-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, RklUf3LohonvCBOGTLtgEfg2RXU94OPb58XYmUropIN1Pi6t/5N0/tX/QC8i/QQn BNtvMg3zlCgU6OLnebrKSQ== 0000912057-95-000096.txt : 19950608 0000912057-95-000096.hdr.sgml : 19950608 ACCESSION NUMBER: 0000912057-95-000096 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19941130 FILED AS OF DATE: 19950113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERAL EXPRESS CORP CENTRAL INDEX KEY: 0000230211 STANDARD INDUSTRIAL CLASSIFICATION: AIR COURIER SERVICES [4513] IRS NUMBER: 710427007 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07806 FILM NUMBER: 95501295 BUSINESS ADDRESS: STREET 1: 2005 CORPORATE AVENUE CITY: MEMPHIS STATE: TN ZIP: 38132 BUSINESS PHONE: (901)-395-3382 MAIL ADDRESS: STREET 1: 2005 CORPORATE AVENUE CITY: MEMPHIS STATE: TN ZIP: 38132 10-Q 1 FORM 10-Q: PART II, E-1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) /x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED NOVEMBER 30, 1994, OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________. COMMISSION FILE NUMBER: 1-7806 FEDERAL EXPRESS CORPORATION (Exact name of registrant as specified in its charter) Delaware 71-0427007 (State of incorporation) (I.R.S. Employer Identification No.) 2005 Corporate Avenue Memphis, Tennessee 38132 (Address of principal (Zip Code) executive offices) (901) 369-3600 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/ No / / Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock Outstanding Shares at December 31, 1994 Common Stock, par value $.10 per share 55,944,930 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION PAGE Condensed Consolidated Balance Sheets November 30, 1994 and May 31, 1994. . . . . . . . . . . . . . . . . . . 3-4 Condensed Consolidated Statements of Operations Three and Six Months Ended November 30, 1994 and 1993 . . . . . . . . . 5 Condensed Consolidated Statements of Cash Flows Six Months Ended November 30, 1994 and 1993 . . . . . . . . . . . . . . 6 Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . 7-11 Review of Condensed Consolidated Financial Statements by Independent Public Accountants . . . . . . . . . . . . . . . . . . . 12 Report of Independent Public Accountants . . . . . . . . . . . . . . . . . 13 Management's Discussion and Analysis of Results of Operations and Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 14-20 PART II. OTHER INFORMATION Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 21 EXHIBIT INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1 - 2 - FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
November 30, 1994 May 31, (Unaudited) 1994 ------------ ----------- (In thousands) Current Assets: Cash and cash equivalents . . . . . . . . . . . . . $ 245,965 $ 392,923 Receivables, less allowance for doubtful accounts of $34,245,000 and $33,933,000. . . . . . . . . . 1,152,679 1,020,511 Spare parts, supplies and fuel. . . . . . . . . . . 174,816 173,993 Deferred income taxes . . . . . . . . . . . . . . . 113,360 113,035 Prepaid expenses and other. . . . . . . . . . . . . 59,080 61,234 ----------- ----------- Total current assets . . . . . . . . . . . . . . 1,745,900 1,761,696 ----------- ----------- Property and Equipment, at Cost (Note 6) . . . . . . . 7,234,678 6,890,225 Less accumulated depreciation and amortization. . . 3,701,073 3,441,132 ----------- ----------- Net property and equipment . . . . . . . . . . . 3,533,605 3,449,093 ----------- ----------- Other Assets: Goodwill. . . . . . . . . . . . . . . . . . . . . . 406,664 415,178 Equipment deposits and other assets (Note 6). . . . 365,843 366,531 ----------- ----------- Total other assets . . . . . . . . . . . . . . . 772,507 781,709 ----------- ----------- $ 6,052,012 $ 5,992,498 ----------- ----------- ----------- -----------
See accompanying Notes to Condensed Consolidated Financial Statements. - 3 - FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' INVESTMENT
November 30, 1994 May 31, (Unaudited) 1994 ------------ ----------- (In thousands) Current Liabilities: Current portion of long-term debt (Note 3). . . . . $ 80,522 $ 198,180 Accounts payable. . . . . . . . . . . . . . . . . . 530,372 518,849 Accrued expenses (Note 2) . . . . . . . . . . . . . 897,806 819,399 ----------- ----------- Total current liabilities. . . . . . . . . . . . 1,508,700 1,536,428 ----------- ----------- Long-Term Debt, Less Current Portion (Note 3). . . . . 1,470,463 1,632,202 ----------- ----------- Deferred Income Taxes. . . . . . . . . . . . . . . . . 1,922 3,563 ----------- ----------- Other Liabilities. . . . . . . . . . . . . . . . . . . 989,612 895,600 ----------- ----------- Commitments and Contingencies (Notes 6 and 7) Common Stockholders' Investment (Note 5): Common Stock, $.10 par value; 200,000,000 shares authorized; 55,955,418 and 55,885,456 shares issued. . . . . . . . . . . . . 5,596 5,589 Other . . . . . . . . . . . . . . . . . . . . . . . 2,075,719 1,919,116 ----------- ----------- Total common stockholders' investment. . . . . . 2,081,315 1,924,705 ----------- ----------- $ 6,052,012 $ 5,992,498 ----------- ----------- ----------- -----------
See accompanying Notes to Condensed Consolidated Financial Statements. - 4 - FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended November 30, November 30, ---------------------- ---------------------- 1994 1993 1994 1993 ---------- ---------- ---------- ---------- (In thousands, except per share amounts) Revenues . . . . . . . . . . . . . . . $2,358,765 $2,121,525 $4,589,892 $4,137,250 ---------- ---------- ---------- ---------- Operating Expenses: Salaries and employee benefits. . . 1,105,875 1,024,819 2,167,683 2,016,880 Rentals and landing fees. . . . . . 199,306 172,323 387,936 338,532 Depreciation and amortization . . . 161,585 147,935 318,517 293,161 Fuel. . . . . . . . . . . . . . . . 127,747 119,076 245,104 233,812 Maintenance and repairs . . . . . . 133,219 115,899 269,402 235,793 Other . . . . . . . . . . . . . . . 454,657 391,755 881,889 767,447 ---------- ---------- ---------- ---------- 2,182,389 1,971,807 4,270,531 3,885,625 ---------- ---------- ---------- ---------- Operating Income . . . . . . . . . . . 176,376 149,718 319,361 251,625 ---------- ---------- ---------- ---------- Other Income (Expense): Interest, net . . . . . . . . . . . (30,462) (36,584) (63,449) (73,851) Other, net. . . . . . . . . . . . . 5,206 (2,595) 2,475 (6,400) ---------- ---------- ---------- ---------- (25,256) (39,179) (60,974) (80,251) ---------- ---------- ---------- ---------- Income Before Income Taxes . . . . . . 151,120 110,539 258,387 171,374 Income Tax Provision . . . . . . . . . 64,981 50,848 111,106 78,832 ---------- ---------- ---------- ---------- Net Income . . . . . . . . . . . . . . $ 86,139 $ 59,691 $ 147,281 $ 92,542 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Earnings per Share . . . . . . . . . . $ 1.53 $ 1.07 $ 2.61 $ 1.67 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Common and Common Equivalent Shares (Note 5) . . . . . . . . . . 56,385 55,850 56,500 55,518 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
See accompanying Notes to Condensed Consolidated Financial Statements. - 5 - FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended November 30, 1994 1993 ---------- ---------- (In thousands) Net Cash Provided by Operating Activities. . . . . . . $ 465,968 $ 379,167 --------- --------- Investing Activities: Purchases of property and equipment, including deposits on aircraft of $62,130,000 and $65,667,000 . . . . . . . . . . . . . . . . . . . (479,498) (762,632) Proceeds from disposition of property and equipment: Sale-leaseback transactions . . . . . . . . . . - 581,400 Reimbursements of A300 deposits . . . . . . . . 77,588 - Other dispositions. . . . . . . . . . . . . . . 15,144 19,397 Other, net. . . . . . . . . . . . . . . . . . . . . 52,801 2,258 --------- --------- Net cash used in investing activities. . . . . . . . . (333,965) (159,577) --------- --------- Financing Activities: Proceeds from debt issuances. . . . . . . . . . . . 45,460 10,558 Principal payments on debt. . . . . . . . . . . . . (327,431) (51,602) Proceeds from stock issuances . . . . . . . . . . . 3,010 27,777 Other, net. . . . . . . . . . . . . . . . . . . . . - (2,509) --------- --------- Net cash used in financing activities. . . . . . . . . (278,961) (15,776) --------- --------- Net increase (decrease) in cash and cash equivalents. . . . . . . . . . . . . . . . . . (146,958) 203,814 Cash and cash equivalents at beginning of period . . . 392,923 155,456 --------- --------- Cash and cash equivalents at end of period . . . . . . $ 245,965 $ 359,270 --------- --------- --------- --------- Cash payments for: Interest (net of capitalized interest). . . . . . . $ 79,827 $ 74,404 --------- --------- --------- --------- Income taxes. . . . . . . . . . . . . . . . . . . . $ 91,287 $ 68,796 --------- --------- --------- ---------
See accompanying Notes to Condensed Consolidated Financial Statements. - 6 - FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Quarterly Reports on Form 10-Q and Rule 10-01 of Regulation S-X, and should be read in conjunction with Federal Express Corporation's Annual Report on Form 10-K for the year ended May 31, 1994. Accordingly, significant accounting policies and other disclosures normally provided have been omitted since such items are disclosed therein. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly the consolidated financial position of Federal Express Corporation and subsidiaries as of November 30, 1994, the consolidated results of their operations for the three- and six-month periods ended November 30, 1994 and 1993, and their consolidated cash flows for the six-month periods ended November 30, 1994 and 1993. Operating results for the three- and six-month periods ended November 30, 1994 are not necessarily indicative of the results that may be expected for the year ending May 31, 1995. Certain prior period amounts have been reclassified to conform to the current presentation. (2) ACCRUED EXPENSES
November 30, 1994 May 31, (Unaudited) 1994 ----------- -------- (In thousands) Compensated absences. . . . . . . . . $185,860 $180,105 Insurance . . . . . . . . . . . . . . 168,998 156,906 Taxes other than income taxes . . . . 133,421 130,801 Employee benefits . . . . . . . . . . 105,254 86,352 Salaries. . . . . . . . . . . . . . . 104,011 82,563 Aircraft overhaul . . . . . . . . . . 58,225 50,933 Federal income taxes. . . . . . . . . 41,369 34,775 Interest. . . . . . . . . . . . . . . 30,218 32,374 Other . . . . . . . . . . . . . . . . 70,450 64,590 -------- -------- $897,806 $819,399 -------- -------- -------- --------
- 7 - (3) LONG-TERM DEBT
November 30, 1994 May 31, (Unaudited) 1994 ----------- -------- (In thousands) Unsecured notes payable, interest rates of 6.25% to 10.57%, due through 2013 . . . . . . . $1,187,177 $1,384,942 Unsecured sinking fund debentures, interest . . . rate of 9.63%, due through 2020 . . . . . . . . 98,289 98,254 Capital lease obligations, Memphis-Shelby County Airport Authority Special Facilities Revenue Bonds, due through 2013, interest rates of 6.75% to 8.30%, net of bond reserve funds . . . 199,004 199,004 Other debt, effective rates of 5.83% to 6.80% . . 66,515 148,182 ---------- ---------- 1,550,985 1,830,382 Less current portion 80,522 198,180 ---------- ---------- $1,470,463 $1,632,202 ---------- ---------- ---------- ----------
The Company has a revolving credit agreement with domestic and foreign banks that provides for a commitment of $1,000,000,000 through May 31, 1996, all of which was available at November 30, 1994. Interest rates on borrowings under this agreement are generally determined by maturities selected and prevailing market conditions. Commercial paper borrowings are backed by unused commitments under this revolving credit agreement and reduce the amount available under the agreement. Borrowings under this credit agreement and commercial paper borrowings are classified as long-term based on the Company's ability and intent to refinance such borrowings. In September 1994, the City of Indianapolis issued $45,000,000 of 6.80% City of Indianapolis Airport Facility Revenue Refunding Bonds to retire the 11.25% Indianapolis Special Facilities Revenue Bonds, Series 1984 which were originally issued to finance the acquisition, construction and equipping of an express package sorting hub located at the Indianapolis International Airport and currently leased to the Company. The Refunding Bonds have a maturity date of April 1, 2017. See Note 6 Commitments for a discussion of additional commitments relating to the Company's facilities at the Indianapolis Airport. In 1993, the Company entered into a $140,000,000 foreign bank facility to provide term loans for predelivery payments on seven Airbus A300 aircraft. Principal and interest are payable upon delivery of the aircraft. As of November 30, 1994, the Company had $20,000,000 outstanding under this facility at an effective interest rate of 5.83%. - 8 - (4) PREFERRED STOCK The Certificate of Incorporation authorizes the Board of Directors, at its discretion, to issue up to 4,000,000 shares of Series Preferred Stock. The stock is issuable in series which may vary as to certain rights and preferences and has no par value. As of November 30, 1994, none of these shares had been issued. (5) COMMON STOCKHOLDERS' INVESTMENT During the six-month period ended November 30, 1994, 69,962 shares of common stock were issued under employee incentive plans at prices ranging from $34.31 to $62.94 per share. During the same period, 3,750 shares of non-vested restricted common stock were forfeited. The forfeited shares were recorded as treasury stock at a cost of $61.75 per share. On September 26, 1994, the stockholders approved an amendment to the Company's Restated Certificate of Incorporation to increase the authorized common stock of the Company from 100,000,000 to 200,000,000 shares. (6) COMMITMENTS As of November 30, 1994, the Company's purchase commitments for the remainder of 1995 and annually thereafter under various contracts are as follows (in thousands):
