Intercreditor Agreement
Dated as of
May 1, 1997
AMONG
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not in its individual capacity
but solely as Pass Through Trustee under the
Federal Express Corporation Pass Through Trust 0000-0-X,
Xxxxxxx Express Corporation Pass Through Trust 1997-1-B
and
Federal Express Corporation Pass Through Trust 0000-0-X
XXXXXXXXXXX X.X., XXX XXXX BRANCH
as Class A Liquidity Provider and
Class B Liquidity Provider
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION
not in its individual capacity except
as expressly set forth herein but
solely as Subordination Agent and trustee hereunder
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions............................................ 2
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from
Monies Received Only................................... 20
SECTION 2.2 Trust Accounts......................................... 21
SECTION 2.3 Deposits to the Collection Account and Special Payments
Account................................................ 22
SECTION 2.4 Distributions of Special Payments...................... 22
SECTION 2.5 Designated Representatives............................. 25
SECTION 2.6 Controlling Party...................................... 25
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution......................... 27
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account................................................ 29
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event....................................... 30
SECTION 3.4 Other Payments......................................... 32
SECTION 3.5 Payments to the Pass Through Trustee and the Liquidity
Providers.............................................. 32
SECTION 3.6 Liquidity Facilities................................... 32
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party.................. 38
SECTION 4.2 Remedies Cumulative.................................... 39
SECTION 4.3 Discontinuance of Proceedings.......................... 40
SECTION 4.4 Right of Certificateholders and Liquidity Providers to
Receive Payments Not to Be Impaired.................... 40
SECTION 4.5 Undertaking for Costs.................................. 40
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF THE PASS THROUGH TRUSTEE, ETC.
SECTION 5.1 Notice of Indenture Event of Default or Triggering
Event.................................................. 40
SECTION 5.2 Indemnification........................................ 41
SECTION 5.3 No Duties Except as Specified in Intercreditor
Agreement.............................................. 41
SECTION 5.4 Notice from the Liquidity Providers and the Pass
Through Trustee........................................ 42
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization, Acceptance of Trusts and Duties......... 42
SECTION 6.2 Absence of Duties...................................... 42
SECTION 6.3 No Representations or Warranties as to Documents....... 42
SECTION 6.4 No Segregation of Monies; No Interest.................. 43
SECTION 6.5 Reliance; Agents; Advice of Counsel.................... 43
SECTION 6.6 Capacity in Which Acting............................... 44
SECTION 6.7 Compensation........................................... 44
SECTION 6.8 May Become Certificateholder........................... 44
SECTION 6.9 Subordination Agent Required; Eligibility.............. 44
SECTION 6.10 Money to Be Held in Trust.............................. 44
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification............................... 45
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment of
Successor.............................................. 45
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc............................... 47
SECTION 9.2 Subordination Agent Protected.......................... 48
SECTION 9.3 Effect of Supplemental Agreements...................... 48
SECTION 9.4 Notice to Rating Agencies.............................. 48
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement................. 48
SECTION 10.2 Intercreditor Agreement for Benefit of the Pass Through
Trustees, Liquidity Providers and Subordination Agent.. 49
SECTION 10.3 Notices................................................ 49
SECTION 10.4 Severability........................................... 50
SECTION 10.5 No Oral Modifications or Continuing Waivers............ 50
SECTION 10.6 Successors and Assigns................................. 50
SECTION 10.7 Headings............................................... 50
SECTION 10.8 Counterpart Form....................................... 50
SECTION 10.9 Subordination.......................................... 50
SECTION 10.10 GOVERNING LAW.......................................... 52
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity..................................... 52
Schedule 1 Indentures
Schedule 2 Participation Agreements
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT dated as of May 1, 1997, among FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association ("Pass
Through Trustee"), not in its individual capacity but solely as Trustee of
each Pass Through Trust (each as defined below), KREDIETBANK N.V., acting
through its New York Branch ("Liquidity Provider"), as Class A Liquidity
Provider and as Class B Liquidity Provider, and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity except as expressly set forth
herein, but solely as Subordination Agent and trustee hereunder (in such
capacity, together with any successor appointed pursuant to Article VIII
hereof, the "Subordination Agent").
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, pursuant to each Indenture, the related Owner Trustee
proposes to issue on a nonrecourse basis three series of Equipment Trust
Certificates to finance, or refinance the current indebtedness of such Owner
Trustee originally incurred to finance, the purchase of the Aircraft referred
to in such Indenture, which has been or will be leased to Federal Express
Corporation pursuant to the related Lease;
WHEREAS, pursuant to the Participation Agreements, each Pass
Through Trust will acquire those Equipment Trust Certificates having an
interest rate equal to the interest rate applicable to the Pass Through
Certificates to be issued by such Pass Through Trust;
WHEREAS, pursuant to the Pass Through Agreement, each Pass Through
Trust created thereby proposes to issue a single class of Pass Through
Certificates (a "Class") bearing the interest rate and having the final
distribution date described in the relevant series supplement on the terms and
subject to the conditions set forth therein;
WHEREAS, pursuant to the Underwriting Agreement, the Underwriters
propose to purchase the Pass Through Certificates issued by each Pass Through
Trust in the aggregate face amount set forth opposite the name of such Pass
Through Trust on Schedule I thereto on the terms and subject to the conditions
set forth therein;
WHEREAS, each Liquidity Provider proposes to enter into a
revolving credit agreement (each, a "Liquidity Facility") with the
Subordination Agent, as agent for the Pass Through Trustee of each Pass
Through Trust, for the benefit of the Certificateholders of both the Class A
Pass Through Trust and the Class B Pass Through Trust (but not the Class C
Pass Through Trust); and
WHEREAS, it is a condition precedent to the obligations of the
Underwriters under the Underwriting Agreement that the Subordination Agent,
the Pass Through Trustee and the Liquidity Providers agree to the terms of
subordination set forth in this Agreement in respect of each Class of Pass
Through Certificates, and the Subordination Agent, the Pass Through Trustee
and the Liquidity Providers, by entering into this Agreement, hereby
acknowledge and agree to such terms of subordination and the other provisions
of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms used herein that are defined in this Article have
the meanings assigned to them in this Article, and include the plural as
well as the singular;
(2) all references in this Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and other subdivisions of this Agreement;
(3) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(4) the term "including" shall mean "including without
limitation".
"Acceleration" means, with respect to the amounts payable in
respect of the Equipment Trust Certificates issued under any Indenture,
the declaration or deemed declaration of such amounts to be immediately
due and payable. "Accelerate", "Accelerated" and "Accelerating" have
meanings correlative to the foregoing.
"Adjusted Expected Distributions" means with respect to the Pass
Through Certificates of any Class on any Current Distribution Date the
sum of (x) the amount of accrued and unpaid interest on such Pass
Through Certificates plus (y) the greater of:
(A) the difference between (x) the Pool Balance of such
Pass Through Certificates as of the immediately preceding
Distribution Date and (y) the Pool Balance of such Pass Through
Certificates as of the Current Distribution Date calculated on the
basis that (i) the principal of the Non-Performing Equipment Trust
Certificates held in such Pass Through Trust has been paid in full
and such payments have been distributed to the holders of such
Pass Through Certificates; (ii) the principal of the Performing
Equipment Trust Certificates has been paid when due (but without
giving effect to any acceleration of Performing Equipment Trust
Certificates) and has been distributed to the holders of such Pass
Through Certificates; and (iii) the principal of any Equipment
Trust Certificates formerly held in such Pass Through Trust which
have been sold pursuant to the terms hereof have been paid in full
and such payments have been distributed to the holders of such
Pass Through Certificates; and
(B) the amount, if any, by which (i) the Pool Balance of
such Class of Pass Through Certificates as of the immediately
preceding Distribution Date exceeds (ii) the Aggregate LTV
Collateral Amount for such Class of Pass Through Certificates for
the Current Distribution Date;
provided that, until the date of the initial LTV Appraisals, clause (B)
above shall not be applicable.
"Affiliate" means, 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" means 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;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"Aggregate LTV Collateral Amount" means, for any Class of Pass
Through Certificates for any Distribution Date, the sum of the
applicable LTV Collateral Amounts for each Aircraft minus the Pool
Balance for each Class of Pass Through Certificates, if any, senior to
such Class after giving effect to any distribution of principal on such
Distribution Date on such senior Class or Classes.
"Aircraft" means, with respect to any Indenture, the "Aircraft"
referred to therein.
"Appraised Current Market Value" of any Aircraft means the lower
of the average and the median of the most recent three LTV Appraisals of
such Aircraft.
"Appraisers" means Aircraft Information Services, Inc., Simat,
Helliesen & Xxxxxxx, Inc. and Xxxxxx Xxxxx and Associates, Inc.
"Available Amount" means, with respect to any Liquidity Facility
on any drawing date, an amount equal to (a) the Stated Amount of such
Liquidity Facility, less (b) the amount of each Interest Drawing honored
by the Liquidity Provider under such Liquidity Facility on or prior to
such date which has not been reimbursed or reinstated as of such date;
provided that, following a Downgrade Drawing or a Final Drawing under
such Liquidity Facility, the Available Amount of such Liquidity Facility
shall be zero.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Memphis, Tennessee, New York, New York, or the city and state in which
the Pass Through Trustee, the Subordination Agent or any Indenture
Trustee maintains its Corporate Trust Office or receives and disburses
funds.
"Cash Account" means the Class A Cash Account, the Class B Cash
Account or the Class C Cash Account, as applicable.
"Certificateholder" means any holder of one or more Pass Through
Certificates.
"Class" has the meaning assigned to such term in the preliminary
statements to this Agreement.
"Class A Cash Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into
which all amounts drawn under the Class A Liquidity Facility pursuant to
Section 3.6(c) or 3.6(i) shall be deposited.
"Class A Liquidity Facility" means, initially, the irrevocable
revolving credit agreement dated as of May 1, 1997, between the
Subordination Agent, as agent of the Pass Through Trustee of the Class A
Pass Through Trust, and the Class A Liquidity Provider, and, from and
after the replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Class A Liquidity Provider" means Kredietbank N.V., acting
through its New York Branch, together with any Replacement Liquidity
Provider which has issued a Replacement Liquidity Facility to replace
the Class A Liquidity Facility pursuant to Section 3.6(e).
"Class A Pass Through Certificateholder" means, at any time, any
holder of one or more Class A Pass Through Certificates.
"Class A Pass Through Certificates" means the certificates issued
by the Class A Pass Through Trust, substantially in the form of Exhibit
A to the Class A Supplement, and authenticated by the Pass Through
Trustee of the Class A Pass Through Trust, representing fractional
undivided interests in the Class A Pass Through Trust, and any
certificates issued in exchange therefor or replacement thereof pursuant
to the terms of the Class A Supplement.
"Class A Pass Through Trust" means the Federal Express Corporation
1997-l-A Pass Through Trust created and administered pursuant to the
Class A Supplement.
"Class A Supplement" means the Pass Through Trust Agreement, dated
as of May 1, 1997, between Federal Express Corporation and the Pass
Through Trustee, as supplemented by the Series Supplement 1997-1-A
between Federal Express Corporation and the Pass Through Trustee of the
Class A Pass Through Trust, governing the creation and administration
of the Class A Pass Through Trust and the issuance of the Class A
Pass Through Certificates, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms.
"Class B Cash Account" means an Eligible Deposit Account in the
name of the Subordination Agent maintained at an Eligible Institution,
which shall be the Subordination Agent if it shall so qualify, into
which all amounts drawn under the Class B Liquidity Facility pursuant to
Section 3.6(c) or 3.6(i) shall be deposited.
"Class B Liquidity Facility" means, initially, the irrevocable
revolving credit agreement dated as of May 1, 1997, between the
Subordination Agent, as agent of the Pass Through Trustee of the Class B
Pass Through Trust, and the Class B Liquidity Provider, and, from and
after the replacement of such Agreement pursuant hereto, the Replacement
Liquidity Facility therefor, if any, in each case as amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Class B Liquidity Provider" means Kredietbank N.V., acting
through its New York Branch, together with any Replacement Liquidity
Provider which has issued a Replacement Liquidity Facility to replace
the Class B Liquidity Facility pursuant to Section 3.6(e).
"Class B Pass Through Certificateholder" means, at any time, any
holder of one or more Class B Pass Through Certificates.
"Class B Pass Through Certificates" means the certificates issued
by the Class B Pass Through Trust, substantially in the form of Exhibit
A to the Class B Supplement, and authenticated by the Pass Through
Trustee of the Class B Pass Through Trust, representing fractional
undivided interests in the Class B Pass Through Trust, and any
certificates issued in exchange therefor or replacement thereof pursuant
to the terms of the Class B Supplement.
"Class B Pass Through Trust" means the Federal Express Corporation
1997-1-B Pass Through Trust created and administered pursuant to the
Class B Supplement.
"Class B Supplement" means the Pass Through Trust Agreement,
dated as of May 1, 1997, between Federal Express Corporation and the
Pass Through Trustee, as supplemented by the Series Supplement
1997-1-B between Federal Express Corporation and the Pass Through
Trustee of the Class B Pass Through Trust, governing the creation and
administration of the Class B Pass Through Trust and the issuance of
the Class B Pass Through Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Class C Pass Through Certificateholder" means, at any time, any
holder of one or more Class C Pass Through Certificates.
