv) of the Lease; 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 six (6) consecutive
months, unless the Lessee, prior to the expiration of such six (6) 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 twelve (12) consecutive months, unless the Lessee, prior to the
expiration of such twelve (12) month period shall have conformed at least one
Airbus A300-600 series aircraft (but not necessarily the Aircraft or the
Airframe) to the requirements of any such law, rule, regulation, order, or
other action and shall have commenced regular commercial use and shall be
diligently carrying forward, on a non-discriminatory basis, all steps
necessary or desirable to permit the normal use of the Aircraft by the Lessee.
The date of such Event of Loss shall be (s) the 31st day or the 91st 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, 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 6 month or 12 month
period, referred to in clause (iv) above. 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 or other payments (and
interest thereon to the extent provided in the Operative Agreements) 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 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
the provisions of 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 amounts payable by the Lessee to the
Owner Participant or the Owner Trustee in its individual capacity, after the
release thereof from the Lien of the Indenture, (vi) the payment of
incremental out-of-pocket expenses of the Owner Trustee, the Owner Participant
or their respective authorized representatives payable by the Lessee under
Section 6.03(b) of the Participation Agreement or Section 14.01 of the Lease
following any reregistration of the Aircraft and (vii) proceeds of, and any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (vii) above.
Expense; Expenses. Have the meaning specified in Section 9.01(a) of
the Participation Agreement.
FAA. The United States Federal Aviation Administration and any
successor agency or agencies thereto.
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. 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 that the Aircraft (or other property) is
unencumbered by the Lease. Unless otherwise provided in the applicable
provisions of any Operative Agreement, 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; provided
that in connection with any determination pursuant to or for the purposes of
Article 17 of the Lease, the Aircraft shall be appraised on an "as is, where
is" basis. Fair Market Value shall be determined in accordance with the
provisions of Section 4.03 of the Lease.
Federal Aviation Administration. The United States Federal Aviation
Administration and any successor agency or agencies thereto.
FedEx. Federal Express Corporation.
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 amount set forth in Ancillary Agreement I.
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.
French Pledge Agreement. The French Pledge Agreement (Federal Express
Corporation Trust No. N682FE) dated as of June 15, 1998, 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 Owner Participant, the Indenture Trustee, in its
individual capacity and as trustee, the Subordination Agent, in its individual
capacity and in its capacity as Subordination Agent, each Liquidity Provider,
the Owner Participant Guarantor, if any, 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. N682FE), dated as of June 15, 1998, 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.
N682FE) 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 against which the Lessee has
not indemnified (and is not obligated to indemnify) the Indenture Trustee in
such capacity.
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.
Initial Owner Participant. Federal Express Corporation, a Delaware
corporation.
Intercreditor Agreement. The Intercreditor Agreement dated as of
June 15, 1998, 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.
LC Bank. Kreditanstalt fur Wiederaufbau, a corporation organized
under the public law of the Federal Republic of Germany.
Last Cut-Off Date. The later of (i) the Cut-Off Date and (ii) the
"Cut-Off Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Last Delivery Date. The later of (i) the Delivery Date and (ii) the
"Delivery Date" (as defined in the relevant Related Indenture) for the last
Related Aircraft to be delivered.
Lease. The Lease Agreement (Federal Express Corporation Trust No.
N682FE) dated as of June 15, 1998, 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. N682FE) 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.
Lessee Shortfall. Has the meaning set forth in Section 3.02(a) 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 Bill
of Sale, AVSA's Warranty Bill 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, the Owner Participant or the Indenture Trustee) 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, the 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 or 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 7, 8, 9, 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.
Letter of Credit. The Irrevocable Standby Letter of Credit, dated the
Certificate Closing Date, in the form of Exhibit G to the Participation
Agreement and with a Maximum Stated Amount equal to the amount specified under
"Letter of Credit Maximum Stated Amount" on Schedule IV to the Participation
Agreement, from the LC Bank to and for the benefit of the Subordination Agent.
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 1.1 of the
Intercreditor Agreement.
Liquidity Provider. Kreditanstalt fur Wiederaufbau, a corporation
organized under the public law of the Federal Republic of Germany together
with any Replacement Liquidity Provider (as defined in 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. With respect to any Certificate, the amount (as
determined by an Independent Investment Banker reasonably acceptable to the
Indenture Trustee and the Owner Participant) by which (i) the present value of
the remaining scheduled payments of principal and interest to the Maturity of
such Certificate computed by discounting such payments on a semiannual basis
on each Payment Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield exceeds (ii) the outstanding
principal amount of such Certificate plus accrued interest.
Mandatory Document Terms. The terms set forth on Schedule V to the
Participation Agreement.
Mandatory Economic Terms. The terms set forth on Schedule VI to the
Participation Agreement.
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.
Maximum Stated Amount. The amount specified under "Letter of Credit
Maximum Stated Amount" on Schedule IV to the Participation Agreement.
Moody's. 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 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 Bill of Sale, AVSA's Warranty Bill 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, if any, 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 Agreement, the Letter of Credit and the Reimbursement 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) Davis Polk & Wardwell 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.
Other Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as 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.
Outstanding C Account. The collateral account established and
maintained under a Related Indenture relating to an undelivered aircraft.
Owner Participant. The Person to whom on the Delivery Date (or, if
earlier, the Transfer Date) the Initial Owner Participant shall transfer its
Beneficial Interest pursuant to Section 3.02 of the Participation Agreement
and any successors 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. The provider, if any, of an Owner
Participant Guaranty.