Aircraft- Aircraft Related(1) Other(2) Total -------- ---------- -------- -------- 1995 (remainder) $217,600 $ 39,100 $188,500 $445,200 1996 486,700 5,900 23,900 516,500 1997 234,200 8,300 5,700 248,200 1998 293,500 - 21,300 314,800 1999 - - 15,600 15,600
(1) Primarily aircraft modifications, rotables, and development and upgrade of aircraft simulators. (2) Primarily facilities, vehicles, computers and other equipment. The Company is committed to purchase 19 Airbus A300, one Airbus A310 and 50 Cessna 208B aircraft to be delivered through 1998. At November 30, 1994, deposits and progress payments of $289,135,000 had been made toward these purchases. At November 30, 1994, the Company had options to purchase up to 44 additional Airbus A300 aircraft for delivery beginning in 1997. - 9 - During the six-month period ended November 30, 1994, the Company acquired four Airbus A300 aircraft under operating leases. These aircraft were included as purchase commitments as of May 31, 1994. At the time of delivery, the Company sold its rights to purchase these aircraft to each of four third parties who reimbursed the Company for its deposits on the aircraft and paid additional consideration. The Company then entered into operating leases with each of the third parties who purchased the aircraft from the manufacturer. In October 1994, the Indianapolis Airport Authority issued $237,755,000 of 7.10% Special Facilities Revenue Bonds, due January 15, 2017, to finance the acquisition, construction and equipping of express cargo and parcel sorting facilities. The Company is obligated under an operating lease agreement with the Indianapolis Airport Authority to pay rentals equal to the principal and interest on the bonds. Additional lease commitments for the four Airbus A300 aircraft, two DC-10-10 aircraft acquired during the period, and the Indianapolis Airport Authority sorting facilities are as follows (in thousands): 1995 $ 3,225 1996 29,909 1997 33,681 1998 39,117 1999 42,142 Thereafter 1,179,580 (7) LEGAL PROCEEDINGS The Company has reached a settlement to the shareholder class-action lawsuit filed in 1990 against it, Frederick W. Smith, Chairman and Chief Executive Officer, and James L. Barksdale, the Company's former Executive Vice President and Chief Operating Officer. The settlement was approved on December 21, 1994 and an order dismissing the case with prejudice was entered by the United States District Court for the Western District of Tennessee. Any appeal from the order must be filed by January 21, 1995. The settlement was for an immaterial amount (the Company's portion of which has been recorded in the 1994 financial statements). The Company's insurance carrier will pay a majority of the settlement amount. Notice of the settlement has been mailed to purchasers of the Company's common stock affected by the settlement agreement and claims of the purchasers should be paid in 1995. The Internal Revenue Service ("IRS") issued an Examination Report on October 31, 1991 asserting the Company underpaid federal excise taxes for the calendar quarters ended December 31, 1983 through March 31, 1987. The Examination Report contains a primary position and a mutually exclusive alternative position asserting the Company underpaid federal excise taxes by $54,000,000 and $26,000,000, respectively. Disagreeing with essentially all of the proposed adjustments contained in the Examination Report, the Company filed a - 10 - Protest on March 16, 1992, which set forth the Company's defenses to both IRS positions and a claim for refund of overpaid federal excise taxes of $23,500,000. On March 19, 1993, the IRS issued another Examination Report to the Company asserting the Company underpaid federal excise taxes by $105,000,000 for the calendar quarters ended June 30, 1987 through March 31, 1991. On June 17, 1993, the Company filed a Protest contesting the March 19 Examination Report which set forth the Company's defenses to the IRS position and a claim for refund of overpaid federal excise taxes of $46,500,000. Interest would be payable on the amount of any refunds by the IRS to the Company or underpaid federal excise taxes payable by the Company to the IRS at statutorily determined rates. The interest rates payable by the Company for underpaid taxes are higher than the rates payable by the IRS on refund amounts. The Company is vigorously pursuing its Protests administratively with the IRS Appeals Division. If it is unsuccessful with the IRS Appeals Division, the Company intends to pursue its position in court. Pending resolution of this matter, the IRS can be expected to take positions similar to those taken in their Examination Reports for periods after March 31, 1991. Given the inherent uncertainties in the excise tax matter, management is currently unable to predict with certainty the outcome of this matter or the ultimate effect, if any, its resolution would have on the Company's financial condition or results of operations. No amount has been reserved for this contingency. The Company is subject to other legal proceedings and claims which arise in the ordinary course of its business. In the opinion of management, the aggregate liability, if any, with respect to these other actions will not materially adversely affect the financial position or results of operations of the Company. - 11 - REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS BY INDEPENDENT PUBLIC ACCOUNTANTS Arthur Andersen LLP, independent public accountants, has performed a review of the condensed consolidated balance sheet of the Company as of November 30, 1994, and the related condensed consolidated statements of operations for the three- and six-month periods ended November 30, 1994 and 1993 and the condensed consolidated statements of cash flows for the six-month periods ended November 30, 1994 and 1993, included herein, as indicated in their report thereon included on page 13. -12 - REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders of Federal Express Corporation: We have reviewed the accompanying condensed consolidated balance sheet of Federal Express Corporation and subsidiaries as of November 30, 1994 and the related condensed consolidated statements of operations for the three- and six- month periods ended November 30, 1994 and 1993 and the condensed consolidated statements of cash flows for the six-month periods ended November 30, 1994 and 1993. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Federal Express Corporation and subsidiaries as of May 31, 1994 and the related consolidated statements of operations, changes in common stockholders' investment and cash flows for the year then ended. In our report dated June 29, 1994, we expressed an unqualified opinion on those financial statements, which are not presented herein. In our opinion, the accompanying condensed consolidated balance sheet as of May 31, 1994 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. Arthur Andersen LLP Memphis, Tennessee, December 13, 1994 - 13 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS The Company's second quarter and year-to-date consolidated results reflect significant year-over-year improvement in its international operations. U.S. domestic results, because of a continuing trend of declines in revenue per package (yield) exceeding reductions in cost per package, worsened compared with the prior year's second quarter and year-to-date periods. A comparison of second quarter and year-to-date consolidated results is presented below (in millions, except per share data):
Three Months Ended Six Months Ended November 30, November 30, ------------------ ---------------- 1994 1993 1994 1993 ------ ------ ------ ------ Revenues. . . . . . . . . . . . . . $2,359 $2,122 $4,590 $4,137 Operating Income. . . . . . . . . . 176 150 319 252 Pre-tax Income. . . . . . . . . . . 151 111 258 171 Net Income. . . . . . . . . . . . . 86 60 147 93 Earnings per share. . . . . . . . . $ 1.53 $ 1.07 $ 2.61 $ 1.67
The revenue increases of 11.2% and 10.9% for the quarter and year-to-date periods, respectively, are primarily attributable to volume growth in U.S. domestic and international express services. Operating income increases of 17.8% and 26.9% for the quarter and year-to-date periods, respectively, are due to improvements in the Company's international operations but these improvements were restrained by continuing declines in U.S. domestic profitability. Total operating expenses increased 10.7% and 9.9% compared with the prior year's second quarter and year-to-date periods, respectively. The detail for total operating expenses is presented below (in millions):
Three Months Ended Six Months Ended November 30, November 30, ------------------ ---------------- 1994 1993 1994 1993 ------ ------ ------ ------ Salaries and employee benefits. . . $1,106 $1,025 $2,168 $2,017 Rentals and landing fees. . . . . . 199 172 388 339 Depreciation and amortization . . . 162 148 319 293 Fuel. . . . . . . . . . . . . . . . 128 119 245 234 Maintenance and repairs . . . . . . 133 116 269 236 Other . . . . . . . . . . . . . . . 454 392 882 767 ------ ------ ------ ------ $2,182 $1,972 $4,271 $3,886 ------ ------ ------ ------ ------ ------ ------ ------
Salaries and employee benefits increases of 7.9% and 7.5% for the quarter and year-to-date periods, respectively, are primarily due to increases in U.S. domestic employment levels associated with rising U.S. domestic volumes. Increased provisions under the Company's performance-based incentive compensation plans also contributed to year-to-date increases. - 14 - Rentals and landing fees increased 15.7% and 14.6% compared with the prior year's second quarter and year-to-date periods, respectively, primarily because of newly leased Airbus A300 and Airbus A310 aircraft acquired in response to growing U.S. domestic volumes. At November 30, 1994, there were six A300 and five A310 aircraft under operating leases. No such aircraft were leased at November 30, 1993. The year-to-date increase in rentals and landing fees is also attributable to additional MD-11 leases. During the first six months of 1995, the Company had thirteen MD-11 aircraft under operating leases. During the same period in 1994, the Company increased the number of MD-11s under operating leases from seven to thirteen aircraft. Aircraft rental expense is expected to continue to increase for the remainder of 1995 because of additional DC-10, A300 and A310 leases. The Company expects to be able to convert its A300 purchase commitments into direct operating leases. (See Note 6 Commitments.) Maintenance and repairs expense increased 14.9% and 14.3% compared with the prior year's second quarter and year-to-date periods, respectively, due to increased engine maintenance on B-727 and MD-11 aircraft. The engines of both aircraft types are the subject of maintenance directives issued by regulatory agencies. These directives require the Company to assess and, where applicable, take corrective action on the aircraft engines. Additionally, the older MD-11s are beginning to enter their initial cycle of scheduled engine maintenance. It is expected that this trend of increased year-over-year maintenance and repairs expense will continue for the remainder of 1995. Other operating expense increases of 16.1% and 14.9% compared with the prior year's second quarter and year-to-date periods, respectively, are generally attributable to year-over-year increases in volume. Most notable are those expenses related to the transportation of packages by outside contractors and temporary manpower. Advertising expense also contributed to the year-to- date increase in other operating expense. OTHER INCOME AND EXPENSE AND INCOME TAXES Decreases in net interest expense of 16.7% and 14.1% compared with 1994's second quarter and year-to-date periods is due primarily to lower debt levels. Other, net includes a $5.9 million distribution ($.06 earnings per share for the quarter) from the bankruptcy estate of a firm engaged by the Company in 1990 to remit payments of employees' withholding taxes to the appropriate authorities. During the third quarter of 1991, the Company recorded a $32 million charge to other income and expense for an estimated probable loss due to the failure of the firm to remit taxes due. The Company expects to receive additional distributions from the firm's bankruptcy estate depending on the outcome of preference litigation and other pending bankruptcy matters against the firm. The Company's effective tax rate was 43.0% for the three and six month periods ended November 30, 1994, compared with 46.0% for the same periods in the prior year. During the first quarter of 1995, the Company implemented a legal restructuring of its Mexico operations which permits the one-time deduction in 1995 of certain items for U.S. federal income tax purposes that were not deductible in prior years. - 15 - U.S. DOMESTIC SERVICES Operating results and selected statistics for U.S. domestic services are as follows (dollars in millions, except yields):
Three Months Ended Six Months Ended November 30, November 30, ------------------ ---------------- 1994 1993* 1994 1993* ------ ------ ------ ------ Revenues. . . . . . . . . . . . . . $1,697 $1,538 $3,331 $3,018 Operating Income. . . . . . . . . . 134 148 254 283 Operating Margin. . . . . . . . . . 7.9% 9.6% 7.6% 9.4% Express Package Statistics: Average daily packages (000s) . . 2,057 1,781 1,973 1,706 Revenue per package . . . . . . . $12.79 $13.57 $12.95 $13.65 Operating weekdays. . . . . . . . . 63 63 128 128 * Certain prior period information reflects a reclassification of certain revenues and volumes to conform to the current year classification of these services as express package business.