"Class C Pass Through Certificates" means the certificates issued
by the Class C Pass Through Trust, substantially in the form of Exhibit
A to the Class C Supplement, and authenticated by the Pass Through
Trustee of the Class C Pass Through Trust, representing fractional
undivided interests in the Class C Pass Through Trust, and any
certificates issued in exchange therefor or in replacement thereof
pursuant to the terms of the Class C Supplement.
"Class C Pass Through Trust" means the Federal Express Corporation
1997-l-C Pass Through Trust created and administered pursuant to the
Class C Supplement.
"Class C Supplement" means the Pass Through Trust Agreement,
dated as of May 1, 1997, between Federal Express Corporation and the
Pass Through Trustee as supplemented by the Series Supplement 1997-1-C
between Federal Express Corporation and the Pass Through Trustee of
the Class C Pass Through Trust, governing the creation and
administration of the Class C Pass Through Trust and the issuance of
the Class C Pass Through Certificates, as the same may be amended,
supplemented or otherwise modified from time to time in accordance
with its terms.
"Closing Date" means May 28, 1997.
"Collection Account" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.2 which the
Subordination Agent shall make deposits in and withdrawals from in
accordance with this Agreement.
"Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.
"Corporate Trust Office" means, with respect to any Pass Through
Trustee, the Subordination Agent or any Indenture Trustee, the office of
such Person in the city at which, at any particular time, its corporate
trust business shall be principally administered.
"Current Distribution Date" means a Distribution Date specified as
a reference date for calculating the Adjusted Expected Distributions or
Expected Distributions with respect to the Pass Through Certificates of
any Pass Through Trust as of such Distribution Date.
"Designated Representatives" means the Trustee Representatives and
the LP Representatives identified under Section 2.5.
"Distribution Date" means a Regular Distribution Date or a Special
Distribution Date.
"Dollars" or "$" means United States dollars.
"Downgrade Drawing" has the meaning assigned to such term in
Section 3.6(c).
"Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).
"Drawing" means an Interest Drawing, a Final Drawing or a Downgrade
Drawing, as the case may be.
"Eligible Deposit Account" means either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under
the laws of the United States of America or any one of the states
thereof or the District of Columbia (or any U.S. branch of a foreign
bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such
depository institution has a long-term unsecured debt rating from each
Rating Agency of at least A-3 or its equivalent. An Eligible Deposit
Account may be maintained with a Liquidity Provider so long as such
Liquidity Provider is an Eligible Institution; provided that such
Liquidity Provider shall have waived all rights of setoff and
counterclaim with respect to such account; and provided further that no
Cash Account may be maintained with a Liquidity Provider at any time
Federal Express Corporation holds any participation in the related
Liquidity Facility unless written confirmation shall have been received
from each Rating Agency prior to such time to the effect that such
maintenance of the Cash Account with the Liquidity Provider will not
result in a withdrawal or downgrading of the ratings of the Pass Through
Certificates.
"Eligible Institution" means, subject to the last sentence of
Section 2.2(c), (a) the corporate trust department of the Subordination
Agent or any Pass Through Trustee, as applicable, or (b) a depository
institution organized under the laws of the United States of America or
any one of the states thereof or the District of Columbia (or any U.S.
branch of a foreign bank), which has a long-term unsecured debt rating
from each Rating Agency of at least A-3 or its equivalent; provided that
a Liquidity Provider shall not qualify as an Eligible Institution at any
time Federal Express Corporation holds any participation in the related
Liquidity Facility unless written confirmation shall have been received
from each Rating Agency to the effect that such Liquidity Provider's
status as an Eligible Institution will not result in a withdrawal or
downgrading of the ratings of the Pass Through Certificates.
"Equipment Trust Certificates" means, at any time, the Series A
Equipment Trust Certificates, the Series B Equipment Trust Certificates
and the Series C Equipment Trust Certificates, collectively, and in each
case, any Equipment Trust Certificates issued in exchange therefor or
replacement thereof pursuant to the terms of the Indentures.
"Expected Distributions" means, with respect to the Pass Through
Certificates of any Pass Through Trust on any Current Distribution Date,
the sum of (x) accrued and unpaid interest on such Certificates and (y)
the difference between (A) the Pool Balance of such Certificates as of
the immediately preceding Distribution Date and (B) the Pool Balance of
such Certificates as of the Current Distribution Date, calculated on the
basis that (1) the principal of the Equipment Trust Certificates held
in such Pass Through Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment, purchase or acceleration or
otherwise) and such payments have been distributed to the holders of
such Certificates and (2) the principal of any Equipment Trust
Certificates formerly held in such Pass Through Trust that have been
sold pursuant to this Agreement has been paid in full and such payments
distributed to the Certificateholders. For purposes of calculating
Expected Distributions, any premium paid on the Equipment Trust
Certificates held in any Pass Through Trust which has not been
distributed to the Certificateholders of such Pass Through Trust (other
than such premium or a portion thereof applied to the payment of
interest on the Pass Through Certificates of such Pass Through Trust or
the reduction of the Pool Balance of such Pass Through Trust) shall be
added to the amount of such Expected Distributions.
"Federal Express Corporation" means Federal Express Corporation, a
Delaware corporation, and its successors and assigns.
"Federal Express Corporation Bankruptcy Event" means the
occurrence and continuation of any of the following:
(a) an order for relief shall be entered in respect of
Federal Express Corporation by a court having jurisdiction in the
premises in an involuntary case under the federal bankruptcy laws
as now or hereafter in effect; or Federal Express Corporation
shall consent to the appointment of a custodian, receiver, trustee
or liquidator of itself or of a substantial part of its property;
or Federal Express Corporation is not paying, or shall admit in
writing its inability to pay, its debts generally as they come due
or shall make a general assignment for the benefit of creditors;
or Federal Express Corporation shall file, or the Board of
Directors of Federal Express Corporation shall authorize the
filing of, or grant one or more persons authority (at their
discretion) to make a filing for, a voluntary petition in
bankruptcy or a voluntary petition or an answer seeking
reorganization in a proceeding under any bankruptcy laws (as now
or hereafter in effect) or an answer admitting the material
allegations of a petition filed against Federal Express
Corporation in any such proceeding; or Federal Express Corporation
shall file, or the Board of Directors of Federal Express
Corporation shall authorize Federal Express Corporation to, or
grant one or more persons authority (at their discretion) to, seek
relief by voluntary petition, answer or consent, under the
provisions of any other or future bankruptcy or other similar law
providing for the reorganization or winding-up of corporations, or
providing for an agreement, composition, extension or adjustment
with its creditors; or
(b) an order, judgment or decree shall be entered by any
court of competent jurisdiction appointing, without the consent of
Federal Express Corporation, a custodian, receiver, trustee, or
liquidator of Federal Express Corporation or of any substantial
part of its property, or sequestering any substantial part of the
property of Federal Express Corporation, or granting any other
relief in respect of Federal Express Corporation under the federal
bankruptcy laws or other insolvency laws, and any such order,
judgment or decree of appointment or sequestration shall remain in
force undismissed or unvacated for a period of 60 days after the
date of its entry; or
(c) a petition against Federal Express Corporation in a
proceeding under the federal bankruptcy law or other insolvency
laws (as now or hereafter in effect) shall be filed and shall not
be withdrawn or dismissed within 60 days, or under the provisions
of any law providing for reorganization or winding-up of
corporations which may apply to Federal Express Corporation, any
court of competent jurisdiction shall assume jurisdiction, custody
or control of Federal Express Corporation or of any substantial
part of its property and such jurisdiction, custody or control
shall remain in force unrelinquished or unterminated for 60 days.
"Final Distributions" means, with respect to the Pass Through
Certificates of any Pass Through Trust on any Distribution Date, the sum
of (a) the aggregate amount of all accrued and unpaid interest on such
Pass Through Certificates and (b) the Pool Balance of such Pass Through
Certificates as of the immediately preceding Distribution Date. For
purposes of calculating Final Distributions, any premium paid on the
Equipment Trust Certificates held in any Pass Through Trust which has
not been distributed to the Certificateholders of such Pass Through
Trust shall be added to the amount of such Final Distributions.
"Final Drawing" means, in respect of a Liquidity Facility, a
borrowing or drawing of all available and undrawn amounts under such
Liquidity Facility in accordance with the provisions thereof other than
a Downgrade Drawing.
"Final Legal Distribution Date" means, July 15, 2019 for the Class
A Pass Through Certificates, July 15, 2019 for the Class B Pass Through
Certificates and January 15, 2014 for the Class C Pass Through
Certificates.
"Indenture" means each Trust Indenture and Security Agreement
listed on Schedule I hereto, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Indenture Event of Default" means, with respect to any Indenture,
any Event of Default (as such term is defined in such Indenture)
thereunder.
"Indenture Trustee" means, with respect to any Indenture, First
Security Bank, National Association, together with any other indenture
trustee appointed pursuant thereto.
"Interest Drawing" has the meaning assigned to such term in
Section 3.6(a).
"Investment Earnings" means investment earnings on funds on
deposit in the Trust Accounts net of losses and investment expenses of
the Subordination Agent in making such investments.
"Lease" means, with respect to any Indenture, the "Lease" referred
to therein.
"Lien" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease or
security interest of any kind, including, without limitation, any
thereof arising under any conditional sales or other title retention
agreement.
"Liquidity Event of Default", with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity
Facility.
"Liquidity Expenses" means all Liquidity Obligations other than
(i) the principal amount of any Drawings under the Liquidity Facilities
and (ii) any interest accrued on any Liquidity Obligations.
"Liquidity Facility" means, at any time, the Class A Liquidity
Facility or the Class B Liquidity Facility, as applicable.
"Liquidity Obligations" means all principal, interest, fees and
other amounts owing to the Liquidity Providers under the Liquidity
Facilities and Articles 8, 9 and 10 of the Participation Agreements.
"Liquidity Provider" means, at any time, the Class A Liquidity
Provider or the Class B Liquidity Provider, as applicable.
"LP Incumbency Certificate" has the meaning assigned to such term
in Section 2.5(b).
"LP Representatives" has the meaning assigned to such term in
Section 2.5(b).
"LTV Appraisal" means a current fair market appraisal (which may
be a "desktop" appraisal) performed by any Appraiser or any other
nationally recognized appraiser on the basis of an arm's-length
transaction between an informed and willing purchaser under no
compulsion to buy and an informed and willing seller under no compulsion
to sell and both having knowledge of all relevant facts.
"LTV Collateral Amount" of any Aircraft for any Class of Pass
Through Certificates on any Distribution Date means the lesser of (i)
the LTV Ratio for such Class of Pass Through Certificates multiplied by
the Appraised Current Market Value of such Aircraft (or with respect to
any such Aircraft which has suffered an Event of Loss under the related
Lease, the amount of the insurance proceeds paid or payable to the
Indenture Trustee in respect thereof) and (ii) the outstanding principal
amount of the Equipment Trust Certificates secured by such Aircraft
after giving effect to any principal payments of such Equipment Trust
Certificates on or before such Distribution Date.
"LTV Ratio" means for the Class A Pass Through Certificates 39.7%,
for the Class B Pass Through Certificates 54.5% and for the Class C Pass
Through Certificates 71.0%.
"Minimum Sale Price" means, with respect to any Aircraft or the
Equipment Trust Certificates issued in respect of such Aircraft, at any
time, the lesser of (a) 75% of the Appraised Current Market Value of
such Aircraft based upon the most recent LTV Appraisal and (b) the
aggregate outstanding principal amount of such Equipment Trust
Certificates, plus accrued and unpaid interest thereon.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Non-Controlling Party" means, at any time, the Pass Through
Trustee or the Liquidity Provider which is not the Controlling Party at
such time.
"Non-Extension Drawing" has the meaning provided in Section
3.6(d).
"Non-Performing Equipment Trust Certificates" means Equipment
Trust Certificates other than Performing Equipment Trust
Certificates.
"Officer's Certificate" of any Person means a certification signed
by a Responsible Officer of such Person.
"Operative Agreements" means this Agreement, the Participation
Agreements, the Pass Through Agreement, and any other document which
is an "Operative Agreement" under any Participation Agreement.
"Outstanding" means, when used with respect to each Class of Pass
Through Certificates, as of the date of determination, all Pass Through
Certificates of such Class theretofore authenticated and delivered under
the related Pass Through Agreement, except:
(i) Pass Through Certificates of such Class theretofore
cancelled by the Registrar (as defined in such Pass Through
Agreement) or delivered to the Pass Through Trustee thereunder or
such Registrar for cancellation;
(ii) Pass Through Certificates of such Class for which
money in the full amount required to make the final distribution
with respect to such Pass Through Certificates pursuant to Section
11.01 of such Pass Through Agreement has been theretofore
deposited with the Pass Through Trustee in trust for the holders
of such Pass Through Certificates as provided in Section 4.01 of
such Pass Through Agreement pending distribution of such money to
such Certificateholders pursuant to such final distribution
payment; and
(iii) Pass Through Certificates of such Class in exchange
for or in lieu of which other Pass Through Certificates have been
authenticated and delivered pursuant to such Pass Through
Agreement;
provided, however, that in determining whether the holders of the
requisite Outstanding amount of such Pass Through Certificates have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder, any Pass Through Certificates owned by Federal Express
Corporation or any of its Affiliates shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Pass Through
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Pass Through
Certificates that the Pass Through Trustee knows to be so owned shall be
so disregarded. Pass Through Certificates so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Pass Through Trustee the
pledgee's right so to act with respect to such Pass Through Certificates
and that the pledgee is not Federal Express Corporation or any of its
Affiliates.
"Overdue Scheduled Payment" means any Scheduled Payment which is
not in fact received by the Subordination Agent within five days of the
Scheduled Payment Date relating thereto.