Owner Participant Guaranty. Any guaranty delivered by the Owner
Participant Guarantor.
Owner Trust. Federal Express Corporation Trust No. N682FE.
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, if any, 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 and the EBO Price, 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. N682FE), dated as of June 15, 1998, 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,
1998-1-A, the Pass Through Certificates, 1998-1-B or the Pass Through
Certificates, 1998-1-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 1998-1 Pass
Through Trust Class A, Federal Express Corporation 1998-1 Pass Through Trust
Class B and Federal Express Corporation 1998-1 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 January 15,
1999.
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).
Pre-Delivery Replacement Airframe. Has the meaning set forth in
Section 2.04 of the Participation Agreement.
Preliminary Notice. Has the meaning specified in Section 4.01(a) of
the Lease.
Premium Termination Date. With respect to the Series A Certificates,
the scheduled maturity date of the Series A Certificates, with respect to the
Series B Certificates, the scheduled maturity date of the Series B
Certificates and with respect to the Series C Certificates, the scheduled
maturity date of the Series C Certificates.
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. Has the meaning specified in Section
10.01(a) of the Lease.
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. N682FE), dated as of June 15, 1998
between the Lessor and the Lessee.
Purchase Price. Has the meaning specified in Ancillary Agreement I.
Rating Agencies. Collectively, at any time, each nationally
recognized rating agency which shall have been requested to rate the Pass
Through Certificates and which shall then be rating the Pass Through
Certificates. The initial Rating Agencies will be Moody's and S&P.
Rating Agency Confirmation. With respect to any Operative Agreement
that is to be modified in any material respect on the Delivery Date or the
Transfer Date, if applicable, a written confirmation from each of the Rating
Agencies that the use of such Operative Agreement with such modifications
would not result in (i) a reduction of the rating for any Class of Pass
Through Certificates below the then current rating for such Class of Pass
Through Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Pass Through Certificates.
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.
Reimbursement Agreement. The Standby Letter of Credit Application and
Agreement, dated the Pass Through Closing Date, between the Lessee and the LC
Bank.
Related Aircraft. Each of the aircraft relating to a Related
Indenture.
Related Indentures. Collectively, the Trust Indenture and Security
Agreement for each of Federal Express Corporation Trust Nos. N585FE, N676FE,
N677FE, N678FE, N679FE, N680FE, N681FE, N620FE, N621FE and N623FE, each dated
as of June 15, 1998, between State Street Bank and Trust Company of
Connecticut, National Association, as owner trustee and First Security Bank,
National Association, as indenture trustee, the Trust Indenture and Security
Agreement for Federal Express Corporation Trust No. N590FE, dated as of May 1,
1998, as amended and restated as of June 15, 1998, between State Street Bank
and Trust Company of Connecticut, National Association, as owner trustee and
First Security Bank, National Association, as indenture trustee, and the Trust
Indenture and Security Agreement for Federal Express Corporation Trust No.
N675FE, dated as of June 1, 1998, as amended and restated as of June 15, 1998,
between State Street Bank and Trust Company of Connecticut, National
Association, as owner trustee and First Security Bank, National Association,
as indenture trustee.
Related Participation Agreements. Collectively, with respect to each
Related Indenture, the "Participation Agreement" as defined therein.
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. Each January 15 and July 15 commencing on January
15, 1999.
Reoptimization Date. Has the meaning specified in Section 2.03(b) 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 the same or of equal or greater
value, 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 C Prepayment Date. July 15, 1999 or any other date designated
by the Lessee, but in no event later than the fifteenth day after the Last
Cut-Off Date.
Series Supplement or Series Supplements. The Series Supplement
1998-1-A to be executed and delivered by the Lessee and the Pass Through
Trustee, the Series Supplement 1998-1-B to be executed and delivered by the
Lessee and the Pass Through Trustee or the Series Supplement 1998-1-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. Daugherty, Fowler & Peregrin.
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 or any successor Owner Trustee in
its individual capacity.
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 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 and, accordingly, no further accrual or credit shall be required whenever
Stipulated Loss Value is to be calculated with reference to any such date.
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 SSB, the Lessor, the Owner
Participant, the Indenture Trustee, the Subordination Agent, any Liquidity
Provider or others, including, without limitation, payments of Stipulated Loss
Value, EBO Price and amounts calculated by reference to Termination Value 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. Shall have 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. N682FE), dated as of June 15, 1998, 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, 2005 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, 2016 or January 15, 2020, as the case may be, (ii) Section
4.02(a)(D) or (E) of the Lease, a Rent Payment Date that is on or after the
eighth anniversary of the Delivery Date and (iii) Section 4.02(a)(F) of the
Lease, January 15, 2018.
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 and, accordingly, no
further accrual or credit shall be required whenever Termination Value is to
be calculated with reference to any such date.
Transaction Costs. Those costs and expenses set forth in Section
10.01(a) of the Participation Agreement.
Transfer Date. Has the meaning set forth in Section 2.02(b) 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. N682FE), dated as of June 15, 1998, 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, and the Letter of
Credit and any rights thereunder.
UCC. Uniform Commercial Code.
Underwriters. Morgan Stanley & Co. Incorporated, Chase Securities
Inc., Citicorp Securities, Inc., Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc.
Underwriting Agreement. The Underwriting Agreement dated June 30,
1998, 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.