The Company's U.S. domestic revenues grew 10.3% and 10.4% for the quarter and year-to-date periods, respectively, while expenses rose 12.4% and 12.5% compared to the same periods in the prior year, resulting in continuing declines in operating margins. These declines in operating margin are primarily a function of declines in per package revenues (down 5.7% and 5.1% compared with 1994's second quarter and year-to-date periods, respectively) exceeding reductions in cost per package (down 3.2% and 3.0% compared with 1994's second quarter and year-to-date periods, respectively). Compared with the same periods in the prior year, average daily volumes increased 15.5% and 15.6%, respectively. Additionally, the Company continued to make expenditures which are expected to reduce unit costs in the future, e.g., pilot training for the new Airbus A300 and A310 aircraft and improved customer automation systems. While the Company reduced certain of its domestic costs, other costs related to maintenance and repairs on B-727 aircraft and expenses related to outside transportation costs increased. Sales of engine noise reduction kits during the second quarter contributed an incremental $11 million to operating income. The Company's U.S. domestic results for the second quarter were affected by competitive pressures prevalent in the U.S. domestic express market. These pressures, together with persistent customer demand for high quality express delivery services at lower prices, have created an extremely price-sensitive U.S. domestic express market. The Company has responded to these competitive pressures by offering lower- priced deferred services and increasing discounting. These actions have resulted in greater revenues and volumes but lower operating margins because the Company has not been able to offset declines in revenues per package with corresponding reductions in unit costs. Yields are expected to continue to fall because of faster growth in deferred services compared with priority services and selective discounting. - 16 - The Company is working to improve its current level of U.S. domestic profitability by seeking ways to lower unit costs, managing the decline in yield, and cultivating close working relationships with its customers. The Company is acquiring newer and more efficient Airbus A300 and A310 aircraft. These aircraft have an increased revenue payload and, compared to B-727 aircraft, have lower unit operating costs for appropriate load factors for fuel consumption, maintenance and crew manning. The most significant benefit of these aircraft will ultimately be realized on scheduled routes where more than one B-727 aircraft can be replaced with a single A300 or A310 aircraft and where incremental volume can be absorbed without adding additional aircraft. However, ownership costs, in absolute dollars, are higher for the A300 and A310 aircraft than for the older B-727 aircraft. The Company is also reducing the cost of handling packages through increased automation of its package pick-up, delivery, sorting and transportation operations. The Airport Improvements Act eliminated many of the intrastate transportation regulations that restricted the maximum use of the Company's lower cost ground transportation system. With these regulations eliminated, management anticipates more effective use of its ground transportation network which is expected to reduce unit costs in the long term. In addition, continued investment in customer and hub automation, larger load carrying vehicles, additional drop-off locations and other programs are expected to lower unit costs for additional future volumes. Management recognizes the importance of enhancing effective working relationships with its customers, especially in the highly competitive market in which the Company operates. Accordingly, the Company continues to focus on increasing the number of convenience locations, implementing direct airport service to new locations, developing alliances with retail businesses and increasing the placement of customer automation devices. The Company also intends to intensify its sales and marketing efforts by increasing its advertising expenditures, adding sales personnel, and targeting selected customer groups for special marketing programs. The Company's strategy for its U.S. domestic operations emphasizes those actions which management believes will produce the greatest long-term benefit. Competitive pressure and the customers' increased use of deferred services are expected to continue to cause yields to decline. However, management believes a combination of more efficient aircraft, improved automation, and expanded use of ground transportation will over the long term reduce the Company's cost per package and stabilize the declines in operating profits and margins. In the near term, however, it is expected that competitive activity and changes in customer demand patterns will continue to pressure the Company's U.S. domestic operating profits and margins. - 17 - INTERNATIONAL SERVICES Operating results and selected package and airfreight statistics for international operations are as follows (dollars in millions, except yields):
Three Months Ended Six Months Ended November 30, November 30, ------------------ ---------------- 1994 1993* 1994 1993* ------ ------ ------ ------ Revenues: International Priority Services (IP). . . . . $ 415 $ 326 $ 795 $ 633 International EXPRESSfreight (IXF) and Airport-to-Airport (ATA) airfreight services . . . . . . . . . . . . 156 140 299 261 International FedEx Logistics Services, Charter and other . . . . . . . . . 91 118 165 225 ------ ------ ------ ------ 662 584 1,259 1,119 ------ ------ ------ ------ Operating Income (Loss) . . . . . . . . . . . . $ 43 $ 2 $ 65 $ (31) Operating Margin. . . . . . . . . . . . . . . . 6.5% 0.4% 5.2% (2.8)% Package and Airfreight Statistics: Average daily IP packages (000s). . . . . . . 163 133 156 127 Revenue per package (yield) . . . . . . . . . $40.50 $38.99 $39.94 $38.81 Average daily airfreight pounds (000s). . . . 2,326 1,966 2,203 1,871 Revenue per pound (Yield) . . . . . . . . . . $ 1.07 $ 1.13 $ 1.06 $ 1.09 * Certain prior period information reflects a reclassification of certain revenues and volumes to conform to the current year classification of these services as express package or airfreight business.