"Owner Trustee" means, with respect to any Indenture, the Owner
Trustee (as defined therein) not in its individual capacity but solely
as trustee under the related owner trust agreement, together with any
successor trustee appointed pursuant to such owner trust agreement.
"Participation Agreements" means each of the Participation
Agreements listed on Schedule 2 hereto, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Pass Through Agreement" means the Pass Through Trust Agreement,
dated as of May 1, 1997, between Federal Express Corporation and the
Pass Through Trustee, as supplemented by the Series Supplement 1997-1-A,
the Series Supplement 1997-1-B or the Series Supplement 1997-1-C.
"Pass Through Certificate" means a Class A Pass Through
Certificate, a Class B Pass Through Certificate or a Class C Pass
Through Certificate, as applicable.
"Pass Through Trust" means any of the Class A Pass Through Trust,
the Class B Pass Through Trust or the Class C Pass Through Trust.
"Pass Through Trustee" means, for the Class A, Class B and Class C
Pass Through Trusts, First Security Bank, National Association, not in
its individual capacity except as expressly set forth in the Class A,
Class B and Class C Supplements, respectively, but solely as trustee
under such supplements, together with any successor trustee appointed
pursuant thereto.
"Performing Certificate Deficiency" means any time that less than
65% of the then aggregate outstanding principal amount of all Equipment
Trust Certificates are Performing Equipment Trust Certificates.
"Performing Equipment Trust Certificates" means Equipment Trust
Certificates issued pursuant to an Indenture with respect to which no
payment default has occurred and is continuing (without giving effect to
any acceleration thereof); provided that in the event of a bankruptcy
proceeding involving Federal Express Corporation under Title 11 of the
United States Code (the "Bankruptcy Code"), (i) any payment default
existing during 60-day period under Section 1110(a)(1)(A) of the
Bankruptcy Code (or such longer period as may apply under Section
1110(b) of the Bankruptcy Code) (the "Section 1110 Period") shall not be
taken into consideration, unless during such period the trustee in such
proceeding or Federal Express Corporation refuses to assume or agree to
perform its obligations under the Lease related to such Equipment Trust
Certificates and (ii) any payment default occurring after the date of
the order of relief in such proceeding shall not be taken into
consideration if such payment default is cured under Section
1110(a)(1)(B) of the Bankruptcy Code before the later of 30 days after
the date of such default or the expiration of the Section 1110 Period.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, trustee,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance" means, with respect to each Pass Through Trust or
the Pass Through Certificates issued by any Pass Through Trust, as of
any date, (i) the original aggregate face amount of the Pass Through
Certificates of such Pass Through Trust less (ii) the aggregate amount
of all payments made in respect of the Pass Through Certificates of such
Trust other than payments made in respect of interest or premium thereon
or reimbursement of any costs and expenses in connection therewith. The
Pool Balance for each Pass Through Trust or the Pass Through
Certificates issued by any Pass Through Trust as of any Distribution
Date shall be computed after giving effect to any payment of principal,
if any, on the Equipment Trust Certificates or other Trust Property held
in such Pass Through Trust and the distribution thereof to be made on
such date.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PTC Event of Default" means, with respect to each Pass Through
Agreement, the failure to pay within 10 Business Days of the due date
thereof: (i) the outstanding Pool Balance of the applicable Class of
Pass Through Certificates on the Final Legal Distribution Date for such
Class or (ii) interest due on such Pass Through Certificates on any
Distribution Date (unless, in the case of the Class A or Class B
Certificates, the Subordination Agent shall have made an Interest
Drawing with respect thereto in an amount sufficient to pay such
interest and shall have distributed such amount to the holders of the
Pass Through Certificates entitled thereto).
"Rating Agencies" means, 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. Initially, the Rating Agencies shall consist
of Moody's and Standard & Poor's.
"Ratings Confirmation" means, with respect to any action proposed
to be taken, a written confirmation from each of the Rating Agencies
that such action 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.
"Regular Distribution Dates" means each January 15 and July 15,
commencing on July 15, 1997; provided, however, that, if any such day
shall not be a Business Day, the related distribution shall be made on
the next succeeding Business Day without additional interest.
"Replacement Liquidity Facility" means, for the Class A Pass
Through Trust or the Class B Pass Through Trust, an irrevocable
revolving credit agreement in substantially the form of the initial
Liquidity Facility for such Pass Through Trust, including reinstatement
provisions or in such other form (which may include a letter of credit)
as shall permit the Rating Agencies to confirm in writing their
respective ratings then in effect for the Pass Through Certificates
(before downgrading of such ratings, if any, as a result of the
downgrading of the Liquidity Provider), in a face amount equal to the
Required Amount for such Liquidity Facility and issued by a Replacement
Liquidity Provider, provided that, if a form of Liquidity Facility that
is not substantially in the form of the replaced Liquidity Facility is
to be used, Federal Express Corporation shall have received a
satisfactory opinion of tax counsel satisfactory to Federal Express
Corporation with respect to such form of Replacement Liquidity Facility
(and a copy of such opinion shall be furnished to the Subordination
Agent).
"Replacement Liquidity Provider" means a Person having unsecured
debt ratings by each Rating Agency which are equal to or higher than the
Threshold Rating.
"Required Amount" means, with respect to each Liquidity Facility
and each Cash Account related thereto, for any day, the sum of the
aggregate amount of interest, calculated at the rate per annum equal to
the Stated Interest Rate for the related Class of Pass Through
Certificates, that would be payable on such Class of Pass Through
Certificates on each of the three successive Regular Distribution Dates
immediately following such day or, if such day is a Regular Distribution
Date, on such day and the succeeding two Regular Distribution Dates, in
each case calculated on the basis of the Pool Balance of such Class of
Pass Through Certificates on such date and without regard to expected
future payments of principal on such Class of Pass Through Certificates.
"Responsible Officer" means (i) with respect to the Subordination
Agent and the Pass Through Trustee, any officer in the corporate trust
administration department of the Subordination Agent or the Pass Through
Trustee or any other officer customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because
of such person's knowledge of and familiarity with a particular subject
and (ii) with respect to each Liquidity Provider, any authorized officer
of such Liquidity Provider.
"Scheduled Payment" means, with respect to (x) any Equipment Trust
Certificates, (i) any payment of principal and interest on such
Equipment Trust Certificates (other than an Overdue Scheduled Payment)
due from the obligor thereon or (ii) any payment of interest on the
corresponding Class of Pass Through Certificates with funds drawn under
any Liquidity Facility, which payment represents the installment of
principal at the stated maturity of such installment of principal on
such Equipment Trust Certificates, the payment of regularly scheduled
interest accrued on the unpaid principal amount of such Equipment Trust
Certificates, or both; provided that any payment of principal of,
premium, if any, or interest resulting from the redemption or purchase
of any Equipment Trust Certificates shall not constitute a Scheduled
Payment and (y) the Pass Through Certificates of any Class shall be
deemed to be comprised of interest and principal components, with the
interest component equaling interest accrued at the Stated Interest Rate
for such Class of Pass Through Certificates from (i) the later of (1)
the date of the issuance thereof and (2) the most recent but preceding
Regular Distribution Date to (ii) the Regular Distribution Date on which
such Scheduled Payment is being made, such interest to be considered
payable in arrears on such Regular Distribution Date and to be
calculated and allocated in the same manner as interest on the Equipment
Trust Certificates.
"Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be
made.
"Series A Equipment Trust Certificates" means the 7.50% Series A
Equipment Trust Certificates issued pursuant to each Indenture by the
related Owner Trustee and authenticated by the Indenture Trustee
thereunder, and any such Equipment Trust Certificates issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"Series B Equipment Trust Certificates" means the 7.52% Series B
Equipment Trust Certificates issued pursuant to each Indenture by the
related Owner Trustee and authenticated by the Indenture Trustee
thereunder, and any such Equipment Trust Certificates issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"Series C Equipment Trust Certificates" means the 7.65% Series C
Equipment Trust Certificates issued pursuant to each Indenture by the
related Owner Trustee and authenticated by the Indenture Trustee
thereunder, and any such Equipment Trust Certificates issued in exchange
therefor or replacement thereof pursuant to the terms of such Indenture.
"Special Distribution Date" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section
2.4(a) for the distribution of such Special Payment in accordance with
this Agreement; provided, however, that, if any such day shall not be a
Business Day, the related distribution shall be made on the next
succeeding Business Day without additional interest.
"Special Payment" means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Trust
Certificates or the Trust Indenture Estate (as defined in each
Indenture), including Overdue Scheduled Payments, payments in respect of
the redemption or repurchase of any Equipment Trust Certificates and
payments in respect of the sale of any Equipment Trust Certificates to
the related Owner Trustee, Owner Participant or any other Person.
"Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account in the Collection
Account.
"Specified Investments" means (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 Standard & Poor's
Ratings Group and Xxxxx'x Investor Service, Inc., 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 Systems
arranged by federal funds brokers; and (e) overnight repurchase
agreements with respect to 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 of 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.
"Standard & Poor's" means Standard & Poor's Rating Group, a
division of XxXxxx-Xxxx Inc.
"Stated Amount" with respect to any Liquidity Facility, means the
Commitment (as defined in such Liquidity Facility) of the applicable
Liquidity Provider thereunder.
"Stated Interest Rate" means (i) with respect to the Class A Pass
Through Certificates, 7.50% per annum, (ii) with respect to the Class B
Pass Through Certificates, 7.52% per annum and (iii) with respect to the
Class C Pass Through Certificates, 7.65%.
"Subordination Agent" means First Security Bank, National
Association, not in its individual capacity except as expressly set
forth herein, but solely as agent and trustee as provided for in this
Agreement, together with any successor appointed pursuant to Article
VIII of this Agreement.
"Tax" and "Taxes" mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, loss, damage, liability, expense, additions to
tax and additional amounts or costs incurred or imposed with respect
thereto) imposed or otherwise assessed by the United States or by any
state, local or foreign government (or any subdivision or agency
thereof) or other taxing authority, including, without limitation:
taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use, capital
stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth and similar charges; taxes or
other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added, taxes on goods and services, gains taxes, license,
registration and documentation fees, customs duties, tariffs, and
similar charges.
"Threshold Rating" means the short-term unsecured debt rating of
P-1 by Moody's and A-1 by Standard & Poor's; provided that, in the event
a person's short-term unsecured debt is not rated by either Moody's or
Standard & Poor's, the long-term unsecured debt rating by Moody's and
Standard & Poor's at least equal to the initial rating by each of
Moody's and Standard & Poor's on the Class A Pass Through Certificates.
"Triggering Event" means (x) the occurrence of an Indenture Event
of Default under all of the Indentures resulting in a PTC Event of
Default with respect to the most senior Class of Pass Through
Certificates then Outstanding, (y) the Acceleration of, or a failure to
pay at final maturity, all of the outstanding Equipment Trust
Certificates or (z) the occurrence of a Federal Express Corporation
Bankruptcy Event.
"Trust Accounts" has the meaning assigned to such term in Section
2.2(a).
"Trustee Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(a).
"Trustee Representatives" has the meaning assigned to such term in
Section 2.5(a).
"Underwriters" means Xxxxxx Xxxxxxx & Co. Incorporated, First
Chicago Capital Markets, Inc., Xxxxxxx, Sachs & Co. and X.X. Xxxxxx
Securities Inc.
"Underwriting Agreement" means the Underwriting Agreement dated
May 22, 1997, among the Underwriters and Federal Express Corporation,
relating to the purchase of the Pass Through Certificates by the
Underwriters, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Written Notice" means, from (i) the Pass Through Trustee or
Liquidity Provider, a written instrument executed by the Designated
Representative of such Person, and (ii) the Subordination Agent, a
written instrument executed by a Person designated in the Officer's
Certificate of the Subordination Agent delivered on the Closing Date.
An invoice delivered by a Liquidity Provider pursuant to Section 3.1 in
accordance with its normal invoicing procedures shall constitute Written
Notice under such Section.
ARTICLE II
TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1 Agreement to Terms of Subordination; Payments from
Monies Received Only. (a) Each Pass Through Trustee hereby acknowledges and
agrees to the terms of subordination set forth in this Agreement in respect of
each Class of Pass Through Certificates and agrees to enforce such provisions
and cause all payments in respect of the Equipment Trust Certificates and the
Liquidity Facilities to be applied in accordance with the terms of this
Agreement. In addition, each Pass Through Trustee hereby agrees to cause the
Equipment Trust Certificates purchased by the related Pass Through Trust to be
registered in the name of the Subordination Agent, as nominee for such Pass
Through Trustee, to be held in trust by the Subordination Agent solely for the
purpose of facilitating the enforcement of the subordination and other
provisions of this Agreement.
(b) Except as otherwise expressly provided in the next
succeeding sentence of this Section 2.1, all payments to be made by the
Subordination Agent hereunder shall be made only from amounts received by it
that constitute Scheduled Payments, Special Payments or payments under
Articles 8, 9 and 10 of the Participation Agreements, and only to the extent
that the Subordination Agent shall have received sufficient income or proceeds
therefrom to enable it to make such payments in accordance with the terms
hereof. Each Pass Through Trustee and the Subordination Agent hereby agree
and, as provided in each Pass Through Agreement, each Certificateholder, by
its acceptance of a Pass Through Certificate, and each Liquidity Provider, by
entering into the Liquidity Facility to which it is a party, has agreed to
look solely to such amounts to the extent available for distribution to it as
provided in this Agreement and that none of the Pass Through Trustees, Owner
Trustees, Indenture Trustees, Owner Participants nor the Subordination Agent
is personally liable to any of them for any amounts payable or any liability
under this Agreement, any Pass Through Agreement, any Liquidity Facility or
such Pass Through Certificate, except (in the case of the Subordination Agent)
as expressly provided herein or (in the case of the Pass Through Trustee) as
expressly provided in each Pass Through Agreement or (in the case of the Owner
Trustees and the Indenture Trustees) as expressly provided in any Operative
Agreement.