The Company's international operating results for the quarter and year-to- date periods reflect continued year-over-year growth in profitability. Revenues increased 13.4% and 12.5% compared with the prior year's quarter and year-to- date periods, respectively, while expenses increased 6.5% and 3.8% compared with these same periods. Most of the improvement in profitability is attributable to strong growth in the Company's International Priority Services (IP). Revenues, average daily volumes and yields for IP increased 27.3%, 22.6% and 3.9%, respectively, compared with the second quarter of 1994 while these same factors increased 25.6%, 22.1% and 2.9%, respectively, compared with the first six months of 1994. Airfreight revenues and average daily volumes increased 11.8% and 18.3%, respectively, compared with the second quarter of 1994 and increased 14.6% and 17.7%,respectively, compared with the first six months of 1994. Yields declined 5.3% and 2.8% compared with the prior year's second quarter and year-to-date periods, respectively. Most of the revenue and volume gains are attributable to growth in the Company's IXF service. To encourage this growth, management continued its marketing and advertising efforts on IXF, a premium-priced, time- definite service, and the Company sustained high service levels. Additionally, during 1994, pricing actions were initiated which narrowed the price differential between ATA, a lower-priority service whose price is typically determined by capacity and market - 18 - conditions, and IXF. As a result of these factors, IXF average daily volumes and revenues grew significantly (61.4% and 35.7%, respectively, over 1994's second quarter and 73.5% and 47.2%, respectively, over the first six months of 1994). Double-digit increases in airfreight revenues and volumes that the Company has experienced since the fourth quarter of 1994 are dependent upon continued customer demand and available capacity. The revenue decrease in International FedEx Logistics Services, Charter and other is primarily due to the sale, effective May 31, 1994, of the Company's German logistics subsidiary. Sustained improvement in the Company's international operations is dependent on continued growth in IP, the Company's ability to manage incremental costs associated with that growth and system efficiencies. To promote IP growth, aggressive sales and marketing efforts are targeting time-sensitive industries to capture new business. Also, as economic conditions improve in certain global markets, the Company's distribution network will be positioned to benefit from increased volumes associated with business growth. To contain costs, management will monitor customer demand patterns and make changes to its distribution network to make optimum use of Company resources. Furthermore, through technological advances that aid in the sorting, routing and delivery of packages, the Company has the ability to add limited incremental volume without adding a corresponding amount of incremental cost. FINANCIAL CONDITION CAPITAL EXPENDITURES AND RESOURCES The Company's operations are capital intensive, characterized by significant investments in aircraft, package handling facilities, sort equipment, vehicles, and computer and telecommunication equipment. The amount and timing of capital additions are dependent on various factors including volume growth, new or enhanced services, geographical expansion of services, competition and availability of satisfactory financing. Capital expenditures for the first six months of 1995 totaled $479 million and included vehicle and ground support equipment, customer automation and computer equipment and deposits on future Airbus A300 aircraft. In comparison, prior year additions totaled $763 million and included five MD-11 aircraft, three B-727-200 aircraft, deposits on A300 aircraft, vehicle and ground support equipment, and customer automation and computer equipment. At November 30, 1994, the Company had commitments aggregating approximately $1.0 billion, net of deposits and progress payments of $289 million, for the acquisition of 19 Airbus A300, one Airbus A310 and 50 Cessna 208B aircraft (scheduled for delivery through 1998), aircraft modifications and related parts and the development and upgrade of aircraft simulators. An estimated $257 million will be expended in the remainder of 1995, $493 million in 1996, $243 million in 1997 and $294 million in 1998, in connection with these commitments. - 19 - At November 30, 1994, the Company also had options for up to 44 additional Airbus A300 aircraft for delivery beginning in 1997. In addition, the Company has other commitments related to facility and other equipment acquisitions that approximated $255 million at November 30, 1994, of which an estimated $189 million will be expended in the remainder of 1995. The Company has historically financed its capital investments through the use of lease, debt and equity financing in addition to the use of internally generated cash from operations. Management's practice in recent years with respect to funding new aircraft acquisitions has been to finance such aircraft through long-term lease transactions that qualify as off balance sheet operating leases under applicable accounting rules. Management has determined that these leases provide economic benefits favorable to ownership with respect to residual value risk, liquidity and after-tax cash flows. The Company has been successful in obtaining investment capital, both U.S. domestic and international, for long-term leases on terms acceptable to it although the marketplace for such capital can become restricted depending on a variety of economic factors beyond the control of the Company. The Company believes that for the foreseeable future it will continue to be able to find financing for its needs on acceptable terms. In November 1994, the Company filed a shelf registration statement with the Securities and Exchange Commission relating to $465 million of equipment trust and pass through certificates. These certificates can be used to finance the purchase of aircraft or to finance aircraft in leveraged lease transactions. Management believes that the capital resources available to the Company provide it with the appropriate flexibility to gain access to the most efficient market with respect to any particular aircraft acquisition and afford adequate capital resources for its future capital needs. These resources include backstop financing for the 19 Airbus A300 aircraft the Company is committed to purchase in 1995 to 1998, $100 million of unsecured notes available under a shelf registration filed with the Securities and Exchange Commission in June 1992, $465 million of equipment trust and pass through certificates available as discussed above, and the ability to draw upon the public and private debt markets for leveraged lease financing. LIQUIDITY AND FINANCIAL POSITION Cash and cash equivalents totaled $246 million at November 30, 1994, a decrease of $147 million during the first six months of 1995. Cash provided from operations during the first six months was $466 million compared with $379 million for the same period in the prior year. The Company currently has available a $1 billion revolving bank credit facility that is generally used to finance temporary operating cash requirements and to provide support for the issuance of commercial paper. - 20 - PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Note 7 Legal Proceedings in Part I is hereby incorporated by reference. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. Exhibit Number Description of Exhibit ------- ---------------------- 10.1 Indenture dated as of October 1, 1994 between Indianapolis Airport Authority and NBD Bank, N.A., as Trustee, relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017. 10.2 Guaranty dated as of October 1, 1994 from Registrant to NBD Bank, N.A. relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017. 10.3 Land and Special Facilities Lease Agreement dated as of October 1, 1994 between Registrant and the Indianapolis Airport Authority relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017. 11.1 Statement re Computation of Earnings Per Share. 12.1 Computation of Ratio of Earnings to Fixed Charges. 15.1 Letter re Unaudited Interim Financial Statements. 27.1 Financial Data Schedule. (b) Reports on Form 8-K. During the quarter ended November 30, 1994, the Registrant filed one Current Report on Form 8-K. The report was dated September 14, 1994 and filed under Item 7, Financial Statements and Exhibits. The report contained (1) Registrant's Computation of Ratio of Earnings to Fixed Charges; (2) a press release dated September 14, 1994; and (3) Appendix A to a Preliminary Official Statement prepared with respect to the Indianapolis Airport Authority Special Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project). - 21 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FEDERAL EXPRESS CORPORATION (Registrant) Date: January 12, 1995 /s/ JAMES S. HUDSON ------------------------------ JAMES S. HUDSON VICE PRESIDENT & CONTROLLER (PRINCIPAL ACCOUNTING OFFICER) - 22 - EXHIBIT INDEX Exhibit Number Description of Exhibit - ------- ---------------------- 10.1 Indenture dated as of October 1, 1994 between Indianapolis Airport Authority and NBD Bank, N.A., as Trustee, relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017. 10.2 Guaranty dated as of October 1, 1994 from Registrant to NBD Bank, N.A. relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017. 10.3 Land and Special Facilities Lease Agreement dated as of October 1, 1994 between Registrant and the Indianapolis Airport Authority relating to 7.10% Special Facilities Revenue Bonds, Series 1994 due January 15, 2017. 11.1 Statement re Computation of Earnings Per Share. 12.1 Computation of Ratio of Earnings to Fixed Charges. 15.1 Letter re Unaudited Interim Financial Statements. 27.1 Financial Data Schedule. E-1 EX-10.1 2 EXHIBIT 10.1: INDENTURE DTD Exhibit 10.1 ________________________________________________________________________________ TRUST INDENTURE BY AND BETWEEN INDIANAPOLIS AIRPORT AUTHORITY AND NBD BANK, N.A., AS TRUSTEE DATED AS OF OCTOBER 1, 1994 ________________________________ AUTHORIZING AND SECURING INDIANAPOLIS AIRPORT AUTHORITY SPECIAL FACILITIES REVENUE BONDS, SERIES 1994 (FEDERAL EXPRESS CORPORATION PROJECT) ______________________________________________________________________________ TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Section 101. Meaning of Words and Terms. . . . . . . . . . . . . . . . . . . 3 Section 102. Rules of Construction . . . . . . . . . . . . . . . . . . . . . 9 Section 103. General Ordinance . . . . . . . . . . . . . . . . . . . . . . . 9 ARTICLE II DETAILS OF BONDS. . . . . . . . . . . . . . . . . . . . . . . .10 Section 201. Authorized Amount of Bonds. . . . . . . . . . . . . . . . . . .10 Section 202. Authorization of Series 1994 Bonds. . . . . . . . . . . . . . .10 Section 203. Payment on Series 1994 Bonds. . . . . . . . . . . . . . . . . .10 Section 204. Execution and Form of Series 1994 Bonds . . . . . . . . . . . .11 Section 205. Authentication of Series 1994 Bonds . . . . . . . . . . . . . .11 Section 206. Delivery of Series 1994 Bonds . . . . . . . . . . . . . . . . .12 Section 207. Exchange of Series 1994 Bonds . . . . . . . . . . . . . . . . .12 Section 208. Negotiability and Registration of Transfer of Series 1994 Bonds . . . . . . . . . . . . . . . . . . . . . .12 Section 209. Ownership of Series 1994 Bonds. . . . . . . . . . . . . . . . .14 Section 210. Mutilated, Destroyed, Lost or Stolen Series 1994 Bonds. . . . .14 Section 211. Additional Bonds. . . . . . . . . . . . . . . . . . . . . . . .14 ARTICLE III REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . .17 Section 301. Redemption Generally. . . . . . . . . . . . . . . . . . . . . .17 Section 302. Redemption of Portion of Bonds. . . . . . . . . . . . . . . . .17 Section 303. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . .17 Section 304. Redemption of Series 1994 Bonds . . . . . . . . . . . . . . . .17 Section 305. Selection of Series 1994 Bonds to be Redeemed . . . . . . . . .18 Section 306. Redemption Notice . . . . . . . . . . . . . . . . . . . . . . .18 ARTICLE IV DEPOSIT OF SERIES 1994 BOND PROCEEDS, CONSTRUCTION FUND . . . . . . . . . . . . . . . . . . . . . .20 Section 401. Construction Fund . . . . . . . . . . . . . . . . . . . . . . .20 Section 402. Payments from Construction Fund . . . . . . . . . . . . . . . .20 Section 403. Reliance upon Requisitions. . . . . . . . . . . . . . . . . . .21 Section 404. Net Proceeds Account. . . . . . . . . . . . . . . . . . . . . .21 - i - ARTICLE V REVENUES AND FUNDS. . . . . . . . . . . . . . . . . . . . . . .22 Section 501. Establishment of Funds. . . . . . . . . . . . . . . . . . . . .22 Section 502. Deposits to Bond Fund . . . . . . . . . . . . . . . . . . . . .22 Section 503. Application of Money in the Bond Fund . . . . . . . . . . . . .22 Section 504. Nonpayment on Bonds . . . . . . . . . . . . . . . . . . . . . .23 Section 505. Cancellation of Bonds . . . . . . . . . . . . . . . . . . . . .23 Section 506. Disposition of Fund Balances. . . . . . . . . . . . . . . . . .23 Section 507. Security for the Bonds. . . . . . . . . . . . . . . . . . . . .23 ARTICLE VI SECURITY FOR DEPOSITS, INVESTMENT OF FUNDS. . . . . . . . . . .25 Section 601. Security for Deposits . . . . . . . . . . . . . . . . . . . . .25 Section 602. Investment of Money . . . . . . . . . . . . . . . . . . . . . .25 ARTICLE VII GENERAL COVENANTS AND REPRESENTATIONS . . . . . . . . . . . . .27 Section 701. Payment of Principal, Interest and Premium. . . . . . . . . . .27 Section 702. Covenant to Perform Obligations under this Indenture and the Agreement . . . . . . . . . . . . . . . . . . . . . .27 Section 703. Further Instruments and Actions . . . . . . . . . . . . . . . .27 Section 704. Representations by the Authority. . . . . . . . . . . . . . . .27 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . .29 Section 801. Extension of Interest Payment . . . . . . . . . . . . . . . . .29 Section 802. Events of Default . . . . . . . . . . . . . . . . . . . . . . .29 Section 803. Acceleration of Maturities. . . . . . . . . . . . . . . . . . .30 Section 804. Enforcement of Remedies . . . . . . . . . . . . . . . . . . . .30 Section 805. The Trustee May File Claim in Bankruptcy. . . . . . . . . . . .30 Section 806. Pro Rata Application of Funds . . . . . . . . . . . . . . . . .31 Section 807. Effect of Discontinuance of Proceedings . . . . . . . . . . . .32 Section 808. Control of Proceedings by Owners. . . . . . . . . . . . . . . .32 Section 809. Restrictions Upon Actions by Individual Owners. . . . . . . . .32 Section 810. Enforcement of Rights of Action . . . . . . . . . . . . . . . .33 Section 811. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . .33 Section 812. Delay Not a Waiver. . . . . . . . . . . . . . . . . . . . . . .33 Section 813. Notice of Default . . . . . . . . . . . . . . . . . . . . . . .34 Section 814. Right to Enforce Payment of Bonds Unimpaired. . . . . . . . . .34 Section 815. Waiver of Event of Default. . . . . . . . . . . . . . . . . . .34 - ii - ARTICLE IX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . .35 Section 901. Acceptance of Trusts. . . . . . . . . . . . . . . . . . . . . .35 Section 902. Indemnification of the Trustee as Condition for Remedial Action upon Direction of Owners. . . . . . . . . . . . . . . . . . .35 Section 903. Limitations on Obligations and Responsibilities of the Trustee.35 Section 904. The Trustee Not Liable for Failure of the Authority to Act. . .36 Section 905. Compensation of the Trustee . . . . . . . . . . . . . . . . . .36 Section 906. Monthly Statements from the Trustee . . . . . . . . . . . . . .36 Section 907. The Trustee Protected in Relying on Certain Documents . . . . .37 Section 908. Notice of Default . . . . . . . . . . . . . . . . . . . . . . .37 Section 909. The Trustee Not Responsible for Recitals. . . . . . . . . . . .37 Section 910. The Trustee May Deal in Bonds . . . . . . . . . . . . . . . . .37 Section 911. Resignation and Removal of the Trustee Subject to Appointment of Successor. . . . . . . . . . . . . . . . . . . . . . . . .37 Section 912. Resignation of the Trustee. . . . . . . . . . . . . . . . . . .38 Section 913. Removal of the Trustee. . . . . . . . . . . . . . . . . . . . .38 Section 914. Appointment of Successor Trustee. . . . . . . . . . . . . . . .38 Section 915. Vesting of Duties in Successor Trustee. . . . . . . . . . . . .39 ARTICLE X EXECUTION OF INSTRUMENTS BY OWNERS, PROOF OF OWNERSHIP OF BONDS, AND DETERMINATION OF CONCURRENCE OF OWNERS. . . . . . . . . . . . . . . . . . .40 Section 1001. Execution of Instruments by Owners. . . . . . . . . . . . . . .40 ARTICLE XI SUPPLEMENTAL INDENTURE. . . . . . . . . . . . . . . . . . . . .41 Section 1101. Supplemental Indenture Without Owners' Consent. . . . . . . . .41 Section 1102. Supplemental Indenture With Owners' Consent . . . . . . . . . .41 Section 1103. Bonds Affected. . . . . . . . . . . . . . . . . . . . . . . . .42 Section 1104. Supplemental Indentures Part of Indenture . . . . . . . . . . .43 Section 1105. Lessee Consent, Opinion of Bond Counsel Required. . . . . . . .43 ARTICLE XII SUPPLEMENTS AND AMENDMENTS TO AGREEMENT OR THE SERIES 1994 GUARANTY. . . . . . . . . . . . . . . . . . .44 Section 1201. Supplements and Amendments Not Requiring Consent. . . . . . . .44 Section 1202. Supplements and Amendments Requiring Consent of Owners of a Majority in Principal Amount of Bonds . . . . . . . . . . .45 Section 1203. Opinion of Bond Counsel . . . . . . . . . . . . . . . . . . . .45 - iii - ARTICLE XIII DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . . .46 Section 1301. Defeasance of Bonds . . . . . . . . . . . . . . . . . . . . . .46 ARTICLE XIV MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . .48 Section 1401. Effect of Covenants . . . . . . . . . . . . . . . . . . . . . .48 Section 1402. Manner of Giving Notice . . . . . . . . . . . . . . . . . . . .48 Section 1403. Inconsistent Indenture. . . . . . . . . . . . . . . . . . . . .49 Section 1404. Headings Not Part of Indenture. . . . . . . . . . . . . . . . .49 Section 1405. The Authority, the Lessee, the Trustee and the Owners Alone Have Rights under Indenture . . . . . . . . . . . . . . . . .49 Section 1406. Effect of Partial Invalidity. . . . . . . . . . . . . . . . . .49 Section 1407. State Law Governs . . . . . . . . . . . . . . . . . . . . . . .49 Section 1408. Indenture Effective . . . . . . . . . . . . . . . . . . . . . .49 Section 1409. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . .49 Section 1410. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .50 EXHIBITS: A - Project Description B - Bond Form C - DTC Letter of Representation D - Requisition Form - iv - TRUST INDENTURE This Trust Indenture, dated as of October 1, 1994, by and between the INDIANAPOLIS AIRPORT AUTHORITY (the "Authority"), a municipal corporation organized and existing under the laws of the State of Indiana (the "State") and NBD BANK, N.A., a national banking association, as trustee (the "Trustee") W I T N E S S E T H: WHEREAS, the Authority owns and operates a public airport known as the Indianapolis International Airport (such airport, together with such additions thereto as may be made from time to time, the "Airport"); and WHEREAS, the Authority is empowered under the Constitution and laws of the State, particularly I.C. 8-22-3 (as the same may be amended from time to time, herein called the "Act"), to undertake the obligations and commitments on its part herein set forth; and WHEREAS, the Authority has determined that it is necessary to construct certain additions to the existing facilities at the Airport leased to Federal Express Corporation (the "Lessee") and certain other structures, equipment and improvements for or related to the sorting and distribution of express cargo and parcels, all as more particularly described in the Land and Special Facilities Lease Agreement (the "Agreement") of even date herewith between the Authority and the Lessee and that it is in the best interests of the Authority to lease the Leased Premises (as defined in the Agreement) to the Lessee; and WHEREAS, under the authority granted by the Act, the Authority is authorized, among other things, to (a) acquire, construct, reconstruct, extend, improve, maintain and operate airport facilities, including, but not limited to facilities such as the Special Facilities (as defined in the Agreement); and (b) to borrow money by issuing revenue bonds for the purpose of acquiring, constructing, reconstructing, extending, or improving airport facilities such as the Special Facilities; and (c) to pledge to the payment of such bonds and interest thereon revenues from one or more airport facilities such as the Special Facilities; and WHEREAS, the Authority has determined to provide for the issuance of revenue bonds payable solely from the Trust Estate (as hereinafter defined); 1 NOW, THEREFORE, for and in consideration of these premises and the mutual covenants herein contained, of the acceptance by the Trustee of the trusts hereby created, of the purchase and acceptance of the Bonds (as hereinafter defined) by the Owners (as hereinafter defined) thereof and of the sum of one dollar lawful money of the United States of America, to it duly paid by the Trustee at or before the execution and delivery of these presents, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds at any time Outstanding (as hereinafter defined) under this Indenture according to their tenor and effect, and the performance and observance by the Authority of all the covenants and conditions expressed or implied herein and contained in the Bonds, the Authority does hereby assign to the Trustee, its successors in trust and their assigns forever, and grants to the Trustee, its successors in trust and their assigns forever, a security interest in all right, title and interest of the Authority in or to, the Trust Estate and causes the Lessee to execute the Series 1994 Guaranty (as herein defined), subject to the provisions of this Indenture permitting the application thereof for the purposes and on the terms set forth herein; TO HAVE AND TO HOLD all the same with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended so to be, to the Trustee, its successors in trust and their assigns forever; IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit and security of all the Owners of the Bonds issued under and secured by this Indenture without preference, priority or distinction as to the lien of any Bonds over any other Bonds; PROVIDED, HOWEVER, that if, after the right, title and interest of the Trustee in and to the Trust Estate shall have ceased, terminated and become void in accordance with Article XIII hereof, the principal of, premium, if any, and interest on the Bonds shall have been paid or duly provided for to the Owners thereof, and after all other moneys held hereunder shall have been paid to the Authority pursuant to Section 506 hereof, then and in that case these presents and the estate and rights hereby granted shall cease, terminate and be void, and thereupon the Trustee shall cancel and discharge this Indenture and execute and deliver to the Authority and the Lessee such instruments in writing as shall be requisite to evidence the discharge hereof; otherwise this Indenture is to be and to remain in full force and effect; and THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared, that all the Bonds issued and secured hereunder are to be issued, authenticated and delivered, and the Trust Estate and the other estate and rights hereby granted are to be dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Authority has agreed and covenanted, and 2 does hereby agree and covenant, with the Trustee and with the respective Owners, from time to time, of the Bonds, as follows: ARTICLE I DEFINITIONS Section 101. MEANING OF WORDS AND TERMS. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement, unless some other meaning is plainly intended. In addition to words or terms elsewhere defined in this Indenture, the following words and terms as used in this Indenture shall have the following meanings, unless some other meaning is plainly intended: "Account" means any separate account within a Fund. "Additional Bonds" means any Series of Bonds issued under this Indenture, other than the Series 1994 Bonds. "Airport Director" means the Authority's Executive Director, the officer succeeding to his principal duties or such other individual who from time to time is designated in writing by the Authority to perform the duties of the Executive Director. "Agreement" means the Land and Special Facilities Lease Agreement by and between the Authority and the Lessee, dated as of the date hereof, together with all amendments and supplements thereto. "Authority" means the Indianapolis Airport Authority, a municipal corporation organized and operating under the laws of the State, including the Act, or any successor thereto or assign thereof. "Bond" or "Bonds" means the Series 1994 Bonds and any Additional Bonds authorized under and secured by this Indenture. "Bond Fund" means the fund created and designated the Bond Fund by Section 501 hereof. "Business Day" means a day of the year, other than a Saturday or Sunday, on which commercial banks located in: (i) the city in which the corporate trust operations office of the Trustee is located, (ii) the city in which the principal office of the Lessee is located, and (iii) New York, New York, are not required or authorized to remain closed. 3 "Code" means, with respect to each Series, the Internal Revenue Code of 1986, as amended (or any subsequent federal income tax statute or code that replaces or restates the Internal Revenue Code of 1986, as amended) and in effect on the date of issuance of such Series. References to the Code shall include all relevant final, temporary and proposed rules and regulations from time to time in effect. "Construction Fund" means the fund created and designated the Construction Fund by Section 401 hereof. "DTC Letter of Representations" means, with respect to the Series 1994 Bonds, the Letter of Representations between the Authority, the Trustee and the initial Depository, the form of which is attached hereto as Exhibit C hereof. "Depository" means any securities depository that is a clearing agency under federal law operating and maintaining, with its participants or otherwise, a book entry system to record ownership of book entry interest in bonds, and to effect transfers of book entry interests in bonds in book entry form, and includes and means initially The Depository Trust Company (a limited purpose trust company), New York, New York. "Eminent Domain" means the eminent domain or condemnation power by which all or any part of the Special Facilities may be taken, except as provided in Section 1104 of the Agreement, for another public use or any agreement that is reached in lieu of proceedings to exercise such power. "Event of Default" means each of those events of default set forth in Section 802 of this Indenture. "Funds" mean those funds established in Section 401 and Section 501 of this Indenture. "Government Obligations" means (i) any bonds or other obligations of the United States of America which, as to principal and interest, constitute direct non-callable obligations of or are guaranteed by the United States of America; (ii) any non-callable bonds, debentures, participation certificates, notes or other obligations of any agency or other corporation which has been or may hereafter be created by or pursuant to an Act of Congress of the United States as an agency or instrumentality thereof, the bonds, debentures, participation certificates, notes or other obligations of which are unconditionally guaranteed by the United States of America; (iii) obligations of the Government National Mortgage Association; and (iv) any certificates or other evidences of an ownership interest in obligations of the character described in clauses (i), (ii) and (iii) or in specific portions thereof, including, without limitation, portions consisting solely of the principal thereof or solely of the interest thereon. 