SECTION 2.2 Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name
(i) the Collection Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Pass Through Trustees, the Certificateholders and
the Liquidity Providers and (ii) as a sub-account in the Collection Account,
the Special Payments Account as an Eligible Deposit Account, bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Pass Through Trustees, the Certificateholders and
the Liquidity Providers. The Subordination Agent shall establish and maintain
the Cash Accounts pursuant to and under the circumstances set forth in Section
3.6(f) hereof. Upon such establishment and maintenance under Section 3.6(f)
hereof, the Cash Accounts shall, together with the Collection Account,
constitute the "Trust Accounts" hereunder.
(b) Funds on deposit in the Trust Accounts shall be invested and
reinvested by the Subordination Agent in Specified Investments selected by the
Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment;
provided, however, that following the making of a Downgrade Drawing or a
Non-Extension Drawing under any Liquidity Facility, the Subordination Agent
shall invest and reinvest such amounts at the direction of the Liquidity
Provider funding such Drawing and such Liquidity Provider shall use reasonable
efforts to cause such amounts to be invested in Specified Investments which
yield at least an amount equal to the interest (excluding the Applicable
Margin) that is payable to such Liquidity Provider in respect of such amounts
pursuant to Section 3.07 of the relevant Liquidity Facility (it being
understood that it may not be feasible to obtain such a yield). Unless
otherwise expressly provided in this Agreement (including, without limitation,
with respect to Investment Earnings on deposit in the Cash Accounts, Section
3.6(f) hereof), any Investment Earnings shall be deposited in the Collection
Account when received by the Subordination Agent and shall be applied by the
Subordination Agent in the same manner as the principal amount of such
investment is to be applied and any losses shall be charged against the
principal amount invested, in each case net of the Subordination Agent's
reasonable fees and expenses in making such investments. The Subordination
Agent shall not be liable for any loss resulting from any investment,
reinvestment or liquidation required to be made under this Agreement other
than by reason of its willful misconduct or gross negligence. Specified
Investments and any other investment required to be made hereunder shall be
held to their maturities except that any such investment may be sold (without
regard to its maturity) by the Subordination Agent without instructions
whenever such sale is necessary to make a distribution required under this
Agreement. Uninvested funds held hereunder shall not earn or accrue interest.
(c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and
in all proceeds thereof (including all income thereon, except as otherwise
provided herein with respect to Investment Earnings). The Trust Accounts
shall be held in trust by the Subordination Agent under the sole dominion and
control of the Subordination Agent for the benefit of the Pass Through
Trustees, the Certificateholders and the Liquidity Providers, as the case may
be. If, at any time, any of the Trust Accounts ceases to be an Eligible
Deposit Account, the Subordination Agent shall within 10 Business Days (or
such longer period, not to exceed 30 calendar days, to which each Rating
Agency may consent) establish a new Collection Account, Special Payments
Account or Cash Account, as the case may be, as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Collection
Account, Special Payments Account or Cash Account, as the case may be. So
long as the Subordination Agent is an Eligible Institution, the Trust
Accounts shall be maintained with it as Eligible Deposit Accounts.
SECTION 2.3 Deposits to the Collection Account and Special
Payments Account. (a) The Subordination Agent shall, upon receipt thereof,
deposit in the Collection Account all Scheduled Payments received by it.
(b) The Subordination Agent shall, on each date when one or more
Special Payments are made to the Subordination Agent as holder of the
Equipment Trust Certificates, deposit in the Special Payments Account the
aggregate amount of such Special Payments.
SECTION 2.4 Distributions of Special Payments. (a) Notice of
Special Payment. Except as provided in Section 2.4(e) below, upon receipt by
the Subordination Agent, as registered holder of the Equipment Trust
Certificates, of any notice of a Special Payment (or, in the absence of any
such notice, upon receipt by the Subordination Agent of a Special Payment),
the Subordination Agent shall promptly give notice thereof to each Pass
Through Trustee and the Liquidity Providers. The Subordination Agent shall
promptly calculate the amount of the redemption or purchase of Equipment Trust
Certificates or the amount of any Overdue Scheduled Payment, as the case may
be, comprising such Special Payment under the applicable Indenture or
Indentures and shall promptly send to each Pass Through Trustee a Written
Notice of such amount and the amount allocable to each Pass Through Trust.
Such Written Notice shall also set the distribution date for such Special
Payment (a "Special Distribution Date"), which shall be the first Business Day
which follows the later to occur of (x) the 15th day after the date of such
Written Notice or (y) the date the Subordination Agent receives or expects to
receive such Special Payment. Amounts on deposit in the Special Payments
Account shall be distributed in accordance with Sections 2.4(b) and 2.4(c)
hereof, as applicable.
(b) (i) Redemptions and Purchases of Equipment Trust
Certificates. So long as no Triggering Event shall have occurred (whether or
not continuing), the Subordination Agent shall make distributions pursuant to
this Section 2.4(b) of amounts on deposit in the Special Payments Account on
account of the redemption or purchase (including, without limitation, a
purchase resulting from the sale of the Equipment Trust Certificates permitted
by Article IV hereof) of all of the Equipment Trust Certificates issued
pursuant to an Indenture on the Special Distribution Date for such Special
Payment in the following order of priority:
first, such amount as shall be required to pay (A) all accrued and
unpaid Liquidity Expenses then in arrears plus (B) the product of (x)
the aggregate amount of all accrued and unpaid Liquidity Expenses not in
arrears to such Special Distribution Date multiplied by (y) a fraction,
the numerator of which is the aggregate outstanding principal amount of
Equipment Trust Certificates being redeemed, purchased or prepaid on
such Special Distribution Date and the denominator of which is the
aggregate outstanding principal amount of all Equipment Trust
Certificates, shall be distributed to the Liquidity Providers pari passu
on the basis of the amount of Liquidity Expenses owed to each Liquidity
Provider;
second, such amount as shall be required to pay (A) all accrued
and unpaid interest then in arrears on all Liquidity Obligations plus
(B) the product of (x) the aggregate amount of all accrued and unpaid
interest on all Liquidity Obligations not in arrears to such Special
Distribution Date (at the rate provided in the applicable Liquidity
Facility) multiplied by (y) a fraction, the numerator of which is the
aggregate outstanding principal amount of Equipment Trust Certificates
being redeemed, purchased or prepaid on such Special Distribution Date
and the denominator of which is the aggregate outstanding principal
amount of all Equipment Trust Certificates, shall be distributed to the
Liquidity Providers pari passu on the basis of the amount of such
accrued and unpaid interest owed to each Liquidity Provider;
third, such amount as shall be required (A) to pay or reimburse
the Liquidity Providers in an amount equal to the amount of any
unreimbursed Interest Drawings under the Liquidity Facilities shall be
distributed to the Liquidity Providers or (B) so long as no Liquidity
Event of Default shall have occurred and be continuing, to replenish the
Cash Accounts up to their respective Required Amounts shall be deposited
in the Cash Accounts, in each such case, pari passu on the basis of the
amounts of such unreimbursed Interest Drawings and deficiencies;
fourth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class A Pass Through Certificates on
such Special Distribution Date shall be distributed to the Pass Through
Trustee of the Class A Pass Through Trust;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class B Pass Through Certificates on
such Special Distribution Date shall be distributed to the Pass Through
Trustee of the Class B Pass Through Trust;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of Class C Pass Through Certificates on
such Special Distribution Date shall be distributed to the Pass Through
Trustee of the Class C Pass Through Trust; and
seventh, the balance, if any, of such Special Payment shall be
transferred to the Collection Account for distribution in accordance
with Section 3.2 hereof.
(ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions of amounts on
deposit in the Special Payments Account on account of the redemption or
purchase of all of the Equipment Trust Certificates issued pursuant to an
Indenture on the Special Distribution Date for such Special Payment in
accordance with Section 3.3 hereof.
(c) Other Special Payments. Except as provided in clause (e)
below, any amounts on deposit in the Special Payments Account other than in
respect of amounts to be distributed pursuant to Section 2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with
Article III hereof.
(d) Investment of Amounts in Special Payments Account. Any
amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Section 2.4(b) or (c) shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed
in accordance with Section 2.4(b) or (c), as the case may be.
(e) Certain Payments. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity payment received by it from
the Owner Participant, the Owner Trustee or Federal Express Corporation in
respect of any Pass Through Trustee or any Liquidity Provider (collectively,
the "Payees") and (ii) any compensation (including, without limitation, any
fees payable to any Liquidity Provider under Section 2.03 of any Liquidity
Facility) received by it from the Owner Participant, the Owner Trustee or
Federal Express Corporation under any Operative Agreement in respect of any
Payee, directly to the Payee entitled thereto.
SECTION 2.5 Designated Representatives. (a) With the delivery
of this Agreement, each Pass Through Trustee shall furnish to the
Subordination Agent, and from time to time thereafter may furnish to the
Subordination Agent, at such Pass Through Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency
Certificate") of a Responsible Officer of such Pass Through Trustee certifying
as to the incumbency and specimen signatures of the officers of such Pass
Through Trustee and the attorney-in-fact and agents of such Pass Through
Trustee (the "Trustee Representatives") authorized to give Written Notices on
behalf of such Pass Through Trustee hereunder. Until the Subordination Agent
receives a subsequent Trustee Incumbency Certificate, it shall be entitled to
rely on the last Trustee Incumbency Certificate delivered to it hereunder.
(b) With the delivery of this Agreement, each Liquidity
Provider shall furnish to the Subordination Agent, and from time to time
thereafter may furnish to the Subordination Agent, at such Liquidity
Provider's discretion, or upon the Subordination Agent's request (which
request shall not be made more than one time in any 12-month period), a
certificate (an "LP Incumbency Certificate") of any authorized signatory of
such Liquidity Provider certifying as to the incumbency and specimen
signatures of any officer, attorney-in-fact, agent or other designated
representative of such Liquidity Provider (the "LP Representatives" and,
together with the Trustee Representatives, the "Designated Representatives")
authorized to give Written Notices on behalf of such Liquidity Provider
hereunder. Until the Subordination Agent receives a subsequent LP Incumbency
Certificate, it shall be entitled to rely on the last LP Incumbency
Certificate delivered to it hereunder.
SECTION 2.6 Controlling Party. (a) The Pass Through Trustees
and the Liquidity Providers hereby agree that, with respect to any Indenture
at any given time, the Indenture Trustee thereunder will be directed (i) in
taking, or refraining from taking, any action with respect to such Indenture
or the Equipment Trust Certificates issued thereunder, so long as no Indenture
Event of Default has occurred and is continuing thereunder, by the holders of
at least a majority of the outstanding principal amount of such Equipment
Trust Certificates (provided that, for so long as the Subordination Agent
is the registered holder of the Equipment Trust Certificates, the
Subordination Agent shall act with respect to this clause (i) in accordance
with the directions of the Pass Through Trustees representing holders of
Pass Through Certificates representing an undivided interest in such
principal amount of Equipment Trust Certificates), and (ii) after the
occurrence and during the continuance of an Indenture Event of Default
thereunder (which has not been cured by the applicable Owner Trustee or the
applicable Owner Participant pursuant to Section 8.03 of such Indenture),
in taking, or refraining from taking, any action with respect to such
Indenture or such Equipment Trust Certificates, including exercising
remedies thereunder (including accelerating the Equipment Trust
Certificates issued thereunder or foreclosing the Lien on the Aircraft
securing such Equipment Trust Certificates), by the Controlling Party.
(b) The Person who shall be the "Controlling Party" with
respect to any Indenture shall be: (x) the Pass Through Trustee of the Class
A Pass Through Trust; (y) upon payment of Final Distributions to the holders
of Class A Pass Through Certificates, the Pass Through Trustee of the Class B
Pass Through Trust; and (z) upon payment of Final Distributions to the holders
of Class B Pass Through Certificates, the Pass Through Trustee of the Class C
Pass Through Trust. For purposes of giving effect to the foregoing, the Pass
Through Trustees (other than the Controlling Party) irrevocably agree (and the
Certificateholders (other than the Certificateholders represented by the
Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Trust Certificates, shall exercise its voting rights in respect of the
Equipment Trust Certificates as directed by the Controlling Party and any vote
so exercised shall be binding upon the Pass Through Trustees and all
Certificateholders.
The Subordination Agent shall give written notice to all of the
other parties to this Agreement promptly upon a change in the identity of the
Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.
(c) Notwithstanding the foregoing, the Liquidity Provider with
the then greatest amount of unreimbursed Liquidity Obligations payable to it
under the Liquidity Facilities shall have the right to elect, by Written
Notice to the Subordination Agent and each Pass Through Trustee, to become the
Controlling Party hereunder with respect to any Indenture at any time from and
including the date which is 18 months after the earlier of (i) the
Acceleration of the Equipment Trust Certificates under such Indenture and (ii)
a Final Drawing with respect to the Liquidity Facilities, if, in the case of
clauses (i) and (ii) above, at the time of such election all Liquidity
Obligations owed to such Liquidity Provider under the Liquidity Facilities
have not been paid in full.