4 "Indenture" means this Trust Indenture dated as of October 1, 1994, between the Authority and the Trustee, as supplemented and amended, providing for the issuance of the Bonds. "Interest Payment Date" means, with respect to the Series 1994 Bonds each January 15 and July 15, commencing January 15, 1995, and, with respect to any Additional Bonds, the interest payment dates provided for in the Series Indenture relating to such Additional Bonds. "Investment Obligations" means to the extent permitted by law, including, without limitation the applicable provisions of I.C. 5-13: (i) Government Obligations, (ii) obligations of the Federal National Mortgage Association, (iii) obligations of the Federal Intermediate Credit Banks, (iv) obligations of Federal Farm Credit Banks, (v) obligations of Federal Home Loan Banks, (vi) obligations of the Export-Import Bank of the United States, (vii) obligations of the U.S. Postal Service, (viii) obligations of the Federal Home Loan Mortgage Corporation, (ix) obligations of the Private Export Funding Corporation, (x) written repurchase agreements with a bank or trust company, including the Trustee, that are insured by the FDIC, or with any broker-dealer with retail customers that fall under Securities Investor Protection Corporation protection, provided that such repurchase agreements are fully secured by Government Obligations and provided further that (a) such collateral is held by the Trustee or any agent acting solely for the Trustee during the term of such repurchase agreement, (b) such collateral is not subject to liens or claims of third parties, (c) such collateral has a market value exclusive of accrued interest (determined daily by the Trustee or any agent holding such collateral for the Trustee as referred to in (a) of this clause (x)) at least equal to the amount invested in the repurchase agreement, (d) the Trustee has a perfected first security interest in the collateral, (e) the agreement shall be for a term not longer than ninety (90) days and (f) the failure to maintain such collateral at the level required on (c) above will require the Trustee to liquidate the collateral, (xi) obligations of a state, territory or possession of the United States or any political subdivision of the foregoing, the interest on which is excluded from gross income for federal income taxation purposes and which bear a rating in one of the two highest rating categories by Standard & Poor's Rating Group or Moody's Investors Service, (xii) obligations described in clause (xi) above which have been advance refunded and are secured by obligations described in clause (i) above, (xiii) interest bearing accounts, interest bearing deposits or certificates of deposit issued by, or bankers acceptances drawn or accepted by, banks or trust companies, including the Trustee, organized under the laws of the United States or any state thereof, (xiv) commercial paper rated A-1 or better by Standard & Poor's Rating Group or P-1 or better by Moody's Investors Service, (xv) notes of bank holding companies and banking institutions, organized under the laws of the United States or any state thereof, (xvi) units of a taxable government money-market portfolio (which may be managed by the Trustee) restricted to obligations issued or guaranteed as to payment of principal and interest by the full faith and credit of the United States or repurchase agreements collateralized by such obligations; provided, however that not more than twenty million dollars ($20,000,000) of funds on deposit under the Indenture may be invested at any one 5 time in Investment Obligations described in this clause (xvi). Any of the items described in (xiii) and (xv) hereof shall be only of institutions whose capital and surplus (or in the case of financial institutions other than banks, net worth) is in excess of $250,000,000 and whose long term debt is rated AA - or better by Standard & Poor's Rating Group or Aa3 or better by Moody's Investors Service. "Lessee" means Federal Express Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware and qualified to do business in the State, or any successor thereto or assign thereof permitted under the Agreement. "Net Proceeds" means the gross proceeds derived from insurance or any Eminent Domain award or agreement in lieu of award in Eminent Domain proceedings, less payment of attorneys' fees and expenses properly incurred in the collection of such gross proceeds, but only with respect to the Special Facilities. "Outstanding" when used with reference to Bonds means, as of a particular date, all bonds theretofore authorized under and secured by this Indenture except: (a) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (b) Bonds the payment of which has been made or duly provided for in accordance with Section 1301 hereof; and (c) Bonds in exchange for or in lieu of which other Bonds have been authenticated and delivered pursuant to this Indenture. "Owner" or "Holder" means a person in whose name a Bond is registered in the registration books provided for in Section 208 of this Indenture. "Redemption Price" means, with respect to a Bond or a portion thereof, the principal amount of such Bond plus the applicable premium, if any, payable upon redemption thereof in the manner contemplated in accordance with its terms and the terms provided by this Indenture. "Regular Record Date" means, with respect to any Bond, the 1st day of the month that contains any applicable Interest Payment Date. "Related Person" means a "related person" within the meaning of Section 147(a) of the Code. 6 "Serial Bonds" means, with respect to any Additional Bonds, the Additional Bonds that are designated as Serial Bonds in the applicable Series Indenture. "Series," whenever used herein with respect to Bonds, means all of the Bonds designated as being part of the same series. "Series 1994 Bonds" means the Indianapolis Airport Authority Special Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project) to be issued in the aggregate amount of $237,755,000. "Series 1994 Determination of Taxability" means, subject to the Lessee's rights in the next succeeding paragraph: (a) the delivery to the Trustee of notice of a statutory notice of deficiency issued by the Internal Revenue Service which states, in effect, that a Series 1994 Event of Taxability has occurred; (b) the delivery to the Trustee of written notice of the rendering of a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction to the effect that a Series 1994 Event of Taxability has occurred; or (c) the delivery by Bond Counsel selected by the Lessee and reasonably acceptable to the Trustee of an opinion to the effect that a Series 1994 Event of Taxability has occurred. A Series 1994 Determination of Taxability shall not be deemed to have occurred pursuant to (a) above unless the Lessee shall have: (1) concurred in the occurrence of a Series 1994 Determination of Taxability; (2) failed to initiate proceedings to contest the occurrence of the Series 1994 Determination of Taxability in accordance with clause (3) of this paragraph within sixty (60) days after the occurrence of the Series 1994 Determination of Taxability or failed to have diligently proceeded with such contest to its conclusion; (3) contested the occurrence of the Series 1994 Determination of Taxability by appropriate proceedings, diligently pursued the same, but failed to obtain, within one year from the occurrence of such Series 1994 Determination of Taxability, a final and unappealable determination by a court of competent jurisdiction or a final determination of an administrative agency that is not reviewable by a court of competent jurisdiction that interest on all of the Series 1994 Bonds shall continue to be excludable from gross income for federal income tax purposes; or (4) obtained a final and unappealable determination by a court of competent jurisdiction or a final determination by an administrative agency that is not reviewable by a court of competent jurisdiction confirming the occurrence of such Series 1994 Determination of Taxability. For purposes of the foregoing, the Lessee shall be deemed to have contested such Series 1994 Determination of Taxability if it proceeds to annul or reverse the occurrence of such Series 1994 Determination of Taxability or to obtain a determination by a court of competent jurisdiction that no Series 1994 Event of Taxability has occurred. "Series 1994 Event of Taxability" means either (i) the failure of the Lessee or the Authority to observe any covenant or agreement contained in the Agreement, this Indenture or 7 the Series 1994 Tax Representation Certificate, (ii) the misrepresentation of any representation or warranty contained in the Agreement, this Indenture or the Series 1994 Tax Representation Certificate, or (iii) the taking of any action by any tenant of the Special Facilities pursuant to a reletting of the Special Facilities in accordance with Section 1404 of the Agreement, any of the foregoing of which results in the interest on any of the Series 1994 Bonds being includable in the gross income of any Owner thereof for federal income tax purposes, other than an Owner who is a "substantial user" (as such term is defined in Section 147(a) of the Code) of the Special Facilities financed with the proceeds of the Series 1994 Bonds or a Related Person. "Series 1994 Guaranty" means the Series 1994 Guaranty, dated as of the date hereof, from the Lessee to the Trustee, as the same may be amended and supplemented from time to time. "Series 1994 Tax Representation Certificate" means the tax representation certificate executed by the Lessee dated the date of issuance of the Series 1994 Bonds. "Series 1994 Underwriting Agreement" means the Underwriting Agreement between the Authority and the Underwriter, providing for the purchase of the Series 1994 Bonds. "Series Indenture" means the Supplemental Indenture providing for the issuance of any particular Series of Bonds that is required to be adopted prior to the issuance of any Series. "Special Record Date" for the payment of any defaulted interest on Bonds means a date fixed by the Trustee for such payment. "State" means the State of Indiana. "Supplemental Agreement" means any amendment of or supplement to the Agreement entered into pursuant to Article XII of this Indenture. "Supplemental Indenture" means any amendment of or supplement to this Indenture entered into pursuant to Article XI of this Indenture, including each Series Indenture. "Term Bonds" means all of the Series 1994 Bonds and, with respect to any Additional Bonds, the Additional Bonds that are designated as Term Bonds in the applicable Series Indenture. "Trust Estate" means: (a) All moneys on deposit in the Construction Fund and the Bond Fund and the earnings thereof; 8 (b) The Special Facilities Rentals; (c) All amounts payable pursuant to the Series 1994 Guaranty; (d) All rights granted to the Trustee to enforce certain provisions of the Agreement pursuant to Section 1402 thereof; and (e) All additional items of collateral pledged pursuant to any Supplemental Indenture to the Trustee to secure payment of the Bonds. "Trustee" means the Trustee at the time serving as such under this Indenture, which shall initially mean NBD BANK, N.A. and all other successors thereto. "Underwriter" means, with respect to the Series 1994 Bonds, CS First Boston Corporation, as senior manager for the underwriters identified in the Series 1994 Underwriting Agreement and, with respect to any Additional Bonds, the initial purchaser or purchasers of such Additional Bonds. Section 102. RULES OF CONSTRUCTION. (a) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words used herein shall include the plural as well as the singular number. The word "person" shall include corporations, firms, associations, partnerships, joint ventures, joint stock companies, trusts, unincorporated organizations, and public bodies, as well as natural persons. (b) When used in connection with the amounts on deposit in or to be deposited in any Fund or Account created hereunder, the word "money" shall include Investment Obligations. (c) All references herein to particular articles or sections are references to articles or sections of this Indenture unless some other reference is indicated. (d) All references to the Authority or any action of the Authority are references to the Authority as owner of the Special Facilities and shall not be deemed to refer to the Authority in any other proprietary or governmental capacity unless the context otherwise requires. Section 103. GENERAL ORDINANCE. The Bonds issued under this Indenture shall constitute special purpose facility bonds under the provisions of General Ordinance No. 6-1985 of the Authority. 