(d) The exercise of remedies by the Controlling Party under this
Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.
(e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
AMOUNTS RECEIVED
SECTION 3.1 Written Notice of Distribution. (a) No later than
3:00 P.M. (New York City time) on the Business Day immediately preceding each
Distribution Date (or Special Distribution Date for purposes of Section 2.4(b)
hereof, as the case may be), each of the following Persons shall deliver to
the Subordination Agent a Written Notice setting forth the following
information as at the close of business on such Business Day:
(i) With respect to the Class A Pass Through Certificates, the
Pass Through Trustee of the Class A Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clause "fourth" of
Section 3.2 or Section 2.4(b), as the case may be, hereof;
(ii) With respect to the Class B Pass Through Certificates, the
Pass Through Trustee of the Class B Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clause "fifth" of
Section 3.2 or Section 2.4(b), as the case may be, hereof;
(iii) With respect to the Class C Pass Through Certificates, the
Pass Through Trustee of the Class C Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clause "sixth" of
Section 3.2 or Section 2.4(b), as the case may be, hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second" and "third" of Section 3.2 or
Section 2.4(b), as the case may be, hereof; and
(v) Each Pass Through Trustee shall set forth the amounts to be
paid to it in accordance with clause "seventh" of Section 3.2 hereof.
The notices required under this Section 3.1(a) may be in the form of a
schedule or similar document provided to the Subordination Agent by the
parties referenced therein or by any one of them, which schedule or similar
document may state that, unless there has been a prepayment of the Pass
Through Certificates, such schedule or similar document is to remain in effect
until any substitute notice or amendment shall be given to the Subordination
Agent by the party providing such notice.
(b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent
setting forth for such Person the following information:
(i) With respect to the Class A Pass Through Certificates, the
Pass Through Trustee of the Class A Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clauses "first" and
"fifth" (relating to indemnity payments made by the Class A Pass Through
Certificateholders) and "sixth" of Section 3.3 hereof;
(ii) With respect to the Class B Pass Through Certificates, the
Pass Through Trustee of the Class B Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clauses "first" and
"fifth" (relating to indemnity payments made by the Class B Pass Through
Certificateholders) and "seventh" of Section 3.3 hereof;
(iii) With respect to the Class C Pass Through Certificates, the
Pass Through Trustee of the Class C Pass Through Trust shall separately
set forth the amounts to be paid in accordance with clauses "first" and
"fifth" (relating to indemnity payments made by the Class C Pass Through
Certificateholders) and "eighth" of Section 3.3 hereof;
(iv) With respect to each Liquidity Facility, the Liquidity
Provider thereunder shall separately set forth the amounts to be paid in
accordance with clauses "first", "second" "third" and "fourth" of
Section 3.3 hereof; and
(v) Each Pass Through Trustee shall set forth the amounts to be
paid in accordance with clause "fifth" of Section 3.3 hereof.
(c) At such time as a Pass Through Trustee or a Liquidity
Provider shall have received all amounts owing to it (and, in the case of a
Pass Through Trustee, the Certificateholders for which it is acting) pursuant
to Section 2.4, 3.2 or 3.3 hereof, as applicable, and, in the case of a
Liquidity Provider, its commitment under the related Liquidity Facility shall
have terminated or expired, such Person shall, by a Written Notice, so inform
the Subordination Agent and each other party to this Agreement.
(d) As provided in Section 6.5 hereof, the Subordination Agent
shall be fully protected in relying on any of the information set forth in a
Written Notice provided by the Pass Through Trustee or any Liquidity Provider
pursuant to paragraphs (a) through (c) above and shall have no independent
obligation to verify, calculate or recalculate any amount set forth in any
Written Notice delivered in accordance with such paragraphs.
(e) Any Written Notice delivered by a Pass Through Trustee or a
Liquidity Provider, as applicable, pursuant to Section 3.1(a), 3.1(b) or
3.1(c) hereof, if made prior to 10:00 A.M. (New York City time) shall be
effective on the date delivered (or if delivered later shall be effective as
of the next Business Day). Subject to the terms of this Agreement, the
Subordination Agent shall as promptly as practicable comply with any such
instructions; provided, however, that any transfer of funds pursuant to any
instruction received after 10:00 A.M. (New York City time) on any Business Day
may be made on the next succeeding Business Day.
(f) In the event the Subordination Agent shall not receive from
any Person any information set forth in paragraphs (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such
Person pursuant to Section 3.2 or 3.3 hereof, the Subordination Agent shall
request such information and, failing to receive any such information, the
Subordination Agent shall not make such distribution(s) to such Person. In
such event, the Subordination Agent shall make distributions pursuant to
clauses "first" through "eighth" of Section 3.2 and clauses "first" through
"ninth" of Section 3.3 to the extent it shall have sufficient information to
enable it to make such distributions, and shall continue to hold any funds
remaining, after making such distributions, until the Subordination Agent
shall receive all necessary information to enable it to distribute any funds
so withheld.
(g) On such dates (but not more frequently than monthly) as any
Liquidity Provider or any Pass Through Trustee shall request, the
Subordination Agent shall send to such party a written statement reflecting
all amounts on deposit with the Subordination Agent pursuant to Section 3.1(f)
hereof.
SECTION 3.2 Distribution of Amounts on Deposit in the Collection
Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3, 3.4 and
3.6(b), amounts on deposit in the Collection Account (or, in the case of any
amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date (or,
in the case of any amount described in Section 2.4(c), on the Special
Distribution Date therefor) in the following order of priority and in
accordance with the information provided to the Subordination Agent pursuant
to Section 3.1(a) hereof:
first, such amount as shall be required to pay all accrued and
unpaid Liquidity Expenses owed to each Liquidity Provider shall be
distributed to the Liquidity Providers pari passu on the basis of the
amount of Liquidity Expenses owed to each Liquidity Provider;
second, such amount as shall be required to pay in full the
aggregate amount of interest accrued on all Liquidity Obligations (at
the rate, or in the amount, provided in the applicable Liquidity
Facility) and unpaid shall be distributed to the Liquidity Providers
pari passu on the basis of the amount of such accrued and unpaid
interest owed to each Liquidity Provider;
third, such amount as shall be required (A) to pay or reimburse
the Liquidity Providers in an amount equal to the amount of all
Liquidity Obligations then due (other than amounts payable pursuant to
clause "first" or "second" of this Section 3.2) shall be distributed to
the Liquidity Providers, and (B) if applicable, to replenish the Cash
Accounts up to their respective Required Amounts shall be deposited in
the Cash Accounts, in each such case, pari passu on the basis of the
amounts of such unreimbursed Liquidity Obligations and/or deficiencies;
fourth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class A Pass Through Certificates on
such Distribution Date shall be distributed to the Pass Through Trustee
of the Class A Pass Through Trust;
fifth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class B Pass Through Certificates on
such Distribution Date shall be distributed to the Pass Through Trustee
of the Class B Pass Through Trust;
sixth, such amount as shall be required to pay in full Expected
Distributions to the holders of the Class C Pass Through Certificates on
such Distribution Date shall be distributed to the Pass Through Trustee
of the Class C Pass Through Trust;
seventh, such amount as shall be required to pay in full the
aggregate unpaid amount of fees and expenses payable as of such
Distribution Date to the Subordination Agent and each Pass Through
Trustee pursuant to the terms of this Agreement and the Pass Through
Agreements, as the case may be, shall be distributed to the
Subordination Agent and such Pass Through Trustee; and
eighth, the balance, if any, of any such payment remaining
thereafter shall be held in the Collection Account for later
distribution in accordance with this Article III.
SECTION 3.3 Distribution of Amounts on Deposit Following a
Triggering Event. (a) Except as otherwise provided in Sections 3.1(f) and
3.6(b) hereof, upon the occurrence of a Triggering Event and at all times
thereafter, all funds in the Collection Account or the Special Payments
Account shall be promptly distributed by the Subordination Agent in the
following order of priority:
first, such amount as shall be required to reimburse (i) the
Subordination Agent for any out-of-pocket costs and expenses actually
incurred by it (to the extent not previously reimbursed) in the
protection of, or the realization of the value of, the Equipment Trust
Certificates or any Trust Property, shall be applied by the
Subordination Agent in reimbursement of such costs and expenses, (ii)
each Pass Through Trustee for any amounts of the nature described in
clause (i) above actually incurred by it under the applicable Pass
Through Agreement (to the extent not previously reimbursed), shall be
distributed to such Pass Through Trustee and (iii) any Liquidity
Provider or Certificateholder for payments, if any, made by it to the
Subordination Agent or any Pass Through Trustee in respect of amounts
described in clause (i) above, shall be distributed to such Liquidity
Provider or to the applicable Pass Through Trustee for the account of
such Certificateholder, in each such case, pari passu on the basis of
all amounts described in clauses (i) through (iii) above;
second, such amount remaining as shall be required to pay all
accrued and unpaid Liquidity Expenses shall be distributed to each
Liquidity Provider pari passu on the basis of the amount of Liquidity
Expenses owed to each Liquidity Provider;
third, such amount remaining as shall be required to pay accrued
and unpaid interest on the Liquidity Obligations as provided in the
Liquidity Facilities shall be distributed to each Liquidity Provider
pari passu on the basis of the amount of such accrued and unpaid
interest owed to each Liquidity Provider;
fourth, such amount remaining as shall be required (A) to pay in
full the outstanding amount of all Liquidity Obligations, whether or not
then due (other than amounts payable pursuant to clause "second" or
"third" of this Section 3.3) shall be distributed to each Liquidity
Provider that has not funded a Cash Account in accordance with Section
3.6(c) or 3.6(i) hereof, and/or (B) if applicable, so long as no
Performing Certificate Deficiency exists and no Liquidity Event of
Default has occurred and is continuing, to replenish the Cash Accounts
up to their respective Required Amounts shall be deposited in the Cash
Accounts, in each case, pari passu on the basis of the amount of
Liquidity Obligations owed to each Liquidity Provider and/or such
deficiencies;
fifth, such amount as shall be required to reimburse or pay (i)
the Subordination Agent for any Tax (other than Taxes imposed on
compensation paid hereunder), expense, fee, charge or other loss
incurred by or any other amount payable to the Subordination Agent in
connection with the transactions contemplated hereby (to the extent not
previously reimbursed), shall be applied by the Subordination Agent in
reimbursement of such amount, (ii) each Pass Through Trustee for any Tax
(other than Taxes imposed on compensation paid under the applicable Pass
Through Agreement), expense, fee, charge, loss or any other amount
payable to such Pass Through Trustee under the applicable Pass Through
Agreements (to the extent not previously reimbursed), shall be
distributed to such Pass Through Trustee and (iii) each
Certificateholder for payments, if any, made by it pursuant to Section
5.2 hereof in respect of amounts described in clause (i) above, shall be
distributed to the applicable Pass Through Trustee for the account of
such Certificateholder, in each such case, pari passu on the basis of
all amounts described in clauses (i) through (iii) above;
sixth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class A Pass Through Certificates
shall be distributed to the Pass Through Trustee of the Class A Pass
Through Trust;
seventh, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class B Pass Through Certificates
shall be distributed to the Pass Through Trustee of the Class B Pass
Through Trust;
eighth, such amount remaining as shall be required to pay in full
Adjusted Expected Distributions on the Class C Pass Through Certificates
shall be distributed to the Pass Through Trustee of the Class C Pass
Through Trust; and
ninth, such amount remaining shall be retained in the Collection
Account until the immediately succeeding Distribution Date or, if all
Classes of Certificates shall have been paid in full, shall be
distributed to the Owner Trustee.
SECTION 3.4 Other Payments. Any payments received by the
Subordination Agent for which no provision as to the application thereof is
made in this Agreement shall be distributed by the Subordination Agent in the
order of priority specified in Section 3.3.
SECTION 3.5 Payments to the Pass Through Trustee and the
Liquidity Providers. Any amounts distributed hereunder to any Liquidity
Provider shall be paid to such Liquidity Provider by wire transfer of funds
to the address such Liquidity Provider shall provide to the Subordination
Agent. The Subordination Agent shall provide a Written Notice of any such
transfer to the applicable Liquidity Provider, as the case may be, at the
time of such transfer. Any amounts distributed hereunder by the
Subordination Agent to any Pass Through Trustee which shall not be the same
institution as the Subordination Agent shall be paid to such Pass Through
Trustee by wire transfer of funds at the address such Pass Through Trustee
shall provide to the Subordination Agent.
SECTION 3.6 Liquidity Facilities. (a) Interest Drawings. If on
any Distribution Date, after giving effect to the subordination provisions of
this Agreement, the Subordination Agent shall not have sufficient funds for
the payment of any amounts due and owing in respect of accrued interest on the
Class A Pass Through Certificates or the Class B Pass Through Certificates (at
the Stated Interest Rate for such Class of Pass Through Certificates), then,
prior to 12:00 noon (New York City time) on the Business Day following such
Distribution Date, the Subordination Agent shall request a drawing (each such
drawing, an "Interest Drawing") under the Liquidity Facility with respect to
such Class of Pass Through Certificates in an amount equal to the lesser of
(i) an amount sufficient to pay the amount of such accrued interest (at the
Stated Interest Rate for such Class of Pass Through Certificates) and (ii) the
Available Amount under such Liquidity Facility, and shall pay such amount to
the Pass Through Trustee with respect to such Class of Pass Through
Certificates in payment of such accrued interest.
(b) Application of Interest Drawings. Notwithstanding anything
to the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class A Cash Account, and payable in each case to the Class A Pass Through
Certificateholders, shall be promptly distributed to the Pass Through Trustee
of the Class A Pass Through Trust and (ii) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class B
Liquidity Facility and all amounts withdrawn by the Subordination Agent from
the Class B Cash Account, and payable in each case to the Class B Pass Through
Certificateholders, shall be promptly distributed to the Pass Through Trustee
of the Class B Pass Through Trust.
(c) Downgrade Drawings. If at any time the debt rating of any
Liquidity Provider issued by either Rating Agency is lower than the applicable
Threshold Rating, within 30 days after receiving notice of such downgrading
(but no later than the expiration date of the Liquidity Facility issued by the
downgraded Liquidity Provider (the "Downgraded Facility")), such Liquidity
Provider may arrange, or the Subordination Agent (in consultation with Federal
Express Corporation), may arrange for a Replacement Liquidity Provider to
issue and deliver a Replacement Liquidity Facility to the Subordination Agent.
If a Downgraded Facility has not been replaced in accordance with the terms of
this paragraph, the Subordination Agent shall, on such 30th day (or if such
30th day is not a Business Day, on the next succeeding Business Day) (or, if
earlier, the expiration date of such Downgraded Facility), request a drawing
in accordance with and to the extent permitted by such Downgraded Facility
(such drawing, a "Downgrade Drawing") of all available and undrawn amounts
thereunder. Amounts drawn pursuant to a Downgrade Drawing shall be maintained
and invested as provided in Section 3.6(f) hereof. The Liquidity Provider may
also arrange for a Replacement Liquidity Provider to issue and deliver a
Replacement Liquidity Facility at any time after such Downgrade Drawing so
long as such Downgrade Drawing has not been reimbursed in full to the
Liquidity Provider.
(d) Non-Extension Drawings. If any Liquidity Facility with
respect to any Class of Pass Through Certificates is scheduled to expire on a
date (the "Stated Expiration Date") prior to the date that is 15 days after
the Final Legal Distribution Date for such Class of Pass Through Certificates,
then, no earlier than the 60th day and no later than the 40th day prior to the
then Stated Expiration Date, the Subordination Agent shall request that such
Liquidity Provider extend the Stated Expiration Date for a period of 364 days
after the Stated Expiration Date (unless the obligations of such Liquidity
Provider thereunder are earlier terminated in accordance with such Liquidity
Facility). The Liquidity Provider shall advise the Subordination Agent, no
earlier than 40 days and no later than 25 days prior to such Stated Expiration
Date, whether, in its sole discretion, it agrees to so extend the Stated
Expiration Date. If, on or before such 25th day, such Liquidity Facility
shall not have been so extended or replaced in accordance with Section 3.6(e),
or if the Liquidity Provider fails irrevocably and unconditionally to advise
the Subordination Agent on or before the 25th day prior to the Stated
Expiration Date then in effect that such Stated Expiration Date shall be so
extended, the Subordination Agent shall, on such 25th day (or as soon as
possible thereafter), in accordance with and to the extent permitted by the
terms of the expiring Liquidity Facility (a "Non-Extended Facility"), request
a drawing under such expiring Liquidity Facility (such drawing, a
"Non-Extension Drawing") of all available and undrawn amounts thereunder.
Amounts drawn pursuant to any Non-Extension Drawing shall be maintained and
invested in accordance with Section 3.6(f) hereof.
(e) Issuance of Replacement Liquidity Facility. At any time,
the Subordination Agent may, at its option, in consultation with Federal
Express Corporation, arrange for a Replacement Liquidity Facility to replace
the Liquidity Facility for any Class of Pass Through Certificates; provided
that the initial Liquidity Provider may not be replaced unless there shall
have become due to the initial Liquidity Provider amounts pursuant to Section
3.1, 3.2 or 3.3 of the Liquidity Facilities and the replacement of the initial
Liquidity Provider would reduce or eliminate the obligation to pay such
amounts. In any such consultation, the Subordination Agent shall accept the
recommendations of Federal Express Corporation in the absence of a good faith
reason not to do so. If such Replacement Liquidity Facility is provided at
any time after a Downgrade Drawing or a Non-Extension Drawing has been made,
all funds on deposit in the relevant Cash Account will be returned to the
Liquidity Provider being replaced. No such Replacement Liquidity Facility
executed in connection therewith shall become effective and no such
Replacement Liquidity Facility shall be deemed a "Liquidity Facility" under
the Operative Agreements, unless and until (i) the conditions referred to in
the immediately following paragraph shall have been satisfied and (ii) if such
Replacement Liquidity Facility shall materially adversely affect the rights,
remedies, interests or obligations of the Class A Pass Through
Certificateholders or the Class B Pass Through Certificateholders under any of
the Operative Agreements, the applicable Pass Through Trustee shall have
consented, in writing, to the execution and issuance of such Replacement
Liquidity Facility.
In connection with the issuance of each Replacement Liquidity
Facility, the Subordination Agent shall (x) prior to the issuance of such
Replacement Liquidity Facility, obtain written confirmation from each Rating
Agency that such Replacement Liquidity Facility will not cause a reduction of
the rating then in effect for any Class of Pass Through Certificates by such
Rating Agency (without regard to the ratings of any Liquidity Provider being
replaced pursuant to Section 3.6(c) hereof), (y) pay all Liquidity Obligations
then owing to the replaced Liquidity Provider (which payment shall be made
first from available funds in the Cash Account as described in clause (vii) of
Section 3.6(f) hereof and thereafter from any other available source,
including, without limitation, a drawing under the Replacement Liquidity
Facility, it being understood that no Replacement Liquidity Facility shall
become effective (other than insofar as necessary to permit the repayment of
amounts owed to the replaced Liquidity Provider) until all amounts owed to the
replaced Liquidity Provider have been paid) and (z) cause the issuer of the
Replacement Liquidity Facility to deliver the Replacement Liquidity Facility
to the Subordination Agent, together with a legal opinion opining that such
Replacement Liquidity Facility is an enforceable obligation of such
Replacement Liquidity Provider. Upon satisfaction of the conditions set forth
in this Section 3.6(e), (i) the replaced Liquidity Facility shall terminate
and (ii) such Replacement Liquidity Provider shall be deemed to be a Liquidity
Provider with the rights and obligations of a Liquidity Provider hereunder and
under the other Operative Agreements and such Replacement Liquidity Facility
shall be deemed to be a Liquidity Facility hereunder and under the other
Operative Agreements.
(f) Cash Accounts; Withdrawals; Investments. In the event the
Subordination Agent shall draw all available amounts under the Class A
Liquidity Facility or the Class B Liquidity Facility pursuant to Section
3.6(c) or a Final Drawing shall be made as provided in the Liquidity Facility,
amounts so drawn shall be deposited by the Subordination Agent in the Class A
Cash Account or the Class B Cash Account, respectively. Amounts so deposited
shall be invested in Specified Investments in accordance with Section 2.2(b)
hereof. Investment Earnings on amounts on deposit in the Cash Accounts as a
result of any drawings under Section 3.6(c) hereof (other than to the extent
such drawing becomes a Final Drawing) shall be paid to the respective
Liquidity Provider entitled thereto prior to giving effect to the
distributions below on each Distribution Date commencing on the first
Distribution Date after any such drawing. Investment Earnings on amounts on
deposit in the Cash Accounts as a result of any drawings under Section 3.6(i)
hereof (and amounts which become a Final Drawing) shall be deposited in the
Collection Account. The Subordination Agent shall deliver a written statement
to the recipient Liquidity Provider one day prior to each Distribution Date
setting forth the aggregate amount of Investment Earnings held in the Cash
Accounts as of such date. In addition, from and after the date funds are so
deposited, the Subordination Agent shall make withdrawals from such account as
follows:
(i) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class A Pass Through Certificates (at the Stated
Interest Rate for the Class A Pass Through Certificates) from any other
source, withdraw from the Class A Cash Account, and pay to the Pass
Through Trustee of the Class A Pass Through Trust an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at
the Stated Interest Rate for the Class A Pass Through Certificates) on
such Class A Pass Through Certificates and (y) the amount on deposit in
the Class A Cash Account;
(ii) on each Distribution Date, the Subordination Agent shall, to
the extent it shall not have received funds to pay accrued and unpaid
interest on the Class B Pass Through Certificates (at the Stated
Interest Rate for the Class B Pass Through Certificates) from any other
source, withdraw from the Class B Cash Account, and pay to the Pass
Through Trustee of the Class B Pass Through Trust an amount equal to the
lesser of (x) an amount necessary to pay accrued and unpaid interest (at
the Stated Interest Rate for the Class B Pass Through Certificates) on
such Class B Pass Through Certificates and (y) the amount on deposit in
the Class B Cash Account;
(iii) on each date on which the Pool Balance of the Class A Pass
Through Trust shall have been reduced by payments made to the Class A
Pass Through Certificateholders pursuant to Section 2.4, 3.2 or 3.3
hereof, the Subordination Agent shall withdraw from the Class A Cash
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class A
Cash Account on such date), the Required Amount (with respect to the
Class A Liquidity Facility) will be on deposit in the Class A Cash
Account and shall first, pay such amount to the Class A Liquidity
Provider until the Liquidity Obligations (with respect to the Class A
Pass Through Certificates) shall have been paid in full, and second,
deposit any remaining amount in the Collection Account;
(iv) on each date on which the Pool Balance of the Class B Pass
Through Trust shall have been reduced by payments made to the Class B
Pass Through Certificateholders pursuant to Section 2.4, 3.2 or 3.3
hereof, the Subordination Agent shall withdraw from the Class B Cash
Account such amount as is necessary so that, after giving effect to the
reduction of the Pool Balance on such date (including any such reduction
resulting from a prior withdrawal of amounts on deposit in the Class B
Cash Account on such date), the Required Amount (with respect to the
Class B Liquidity Facility) will be on deposit in the Class B Cash
Account and shall first, pay such amount to the Class B Liquidity
Provider until the Liquidity Obligations (with respect to the Class B
Pass Through Certificates) shall have been paid in full, and second,
deposit any remaining amount in the Collection Account;
(v) if a Replacement Liquidity Facility for any Class of Pass
Through Certificates shall be delivered to the Subordination Agent
following the date on which funds have been deposited into the Cash
Account for such Class of Pass Through Certificates, the Subordination
Agent shall withdraw all amounts on deposit in such Cash Account and
shall pay such amounts to the replaced Liquidity Provider until all
Liquidity Obligations owed to such Person shall have been paid in full,
and shall deposit any remaining amount in the Collection Account; and
(vi) following the payment of Final Distributions with respect
to any Class of Pass Through Certificates, on the date on which the
Subordination Agent shall have been notified by the Liquidity Provider
for such Class of Pass Through Certificates that the Liquidity
Obligations owed to such Liquidity Provider have been paid in full, the
Subordination Agent shall withdraw all amounts on deposit in the Cash
Account in respect of such Class of Pass Through Certificates and shall
deposit such amount in the Collection Account.
(g) Reinstatement. With respect to any Interest Drawing under
the Liquidity Facility for any Pass Through Trust, upon the reimbursement of
the applicable Liquidity Provider for all or any part of the amount of such
Interest Drawing, together with any accrued interest thereon, the Available
Amount of such Liquidity Facility shall be reinstated by an amount equal to
the amount so reimbursed to the applicable Liquidity Provider but not to
exceed the Required Amount for such Liquidity Facility; provided, however,
that such Liquidity Facility shall not be so reinstated in part or in full at
any time if (x) both (i) a Triggering Event shall have occurred and (ii) a
Performing Certificate Deficiency exists or (y) a Liquidity Event of Default
shall have occurred and be continuing under such Liquidity Facility. In the
event that at any time prior to both the occurrence of a Triggering Event and
the existence of a Performing Certificate Deficiency funds are withdrawn from
any Cash Account pursuant to clauses (i), (ii) or (iii) of Section 3.6(f)
hereof, then funds received by the Subordination Agent prior to both the
occurrence of a Triggering Event and the existence of a Performing Certificate
Deficiency shall be deposited in such Cash Account as provided in clause
"third" of Section 2.4(b), clause "third" of Section 3.2 or clause "fourth" of
Section 3.3, as applicable, and applied in accordance with Section 3.6(f)
hereof.
(h) Reimbursement. The amount of each drawing under the
Liquidity Facilities shall be due and payable, together with interest thereon,
on the dates and at the rates, respectively, provided in the Liquidity
Facilities.
(i) Final Drawing. If any action is required under a Liquidity
Facility to be taken by the Subordination Agent in order to make a Final
Drawing thereunder, the Subordination Agent shall not fail to take such
action. Upon receipt of the proceeds of a Final Drawing under the related
Liquidity Facility, the Subordination Agent shall maintain and invest such
proceeds in accordance with Section 3.6(f) hereof.
(j) Reduction of Stated Amount. Promptly following each date
on which the Required Amount of the Liquidity Facility for a Class of Pass
Through Certificates is reduced as a result of a distribution to the
Certificateholders of such Class of Pass Through Certificates, the
Subordination Agent shall, if such Liquidity Facility provides for reductions
of the Stated Amount of such Liquidity Facility and if such reductions are not
automatic, request the Liquidity Provider for such Class of Pass Through
Certificates to reduce such Stated Amount to an amount equal to the Required
Amount with respect to such Liquidity Facility (as calculated by the
Subordination Agent after giving effect to such payment). Each such request
shall be made in accordance with the provisions of the applicable Liquidity
Facility.