9 ARTICLE II DETAILS OF BONDS Section 201. AUTHORIZED AMOUNT OF BONDS. No Bonds may be issued under this Indenture except in accordance with the provisions of this Article. The principal amount of the Series 1994 Bonds (other than Series 1994 Bonds issued in substitution therefor pursuant to Section 207 hereof) that may be issued is $237,755,000. Additional Bonds may be issued as provided in Section 211 hereof. Each Series Indenture shall set forth the appropriate details of the Bonds issued pursuant to such Series Indenture. The principal of, the interest on and the premium, if any, on all Bonds issued under the provisions of this Indenture shall be payable solely from the moneys and assets pledged by this Indenture for their payment. All covenants, agreements and provisions of this Indenture shall be for the benefit and security of all present and future Owners without preference, priority or distinction as to lien or otherwise, except as otherwise hereinafter provided or as provided in any Series Indenture, of any one Bond over any other Bond by reason of priority in the issue, sale or negotiation thereof, or otherwise. Section 202. AUTHORIZATION OF SERIES 1994 BONDS. There shall be issued under and secured by this Indenture the Series 1994 Bonds of the Authority for the purpose of providing funds, together with other available funds, to (i) pay the cost of the construction, acquisition and installation of the Special Facilities, (ii) fund capitalized interest on the Series 1994 Bonds, and (iii) pay the costs of issuance of the Series 1994 Bonds. The Series 1994 Bonds shall be designated "Indianapolis Airport Authority Special Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project)," shall be dated October 1, 1994, shall be numbered R-1 and upward, shall be issued in denominations of $5,000 and integral multiples thereof, shall be in such aggregate principal amounts and shall bear interest, payable semiannually on each Interest Payment Date, at the rate of interest equal to seven and one-tenth percent (7.10%) per annum based upon a three hundred sixty (360) day year consisting of twelve (12) thirty (30) day months and shall mature (subject to the right of prior redemption as hereinafter set forth) on January 15, 2017. Section 203. PAYMENT ON SERIES 1994 BONDS. Each Series 1994 Bond shall bear interest from the Interest Payment Date next preceding the date on which it is authenticated, unless it is (a) authenticated after a Regular Record Date, but on or prior to the Interest Payment Date with respect thereto, in which event it shall bear interest from such Interest Payment Date, or (b) authenticated on or prior to the first Regular Record Date, in which event it shall bear interest from October 1, 1994; provided, however, that if at the time of authentication any Series 1994 Bond interest is in default, such Series 1994 Bond shall bear interest from the date to which interest has been paid. 10 The principal of, premium, if any, and the interest on the Series 1994 Bonds shall be payable in any coin or currency of the United States of America which on the respective dates of payment thereof is legal tender for the payment of public and private debts. The principal of all the Series 1994 Bonds shall be payable at the corporate trust operations office of the Trustee. Payment of the principal of all the Series 1994 Bonds shall be made upon the presentation and surrender of the Series 1994 Bonds as the same shall become due and payable. Subject to the provisions of Subsection 208(b) hereof, interest on any Series 1994 Bond shall be paid by check mailed on the Interest Payment Date to the person in whose name that Series 1994 Bond is registered at the close of business on the Regular Record Date for such Interest Payment Date, except that interest will be transmitted by wire transfer on such Interest Payment Date to Owners of one million dollars ($1,000,000) or more in aggregate principal amount of Series 1994 Bonds as of the close of business on such Regular Record Date which shall have provided written notice to the Trustee not less than 15 days before such Regular Record Date of their wire transfer addresses in the continental United States; provided that payments to a Depository for book-entry only Bonds shall be made in immediately available funds on such Interest Payment Date. In connection with any overdue interest, or interest on any overdue amount, or in connection with any optional or mandatory redemption on a date that is other than an Interest Payment Date, the Trustee will establish a Special Record Date not more than thirty days prior to the date set for payment. The Trustee will mail notice of a Special Record Date to the Owners at least ten days prior to the Special Record Date. Section 204. EXECUTION AND FORM OF SERIES 1994 BONDS. All Series 1994 Bonds shall be signed by, or bear the facsimile signatures of, the President and Secretary of the Authority, and the official seal of the Authority shall be impressed, or a facsimile thereof imprinted, on the Series 1994 Bonds. In case any officer whose signature or a facsimile of whose signature appears on any Series 1994 Bonds ceases to be such officer before the delivery of such Series 1994 Bonds, such signature or such facsimile nevertheless shall be valid and sufficient for all purposes the same as if he had remained in office until such delivery, and any Series 1994 Bond may bear the facsimile signature of, or may be signed by, such as at the actual time of the execution of such Series 1994 Bond are the proper officers to execute such Series 1994 Bond although at the date of such Series 1994 Bond such persons may not have been such officers. The Series 1994 Bonds issued under this Indenture shall be substantially in the form herein set forth with such variations, omissions and insertions as are permitted or required by this Indenture or deemed necessary by the Trustee. Section 205. AUTHENTICATION OF SERIES 1994 BONDS. Only such Series 1994 Bonds as have endorsed thereon a certificate of authentication substantially in the form provided herein and duly executed as provided herein shall be entitled to any benefit or security under this 11 Indenture. No Series 1994 Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication on the Series 1994 Bond has been duly executed and dated as provided in the Indenture, and such certificate upon any such Series 1994 Bond shall be conclusive evidence that such Series 1994 Bond has been duly authenticated and delivered under this Indenture. The certificate of authentication on any Series 1994 Bond shall be deemed to have been duly executed and dated if signed by an authorized officer of the Trustee but it shall not be necessary that the same officer sign the certificate of authentication on all of the Series 1994 Bonds. Section 206. DELIVERY OF SERIES 1994 BONDS. Upon the execution and delivery of this Indenture, the Authority shall execute and deliver to the Trustee the Series 1994 Bonds. The Trustee shall authenticate such Series 1994 Bonds and deliver them to the Underwriter upon receipt of: (a) An executed or conformed copy of this Indenture; (b) A certified copy of the ordinance adopted and approved by the Authority authorizing the execution and delivery of this Indenture, the Agreement and the issuance of the Series 1994 Bonds; (c) A written request of the Authority to the Trustee requesting the Trustee to authenticate and deliver the Series 1994 Bonds to the Underwriter; (d) The proceeds of the issuance of the Series 1994 Bonds in the amount required by the Series 1994 Underwriting Agreement; (e) An executed or conformed copy of the Agreement; and (f) An executed or conformed copy of the Series 1994 Guaranty. The proceeds of the Series 1994 Bonds shall be paid over to the Trustee and deposited to the credit of the various funds as hereinafter provided under Section 401 and Section 501 hereof. Section 207. EXCHANGE OF SERIES 1994 BONDS. Series 1994 Bonds, upon surrender thereof at the corporate trust office of the Trustee, together with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Trustee, may, at the option of the Owner thereof, be exchanged for an equal aggregate principal amount of Series 1994 Bonds of the same maturity, of any denomination or denominations authorized by the Indenture, bearing interest at the same rate and in the same form as the Series 1994 Bonds surrendered for exchange. Each Series 1994 Bond delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Series 1994 Bond shall carry all the 12 rights to interest accrued and unpaid, and to accrue which were carried by such other Series 1994 Bond and each such Series 1994 Bond shall bear interest from such date, that neither gain nor loss in interest shall result from such transfer, exchange or substitution. The Authority shall make provision for the exchange of Series 1994 Bonds at the corporate trust office of the Trustee. Section 208. NEGOTIABILITY AND REGISTRATION OF TRANSFER OF SERIES 1994 BONDS. (a) The Trustee shall keep books for the registration and the registration of transfer of the Series 1994 Bonds. Said registration books shall be available at all reasonable times for inspection by the Authority and by an Owner who shall own at least 10% in aggregate principal amount of Series 1994 Bonds then outstanding hereunder and may be copied by either of the foregoing and their agents or representatives. The transfer of any Series 1994 Bond may be registered only upon the books kept by the Trustee for the registration of transfer of Series 1994 Bonds upon presentation thereof to the Trustee together with an assignment duly executed by the Owner or his attorney or legal representative in such form as shall be satisfactory to the Trustee. No transfer of any Series 1994 Bond shall alter the ownership of such Series 1994 Bond for purposes of this Indenture unless such transfer is registered with the Trustee. Upon any such registration of transfer, the Authority shall, if necessary, execute and the Trustee shall authenticate and deliver in exchange for such Series 1994 Bond a new Series 1994 Bond or Series 1994 Bonds, registered in the name of the transferee, of any denomination or denominations authorized by this Indenture. In all cases in which Series 1994 Bonds shall be exchanged or the transfer of Series 1994 Bonds shall be registered hereunder, the Authority shall if necessary, execute and the Trustee shall authenticate and deliver at the earliest practicable time Series 1994 Bonds in accordance with the provisions of this Indenture. All Series 1994 Bonds surrendered in any such exchange or registration of transfer shall forthwith be cancelled by the Trustee. No service charge shall be made for any registration, transfer, or exchange of Series 1994 Bonds, but the Authority and the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Series 1994 Bonds. Neither the Authority nor the Trustee shall be required (i) to transfer or exchange Series 1994 Bonds during a period beginning at the opening of business fifteen (15) days before the day of the first mailing of a notice of redemption of Series 1994 Bonds and ending at the close of business on the day of such mailing or (ii) to transfer or exchange any Series 1994 Bond so selected for redemption in whole or in part. (b) Anything contained in this Indenture to the contrary notwithstanding, all of the Series 1994 Bonds shall be issued by means of the book-entry system provided for in the DTC Letter of Representations. During the period that such book-entry system is used for the Series 13 1994 Bonds, one Bond certificate (or such other number of certificates as may be required by or acceptable to the Depository) in the aggregate principal amount of such Series 1994 Bonds will be issued, registered as provided by the rules of the book-entry system, and required to be deposited with the Depository and immobilized in its custody. The book-entry system will evidence beneficial ownership of such Series 1994 Bonds in the principal amount of five thousand dollars ($5,000) or any multiple thereof, with transfers of ownership effected on the records of the Depository and its system pursuant to rules and procedures established by the Depository and its system. (c) If either (i) the Authority or the Trustee receives notice from the Depository that is currently the Owner of the Series 1994 Bonds to the effect that such Depository is unable or unwilling to discharge its responsibility as a Depository for the Series 1994 Bonds or, (ii) the Authority elects with the prior written consent of the Lessee to discontinue its use of such Depository as a Depository for the Series 1994 Bonds and the Authority fails to establish a securities depository/book-entry system relationship with another Depository, then the Authority and the Trustee each shall do or perform or cause to be done or performed all acts or things, not adverse to the rights of the Owners of the Series 1994 Bonds, as are necessary or appropriate to discontinue use of such Depository as a Depository for the Series 1994 Bonds and to transfer the ownership of each of the Series 1994 Bonds to such person or persons, including any other Depository, as the Owners of the Series 1994 Bonds may direct in accordance with this Indenture. Any expenses of such discontinuance and transfer, including expenses of printing new certificates to evidence the Series 1994 Bonds, shall be paid by the Lessee. Section 209. OWNERSHIP OF SERIES 1994 BONDS. The person in whose name any Series 1994 Bond is registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of and premium, if any, and interest on, any such Series 1994 Bond shall be made only to or upon the order of the Owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 1994 Bond to the extent of the sum or sums so paid. Section 210. MUTILATED, DESTROYED, LOST OR STOLEN SERIES 1994 BONDS. The Authority shall cause to be executed, and the Trustee shall deliver a new Series 1994 Bond of like date, number and tenor in exchange and substitution for and upon the cancellation of any mutilated Series 1994 Bond, or in lieu of and in substitution for any destroyed, lost or stolen Series 1994 Bond, and the Owner shall pay the reasonable expenses and charges of the Authority in connection therewith. Prior to the delivery of a substitute Series 1994 Bond the Owner of any Series 1994 Bond which was destroyed, lost or stolen, shall file with the Trustee evidence satisfactory to it of the destruction, loss or theft of such Series 1994 Bond and of the Owner's ownership thereof and shall furnish to the Authority and to the Trustee such security or indemnity as may be required by them to save each of them harmless from all risks, however remote. 