(k) Relation to Subordination Provisions. Interest Drawings
under the Liquidity Facilities and withdrawals from the Cash Accounts, in each
case, in respect of interest on the Pass Through Certificates of any Class,
will be distributed to the Pass Through Trustee for such Class of Pass Through
Certificates, notwithstanding Sections 3.2, 3.3 and 3.6(h) hereof.
ARTICLE IV
EXERCISE OF REMEDIES
SECTION 4.1 Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Event of
Default under any Indenture, the Controlling Party shall direct the Indenture
Trustee under such Indenture in the exercise of remedies available to the
holders of the Equipment Trust Certificates issued pursuant to such Indenture,
including, without limitation, the ability to vote all such Equipment Trust
Certificates in favor of declaring all of the unpaid principal amount of such
Equipment Trust Certificates and accrued interest thereon to be due and
payable under, and in accordance with, the provisions of such Indenture.
Subject to the Owner Trustees' and the Owner Participants' rights set forth in
the Indentures to purchase the Equipment Trust Certificates, if the Equipment
Trust Certificates issued pursuant to any Indenture have been Accelerated
following an Indenture Event of Default with respect thereto, the Controlling
Party may sell, assign, contract to sell or otherwise dispose of and deliver
all (but not less than all) of such Equipment Trust Certificates to any Person
at public or private sale, at any location at the option of the Controlling
Party, all upon such terms and conditions as it may reasonably deem advisable
in accordance with applicable law.
(ii) Subject to the Owner Trustees' and the Owner Participants'
rights set forth in the Indentures to purchase the Equipment Trust
Certificates, and notwithstanding the foregoing, so long as any Pass Through
Certificates remain Outstanding, during the period ending on the date which is
nine months after the earlier of (x) the Acceleration of the Equipment Trust
Certificates issued pursuant to any Indenture or (y) the occurrence of a
Federal Express Corporation Bankruptcy Event, without the consent of the Pass
Through Trustee, (A) no Aircraft subject to the Lien of such Indenture or such
Equipment Trust Certificates may be sold if the net proceeds from such sale
would be less than the Minimum Sale Price for such Aircraft or such Equipment
Trust Certificates and (B) the amount and payment dates of rentals payable by
Federal Express Corporation under the Lease for such Aircraft may not be
adjusted if, as a result of such adjustment, the discounted present value of
all such rentals would be less than 75% of the discounted present value of the
rentals payable by Federal Express Corporation under such Lease before giving
effect to such adjustment, in each case, using the weighted average interest
rate of the Equipment Trust Certificates issued pursuant to such Indenture as
the discount rate.
(iii) At the request of the Controlling Party, the Subordination
Agent may from time to time during the continuance of an Indenture Event of
Default (and before the occurrence of a Triggering Event) commission LTV
Appraisals with respect to the related Aircraft.
(iv) After a Triggering Event occurs and any Equipment Trust
Certificates becomes a Non-Performing Equipment Trust Certificates, the
Subordination Agent shall obtain LTV Appraisals for the Aircraft as soon as
practicable and additional LTV Appraisals on or prior to each anniversary of
the date of such initial LTV Appraisals; provided that, if the Controlling
Party reasonably objects to the appraised value of the Aircraft shown in any
such LTV Appraisals, the Controlling Party shall have the right to obtain or
cause to be obtained substitute LTV Appraisals (including any LTV Appraisals
based upon physical inspection of the Aircraft).
(b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of
such Aircraft or Equipment Trust Certificates. In addition, in lieu of any
sale, assignment, contract to sell or other disposition, the Subordination
Agent, on behalf of the Controlling Party, may maintain possession of such
Equipment Trust Certificates and continue to apply monies received in respect
of such Equipment Trust Certificates in accordance with Article III hereof.
In addition, in lieu of such sale, assignment, contract to sell or other
disposition, or in lieu of such maintenance of possession, the Controlling
Party may instruct the Indenture Trustee under such Indenture to foreclose on
the Lien on the related Aircraft or to take any other remedial action
permitted under such Indenture or applicable law.
SECTION 4.2 Remedies Cumulative. Each and every right, power and
remedy given to the Pass Through Trustees, the Controlling Party or the
Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may, subject always to the terms and
conditions hereof, be exercised from time to time and as often and in such
order as may be deemed expedient by any Pass Through Trustee, the Controlling
Party or the Subordination Agent, as appropriate, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be
a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by any Pass Through Trustee, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.
SECTION 4.3 Discontinuance of Proceedings. In case any party to
this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such
case each such party shall, subject to any determination in such proceedings,
be restored to its former position and rights hereunder, and all rights,
remedies and powers of such party shall continue as if no such Proceeding had
been instituted.
SECTION 4.4 Right of Certificateholders and Liquidity Providers
to Receive Payments Not to Be Impaired. Anything in this Agreement to the
contrary notwithstanding but subject to each Pass Through Agreement, the right
of any Certificateholder or any Liquidity Provider, respectively, to receive
payments pursuant to Section 2.4, 3.2 or 3.3 hereof when due, or to institute
suit for the enforcement of any such payment on or after the applicable
Distribution Date, shall not be impaired or affected without the consent of
such Certificateholder or such Liquidity Provider, respectively.
SECTION 4.5 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Agreement or in any suit against
any Controlling Party or the Subordination Agent for any action taken or
omitted by it as Controlling Party or Subordination Agent, as the case may be,
a court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
The provisions of this Section do not apply to a suit instituted by the
Subordination Agent, a Liquidity Provider or a Pass Through Trustee or a suit
by Certificateholders holding more than 10% of the original principal amount
of any Class of Pass Through Certificates.
ARTICLE V
DUTIES OF THE SUBORDINATION AGENT;
AGREEMENTS OF THE PASS THROUGH TRUSTEE, ETC.
SECTION 5.1 Notice of Indenture Event of Default or Triggering
Event. (a) In the event the Subordination Agent shall have actual knowledge
of the occurrence of an Indenture Event of Default or a Triggering Event, as
promptly as practicable, and in any event within 10 days after obtaining
knowledge thereof, the Subordination Agent shall transmit by mail to the
Rating Agencies, the Liquidity Providers and the Pass Through Trustees notice
of such Indenture Event of Default or Triggering Event, unless such Indenture
Event of Default or Triggering Event shall have been cured or waived. For all
purposes of this Agreement, in the absence of actual knowledge on the part of
a Responsible Officer, the Subordination Agent shall not be deemed to have
knowledge of any Indenture Event of Default or Triggering Event unless
notified in writing by one or more Pass Through Trustees, one or more
Liquidity Providers or one or more Certificateholders.
(b) Other Notices. The Subordination Agent will furnish to each
Liquidity Provider and each Pass Through Trustee, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Subordination Agent as registered holder of the Equipment Trust Certificates
or otherwise in its capacity as Subordination Agent to the extent the same
shall not have been otherwise directly distributed to such Liquidity Provider
or such Pass Through Trustee, as applicable, pursuant to the express provision
of any other Operative Agreement.
SECTION 5.2 Indemnification. The Subordination Agent shall not
be required to take any action or refrain from taking any action under Section
5.1 (other than the first sentence thereof) or Article IV hereof unless the
Subordination Agent shall have been indemnified (to the extent and in the
manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under
any obligation to take any action under this Agreement and nothing
contained in this Agreement shall require the Subordination Agent 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. The Subordination Agent shall
not be required to take any action under Section 5.1 (other than the first
sentence thereof) or Article IV hereof, nor shall any other provision of
this Agreement be deemed to impose a duty on the Subordination Agent to
take any action, if the Subordination Agent shall have been advised by
counsel that such action is contrary to the terms hereof or is otherwise
contrary to law.
SECTION 5.3 No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to
take or refrain from taking any action under, or in connection with, this
Agreement, except as expressly provided by the terms of this Agreement; and no
implied duties or obligations shall be read into this Agreement against the
Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or expense under Section 7.1 hereof)
promptly take such action as may be necessary to duly discharge all Liens on
any of the Trust Accounts or any monies deposited therein which result from
claims against it in its individual capacity not related to its activities
hereunder or any other Operative Agreement.
SECTION 5.4 Notice from the Liquidity Providers and the Pass
Through Trustee. If a Responsible Officer of any Liquidity Provider or any
Pass Through Trustee has notice of an Indenture Event of Default or a
Triggering Event, such Person shall promptly give notice thereof to all other
Liquidity Providers and Pass Through Trustees and to the Subordination Agent,
provided, however, that no such Person shall have any liability hereunder as a
result of its failure to deliver any such notice.
ARTICLE VI
THE SUBORDINATION AGENT
SECTION 6.1 Authorization, Acceptance of Trusts and Duties. Each
Pass Through Trustee for the Class A and Class B Pass Through Trusts hereby
designates and appoints the Subordination Agent as the agent and trustee of
such Pass Through Trustee under the applicable Liquidity Facility and
authorizes the Subordination Agent to enter into the applicable Liquidity
Facility as agent and trustee for such Pass Through Trustee. Each of the
Liquidity Providers and the Pass Through Trustees hereby designates and
appoints the Subordination Agent as the Subordination Agent under this
Agreement. First Security Bank, National Association, hereby accepts the
duties hereby created and applicable to it as the Subordination Agent and
agrees to perform the same but only upon the terms of this Agreement and
agrees to receive and disburse all monies received by it in accordance with
the terms hereof. The Subordination Agent shall not be answerable or
accountable under any circumstances, except (a) for its own willful misconduct
or negligence, (b) as provided in Section 2.2 hereof and (c) for liabilities
that may result from the inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative
Agreement. The Subordination Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Subordination
Agent, unless it is proved that the Subordination Agent was negligent in
ascertaining the pertinent facts.
SECTION 6.2 Absence of Duties. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.
SECTION 6.3 No Representations or Warranties as to Documents.
The Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity,
legality or enforceability of this Agreement or any other Operative Agreement
or as to the correctness of any statement contained in any thereof, except for
the representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party.
The Certificateholders, the Pass Through Trustees and the Liquidity Providers
make no representation or warranty hereunder whatsoever.
SECTION 6.4 No Segregation of Monies; No Interest. Any monies
paid to or retained by the Subordination Agent pursuant to any provision
hereof and not then required to be distributed to any Pass Through Trustee or
any Liquidity Provider as provided in Articles II and III hereof need not be
segregated in any manner except to the extent required by such Articles II and
III and by law, and the Subordination Agent shall not (except as otherwise
provided in Section 2.2 hereof) be liable for any interest thereon; provided,
however, that any payments received or applied hereunder by the Subordination
Agent shall be accounted for by the Subordination Agent so that any portion
thereof paid or applied pursuant hereto shall be identifiable as to the source
thereof.
SECTION 6.5 Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
As to the Pool Balance of any Pass Through Trust as of any date, the
Subordination Agent may for all purposes hereof rely on a certificate signed
by any Responsible Officer of the applicable Pass Through Trustee, and such
certificate shall constitute full protection to the Subordination Agent for
any action taken or omitted to be taken by it in good faith in reliance
thereon. As to any fact or matter relating to the Liquidity Providers or the
Pass Through Trustees the manner of ascertainment of which is not specifically
described herein, the Subordination Agent may for all purposes hereof rely on
a certificate, signed by any Responsible Officer of the applicable Liquidity
Provider or Pass Through Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. The Subordination Agent shall assume, and shall be
fully protected in assuming, that each of the Liquidity Providers and each of
the Pass Through Trustees are authorized to enter into this Agreement and to
take all action to be taken by them pursuant to the provisions hereof, and
shall not inquire into the authorization of each of the Liquidity Providers
and the Pass Through Trustee with respect thereto. In the administration of
the trusts hereunder, the Subordination Agent may execute any of the trusts or
powers hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may consult with counsel, accountants and other
skilled persons to be selected and retained by it, and the Subordination Agent
shall not be liable for the acts or omissions of any agent appointed with due
care or for anything done, suffered or omitted in good faith by it in
accordance with the advice or written opinion of any such counsel, accountants
or other skilled persons.
SECTION 6.6 Capacity in Which Acting. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.
SECTION 6.7 Compensation. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements, for
all services rendered hereunder and shall have a priority claim to the extent
set forth in Article III hereof on all monies collected hereunder for the
payment of such compensation, to the extent that such compensation shall not
be paid by others. The Subordination Agent agrees that it shall have no right
against any Pass Through Trustee or Liquidity Provider for any fee as
compensation for its services as agent under this Agreement. The provisions
of this Section 6.7 shall survive the termination of this Agreement.
SECTION 6.8 May Become Certificateholder. The institution acting
as Subordination Agent hereunder may become a Certificateholder and have all
rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.
SECTION 6.9 Subordination Agent Required; Eligibility. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America or of any State thereof or of the District of Columbia having a
combined capital and surplus of at least $100,000,000 (or the obligations of
which, whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized and doing business under
the laws of the United States, any State thereof or of the District of
Columbia and having a combined capital and surplus of at least $100,000,000),
if there is such an institution willing and able to perform the duties of the
Subordination Agent hereunder upon reasonable or customary terms. Such
corporation shall be a citizen of the United States and shall be authorized
under the laws of the United States or any State thereof or of the District of
Columbia to exercise corporate trust powers and shall be subject to
supervision or examination by federal, state or District of Columbia
authorities. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of any of the aforesaid
supervising or examining authorities, then, for the purposes of this Section
6.9, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published.
In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.
SECTION 6.10 Money to Be Held in Trust. All Equipment Trust
Certificates, monies and other property deposited with or held by the
Subordination Agent pursuant to this Agreement shall be held in trust for the
benefit of the parties entitled to such Equipment Trust Certificates, monies
and other property. All such Equipment Trust Certificates, monies or other
property shall be held in the Trust Department of the institution acting as
Subordination Agent hereunder.
ARTICLE VII
INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1 Scope of Indemnification. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Articles 8 and 9 of the Participation Agreements. The indemnities contained
in such Articles 8 and 9 shall survive the termination of this Agreement.
ARTICLE VIII
SUCCESSOR SUBORDINATION AGENT
SECTION 8.1 Replacement of Subordination Agent; Appointment of
Successor. The Subordination Agent may resign at any time by so notifying the
Pass Through Trustees and the Liquidity Providers. The Liquidity Provider or
the Controlling Party (or, prior to the occurrence of a Triggering Event, the
Person who would be the Controlling Party if a Triggering Event had occurred)
may remove the Subordination Agent for cause by so notifying the Subordination
Agent and may appoint a successor Subordination Agent. The Controlling Party
(or, prior to the occurrence of a Triggering Event, the Person who would be
the Controlling Party if a Triggering Event had occurred) shall remove the
Subordination Agent if:
(1) the Subordination Agent fails to comply with Section 6.9
hereof;
(2) the Subordination Agent is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Subordination Agent or its property; or
(4) the Subordination Agent otherwise becomes incapable of
acting.
If the Subordination Agent resigns or is removed or if a vacancy
exists in the office of Subordination Agent for any reason (the Subordination
Agent in such event being referred to herein as the retiring Subordination
Agent), the Controlling Party (or, prior to the occurrence of a Triggering
Event, the Person who would be the Controlling Party if a Triggering Event had
occurred), in consultation with Federal Express Corporation, shall promptly
appoint a successor Subordination Agent.
Any corporation into which the Subordination Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Subordination Agent shall be a party, or any corporation to which
substantially all the corporate trust business of the Subordination Agent
may be transferred, shall, subject to the terms of Section 6.9 hereof, be
the Subordination Agent hereunder and under the other Operative Agreements
to which the Subordination Agent is a party without further act, except
that such Person shall give prompt subsequent notice of such transaction to
the Liquidity Provider and each Pass Through Trustee.
A successor Subordination Agent shall deliver a written acceptance
of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent, upon which the resignation or removal of the retiring
Subordination Agent shall become effective, and the successor Subordination
Agent shall have all the rights, powers and duties of the Subordination Agent
under this Agreement. The successor Subordination Agent shall send a written
notice of its succession to the Liquidity Providers and the Pass Through
Trustees. The retiring Subordination Agent shall promptly transfer its rights
under each of the Liquidity Facilities and all of the property held by it as
Subordination Agent to the successor Subordination Agent.
If a successor Subordination Agent does not take office within 60
days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or either one or more of the Pass Through
Trustees or Federal Express Corporation may petition any court of competent
jurisdiction for the appointment of a successor Subordination Agent.
If the Subordination Agent fails to comply with Section 6.9 hereof
(to the extent applicable), one or more of the Pass Through Trustees, one or
more of the Liquidity Providers or Federal Express Corporation may petition
any court of competent jurisdiction for the removal of the Subordination Agent
and the appointment of a successor Subordination Agent.
Notwithstanding the foregoing, no resignation or removal of the
Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be
effective unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS
SECTION 9.1 Amendments, Waivers, Etc. (a) This Agreement may
not be supplemented, amended or modified without the consent of each Pass
Through Trustee (acting with the consent of holders of Pass Through
Certificates of the related Class evidencing interests in the related Pass
Through Trust aggregating not less than a majority in interest in such Trust),
the Subordination Agent and each Liquidity Provider; provided, however, that
this Agreement may be supplemented, amended or modified without the consent of
any Pass Through Trustee (i) if such supplement or amendment cures an
ambiguity or inconsistency or does not materially adversely affect such Pass
Through Trustee or the holders of the related Class of Pass Through
Certificates or (ii) to provide for a Non-Extension Drawing under a
Replacement Liquidity Facility which is scheduled to expire prior to the date
which is 15 days after the Final Legal Distribution Date and for the deposit
of such Non-Extension Drawing in the Class A Cash Account provided, in the
case of this clause (ii), that the Subordination Agent shall have received a
Ratings Confirmation after giving effect to such amendment or modification.
Notwithstanding the foregoing, without the consent of each Certificateholder
and each Liquidity Provider, no supplement, amendment or modification of this
Agreement may (i) reduce the percentage of the interest in any Pass Through
Trust evidenced by the Pass Through Certificates issued by such Pass Through
Trust necessary to consent to modify or amend any provision of this Agreement
or to waive compliance therewith or (ii) modify Section 2.4, 3.2 or 3.3
hereof, relating to the distribution of monies received by the Subordination
Agent hereunder from the Equipment Trust Certificates or pursuant to the
Liquidity Facilities. Nothing contained in this Section shall require the
consent of a Pass Through Trustee at any time following the payment of Final
Distributions with respect to the related Class of Pass Through Certificates.
(b) In the event that the Subordination Agent, as the registered
holder of any Equipment Trust Certificates, receives a request for its consent
to any amendment, modification or waiver under such Equipment Trust
Certificates, the Indenture pursuant to which such Equipment Trust
Certificates were issued, or the Lease, Participation Agreement or other
related document, (i) if no Indenture Event of Default shall have occurred and
be continuing, the Subordination Agent shall request instructions with respect
to each Series of Equipment Trust Certificates from the Pass Through Trustee
of the Pass Through Trust which holds such Equipment Trust Certificates and
shall vote or consent in accordance with the instructions of such Pass Through
Trustee and (ii) if any Indenture Event of Default (which has not been cured
by the applicable Owner Trustee or the applicable Owner Participant pursuant
to Section 4.03 of such Indenture) shall have occurred and be continuing with
respect to such Indenture, the Subordination Agent will exercise its voting
rights as directed by the Controlling Party; provided that no such amendment,
modification or waiver shall, without the consent of each Liquidity Provider,
reduce the amount of rent, supplemental rent or stipulated loss values payable
by Federal Express Corporation under the Lease; and provided further that no
amendment of or supplement to any Indenture, any Lease or any Participation
Agreement or waiver or modification of the terms of, or consent under, any
thereof, shall, without the consent of each Liquidity Provider, have any of
the effects listed in the provisos to Section 7.11 or 13.02 or Section 8.01(c)
of the Indenture.
SECTION 9.2 Subordination Agent Protected. If, in the reasonable
opinion of the institution acting as the Subordination Agent hereunder, any
document required to be executed pursuant to the terms of Section 9.1 affects
any right, duty, immunity or indemnity with respect to it under this Agreement
or any Liquidity Facility, the Subordination Agent may in its discretion
decline to execute such document.
SECTION 9.3 Effect of Supplemental Agreements. Upon the
execution of any amendment or supplement hereto pursuant to the provisions
hereof, this Agreement shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Agreement of the parties
hereto and beneficiaries hereof shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
agreement shall be and be deemed to be part of the terms and conditions of
this Agreement for any and all purposes. In executing or accepting any
supplemental agreement permitted by this Article IX, the Subordination
Agent shall be entitled to receive, and shall be fully protected in relying
upon, an opinion of counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement.
SECTION 9.4 Notice to Rating Agencies. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Termination of Intercreditor Agreement. Following
payment of Final Distributions with respect to each Class of Pass Through
Certificates and the payment in full of all Liquidity Obligations to the
Liquidity Providers and provided that there shall then be no other amounts due
to the Certificateholders, the Pass Through Trustees, the Liquidity Providers
and the Subordination Agent hereunder or under the Pass Through Agreements,
and that the commitment of the Liquidity Providers under the Liquidity
Facilities shall have expired or been terminated, this Agreement and the
trusts created hereby shall terminate and this Agreement shall be of no
further force or effect. Except as aforesaid or otherwise provided, this
Agreement and the trusts created hereby shall continue in full force and
effect in accordance with the terms hereof.
SECTION 10.2 Intercreditor Agreement for Benefit of the Pass
Through Trustees, Liquidity Providers and Subordination Agent. Nothing in
this Agreement, whether express or implied, shall be construed to give to any
Person other than the Pass Through Trustees, the Liquidity Providers and the
Subordination Agent any legal or equitable right, remedy or claim under or in
respect of this Agreement.
SECTION 10.3 Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid or by Federal Express Corporation courier
service, or by confirmed telecopy and
(i) if to the Subordination Agent, addressed to at its office at:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Attention: Corporate Trust Services
(ii) if to any Pass Through Trustee, addressed to it at its
office at:
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Attention: Corporate Trust Services
(iii) if to any Liquidity Provider, addressed to it at its office
at:
Kredietbank N.V.
New York Branch
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Manager
Telecopy: (000) 000-0000
Whenever any notice in writing is required to be given by any Pass Through
Trustee or Liquidity Provider or the Subordination Agent to any of the other
of them, such notice shall be deemed given and such requirement satisfied when
such notice is received, if such notice is mailed by certified mail, postage
prepaid or by Federal Express Corporation courier service or is sent by
confirmed telecopy addressed as provided above. Any party hereto may change
the address to which notices to such party will be sent by giving notice of
such change to the other parties to this Agreement.
SECTION 10.4 Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 10.5 No Oral Modifications or Continuing Waivers. No
terms or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall
be effective only in the specific instance and for the specific purpose given.
SECTION 10.6 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the parties hereto and the successors and assigns of each, all as herein
provided.
SECTION 10.7 Headings. The headings of the various Articles and
Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.
SECTION 10.8 Counterpart Form. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 10.9 Subordination. (a) As between the Liquidity
Providers, on the one hand, and the Pass Through Trustees and the
Certificateholders, on the other hand, this Agreement shall be a subordination
agreement for purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as
amended from time to time.
(b) Notwithstanding the provisions of this Agreement, if prior
to the payment in full to the Liquidity Providers of all Liquidity Obligations
then due and payable, any party hereto shall have received any payment or
distribution in respect of Equipment Trust Certificates or any other amount
under the Indentures or other Operative Agreements which, had the
subordination provisions of this Agreement been properly applied to such
payment, distribution or other amount, would not have been distributed to such
Person, then such payment, distribution or other amount shall be received and
held in trust by such Person and paid over or delivered to the Subordination
Agent for application as provided herein.
(c) If any Pass Through Trustee, any Liquidity Provider or the
Subordination Agent receives any payment in respect of any obligations owing
hereunder (or, in the case of the Liquidity Providers, in respect of the
Liquidity Obligations), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations (or, in the
case of the Liquidity Providers, such Liquidity Obligations) intended to be
satisfied shall be revived and continue in full force and effect as if such
payment had not been received.
(d) The Pass Through Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers and the Subordination Agent
confirm that the payment priorities specified in Sections 2.4, 3.2 and 3.3
shall apply in all circumstances, notwithstanding the fact that the
obligations owed to the Pass Through Trustees and the holders of Certificates
are secured by certain assets and the Liquidity Obligations are not so
secured. The Pass Through Trustees expressly agree (on behalf of themselves
and the holders of Certificates) not to assert priority over the holders of
Liquidity Obligations due to their status as secured creditors in any
bankruptcy, insolvency or other legal proceeding.
(e) Each of the Pass Through Trustees (on behalf of itself and
the holders of Certificates), the Liquidity Providers and the Subordination
Agent may take any of the following actions without impairing its rights under
this Agreement:
(i) obtain a lien on any property to secure any amounts owing to
it hereunder, including, in the case of the Liquidity Providers, the
Liquidity Obligations;
(ii) obtain the primary or secondary obligation of any other
obligor with respect to any amounts owing to it hereunder, including, in
the case of the Liquidity Providers, any of the Liquidity Obligations;
(iii) renew, extend, increase, alter or exchange any amounts owing
to it hereunder, including, in the case of the Liquidity Providers, any
of the Liquidity Obligations, or release or compromise any obligation of
any obligor with respect thereto;
(iv) refrain from exercising any right or remedy, or delay in
exercising such right or remedy, which it may have; or
(v) take any other action which might discharge a subordinated
party or a surety under applicable law;
provided, however, that the taking of any such actions by any of the Pass
Through Trustees, the Liquidity Providers or the Subordination Agent shall not
prejudice the rights or adversely affect the obligations of any other party
under this Agreement.
SECTION 10.10 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 10.11 Submission to Jurisdiction; Waiver of Jury Trial;
Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceedings may be brought
in such courts, and waives any objection that it may now or hereafter
have that the venue of any such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form and mail), postage
prepaid, to each party hereto at its address set forth in Section 10.3
hereof, or at such other address of which the other parties shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each of
the parties warrants and represents that it has reviewed this waiver with its
legal counsel, and that it knowingly and voluntarily waives its jury trial
rights following consultation with such legal counsel. THIS WAIVER IS
IRREVOCABLE, AND CANNOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
(c) The Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States or of any State
and waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgement entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized, as
of the day and year first above written, and acknowledge that this Agreement
has been made and delivered in the City of New York, and this Agreement has
become effective only upon such execution and delivery.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Pass Through
Trustee
By ________________________________
Name:
Title:
KREDIETBANK N.V., NEW YORK BRANCH,
as Class A Liquidity Provider and
Class B Liquidity Provider
By ________________________________
Name:
Title:
By ________________________________
Name:
Title:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity except as expressly set
forth herein but solely as
Subordination Agent and trustee
By ________________________________
Name:
Title:
SCHEDULE 1 TO
INTERCREDITOR AGREEMENT
Indentures
SCHEDULE 2 TO
INTERCREDITOR AGREEMENT
Participation Agreements