14 Every Series 1994 Bond issued pursuant to the provisions of this Section 210 in exchange or substitution for any Series 1994 Bond which is mutilated, destroyed, lost or stolen shall constitute a separate contractual obligation of the Authority, whether or not the destroyed, lost or stolen Series 1994 Bonds are found at any time or are enforceable by anyone, and shall be entitled to all the benefits and security hereof equally and proportionately with any and all other Series 1994 Bonds duly issued under this Indenture. Section 211. ADDITIONAL BONDS. (a) In addition to the Series 1994 Bonds, Bonds may be issued under this Indenture to (i) finance the completion of the Special Facilities or (ii) refund any Bonds issued under this Indenture. Except as to any differences in the maturities thereof, the rate or rates of interest applicable thereto, and the provisions for redemption, all such Bonds shall be on a parity with and shall be entitled to the same benefit and security of this Indenture, including, in particular, the pledge of the Trust Estate. (b) Additional Bonds shall be executed substantially in the form and in the manner hereinabove set forth and shall be deposited with the Trustee for authentication, but before the Bonds shall be authenticated and delivered to the Trustee for delivery to the purchasers thereof, there will be filed with the Trustee the following: (i) a copy, certified by the Secretary of the Authority, of the Series Indenture executed by the Authority for such Additional Bonds, which shall provide for the issuance of such Additional Bonds, the application of the proceeds thereof for the purposes intended and the pledge of the Trust Estate with respect thereto; (ii) a copy, duly certified by the Secretary of the Authority, of the ordinance adopted and approved by the Authority authorizing the execution and delivery of the applicable Series Indenture authorizing the execution and delivery of such Series Indenture and the issuance of such Additional Bonds; (iii) a written statement signed by an Authorized Lessee Representative: (1) approving the terms, conditions, manner of issuance, purchase price, delivery and contemplated disposition of the proceeds of the sale of such Additional Bonds and (2) certifying that there exists no Event of Default under Section 802 hereof; (iv) an executed counterpart of a Supplemental Agreement providing for the use of the proceeds of the sale of such Additional Bonds and for the 15 payment by the Lessee of an increased amount of Special Facilities Rentals attributable to the issuance of such Series of Additional Bonds; (v) an opinion of counsel for the Lessee, which counsel may be an employee of the Lessee, as to (1) the full corporate power and authority of the Lessee to execute, deliver and perform the Supplemental Agreement, and (2) the authorization, execution and delivery of the Supplemental Agreement in connection with the issuance of such Additional Bonds and its legality, validity, binding effect and enforceability as to the Lessee, subject to customary exceptions acceptable to the Authority; (vi) an executed counterpart of a guaranty from the Lessee to the Trustee executed in connection with the issuance of such Additional Bonds, which guaranty and payments made pursuant thereto shall upon the issuance of such Additional Bonds become a part of the Trust Estate and in which guaranty the Lessee shall unconditionally guarantee the full and prompt payment to the Trustee of the principal of and premium, if any, and interest on such Additional Bonds; (vii) an opinion of Bond Counsel to the effect that the issuance of such Additional Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on any Tax Exempt Bonds received by any Owner; and (viii) such other documents as are required to be delivered to the Trustee pursuant to the Indenture. (c) When the documents mentioned in subsection (b) shall have been filed with the Trustee and when the Additional Bonds shall have been executed and authenticated as required by this Indenture, the Trustee shall deliver the Additional Bonds to or upon the order of the purchasers named in the Series Indenture mentioned in subsection (b) but only upon payment to the Trustee of the purchase price of the Additional Bonds and the accrued interest, if any, thereon. The Trustee shall be entitled to rely upon the Series Indenture as to all matters stated therein. The proceeds (including accrued interest) of the Additional Bonds shall be applied simultaneously with the delivery of such Additional Bonds by the Trustee as provided in the Series Indenture. Each Series of Additional Bonds shall be stated to mature, subject to the right of prior redemption as provided therein, on the date or dates and year or years as specified therein. 16 ARTICLE III REDEMPTION Section 301. REDEMPTION GENERALLY. The Bonds of any Series issued under this Indenture may be made subject to redemption at such time and prices, upon such terms and conditions and with such effect as may be provided hereby or by the Series Indenture authorizing the issuance of such Bonds. Section 302. REDEMPTION OF PORTION OF BONDS. If less than all of an Outstanding Bond is selected for redemption, the Owner thereof or his attorney or legal representative shall present and surrender such Bond to the Trustee for payment of the principal amount thereof so called for redemption, and the redemption premium, if any, on such principal amount, and the Authority shall, if necessary, execute and the Trustee shall authenticate and deliver to or upon the order of such Owner or his attorney or legal representative, without charge, for the unredeemed portion of the principal amount of the Bond so surrendered, a new Bond of the same Series and maturity, bearing interest at the same rate and of any denomination or denominations authorized by this Indenture. Section 303. CANCELLATION. Bonds presented and surrendered in accordance with the provisions of this Article shall be cancelled upon the surrender thereof. Section 304. REDEMPTION OF SERIES 1994 BONDS. (a) The Series 1994 Bonds shall not be subject to prior redemption except as provided in this Section 304. (b) Series 1994 Bonds are subject to optional redemption by the Authority upon the receipt of a written direction of the Lessee to exercise such option, in whole or in part, on any date on or after July 15, 2004 at a Redemption Price expressed as a percentage of the principal amount of Series 1994 Bonds being redeemed shown below, plus accrued interest to the date of redemption: Redemption Dates Redemption Price ---------------- ---------------- July 15, 2004 through July 14, 2005 102% July 15, 2005 through July 14, 2006 101 July 15, 2006 and thereafter 100 17 (c) The Series 1994 Bonds shall not be subject to mandatory sinking fund redemption. (d) The Series 1994 Bonds are subject to special optional redemption at the election of the Lessee, in whole or in part as permitted under the Agreement, at a redemption price equal to one hundred percent (100%) of the principal amount thereof, without premium, plus accrued interest to the date of redemption, from the Net Proceeds with respect to the Special Facilities and other amounts deposited into the Series 1994 Account of the Bond Fund in accordance with Sections 1101 and 1102 of the Agreement on the earliest practicable date selected by the Trustee after such deposit. (e) The Series 1994 Bonds are subject to mandatory redemption by the Authority, in part, at a redemption price equal to one hundred percent (100%) of the principal amount thereof, without premium, plus accrued interest to the redemption date, from amounts that are deposited to the Series 1994 Account of the Bond Fund from the Series 1994 Account of the Construction Fund pursuant to Subsection 402(b) of this Indenture on the earliest practicable date selected by the Trustee after such deposit. (f) The Series 1994 Bonds are subject to mandatory redemption by the Authority in whole on any date at a Redemption Price equal to one hundred percent (100%) of the principal amount thereof, plus accrued interest to the date of redemption upon a Series 1994 Determination of Taxability. Such redemption shall occur on a date selected by the Lessee, which shall be not later than 120 days after the Series 1994 Determination of Taxability. (g) The Series 1994 Bonds are subject to mandatory redemption by the Authority in whole at a Redemption Price equal to one hundred percent (100%) of the principal amount thereof, plus accrued interest to the date of redemption on any date selected by the Authority which shall be not more than sixty (60) days after the Authority notifies the Trustee of the Authority's election to terminate the Agreement pursuant to Section 808 of the Agreement. (h) If, pursuant to Subsection 401(b) of the Agreement, the termination date of the Agreement is determined to be prior to the stated maturity date of the Series 1994 Bonds, the Series 1994 Bonds are subject to mandatory redemption by the Authority in whole at a redemption price of one hundred percent (100%) of the principal amount thereof, plus accrued interest to the date of redemption on the Business Day prior to the final day of the term of the Agreement. Section 305. SELECTION OF SERIES 1994 BONDS TO BE REDEEMED. The Series 1994 Bonds shall be redeemed only in whole multiples of $5,000 principal amount. If less than all of the Series 1994 Bonds are to be called for redemption, the Trustee shall select the Series 1994 Bonds to be redeemed by lot, each $5,000 portion of principal being counted as one Bond for this 18 purpose; provided that so long as the Series 1994 Bonds are held by a Depository in a book-entry system, the Depository shall select the Series 1994 Bonds to be redeemed. Section 306. REDEMPTION NOTICE. Not more than sixty (60) nor less than thirty (30) days before the redemption date of any Series 1994 Bonds to be redeemed, whether such redemption be in whole or in part, the Authority shall cause a notice of such redemption to be filed with the Trustee and to be mailed, postage prepaid, to the Owner of each Series 1994 Bond to be redeemed in whole or in part at his address appearing upon the registration books maintained pursuant to Section 208 hereof. Prior to giving notice of a redemption pursuant to Subsections 304(d), 304(e) or 304(g) hereof, the Trustee shall determine that there are sufficient funds on deposit in the Series 1994 Account of the Bond Fund for such purpose. Upon the proper giving of such notice, the redemption shall be irrevocable. With respect to a redemption pursuant to Subsections 304(b), 304(f) or 304(h) hereof, it shall not be a condition precedent to the giving of such notice that the redemption price be on deposit in the Series 1994 Account of the Bond Fund. Upon the proper giving of notice with respect to a redemption pursuant to Subsections 304(f) or 304(h), the redemption shall be irrevocable. In the event of a redemption pursuant to Subsection 304(b) hereof, the notice shall state that the Lessee may elect prior to 5:00 p.m. Indianapolis time on the Business Day next preceding the date fixed for redemption to not proceed with such redemption. Failure to mail such notice or any defect therein shall not affect the validity of the redemption as regards Owners to whom such notice was given as required hereby. Each such notice shall set forth the date designated for redemption and the redemption price to be paid. Each such notice to the Owners thereof shall also set forth, if less than all of the Series 1994 Bonds then Outstanding shall be called for redemption, the distinctive numbers and letters, if any, of such Series 1994 Bonds to be redeemed and, in the case of any Series 1994 Bond to be redeemed in part only, the portion of the principal amount thereof to be redeemed. If any Series 1994 Bond is to be redeemed in part only, the notice of redemption shall state also that on or after the redemption date, upon surrender of such Series 1994 Bond, a new Series 1994 Bond or Series 1994 Bonds in principal amount equal to the unredeemed portion of such Series 1994 Bond will be issued. On the date fixed for redemption, notice having been given as aforesaid, the Series 1994 Bonds or portions thereof so called for redemption shall be due and payable at the redemption price established for the redemption of such Series 1994 Bonds or portions thereof on such date and, if on the date fixed for redemption moneys are held by the Trustee in the Series 1994 Account of the Bond Fund sufficient to pay the redemption price, interest on the Series 1994 Bonds or portions thereof so called for redemption shall cease to accrue on the redemption date. Notwithstanding the foregoing, in the event of redemption pursuant to Subsection 304(b) hereof, the Series 1994 Bonds fixed for redemption shall not be due and payable on the date fixed for redemption if the Lessee shall give written notice to the Trustee and the Authority on or before 5:00 p.m. Indianapolis time on the Business Day next preceding the date fixed for redemption of its election not to proceed with such optional redemption. 19 ARTICLE IV DEPOSIT OF SERIES 1994 BOND PROCEEDS, CONSTRUCTION FUND Section 401. CONSTRUCTION FUND. A special fund is hereby established with the Trustee and designated the "Construction Fund." Unless otherwise prohibited from doing so, and except as provided in Section 501, any proceeds of the Series 1994 Bonds (other than accrued interest) shall be deposited immediately upon their receipt in the Series 1994 Account of the Construction Fund. The money in the Construction Fund and any Accounts therein shall be held by the Trustee in trust and, pending application thereof shall, to the extent permitted by law, be subject to a lien and charge in favor of the Trustee and the Owners of Bonds under this Indenture and shall be held for the security of the Owners. Section 402. PAYMENTS FROM CONSTRUCTION FUND. (a) The Trustee shall disburse moneys held within the Series 1994 Account of the Construction Fund from time to time to or upon the order of the Lessee in order to pay, or as reimbursement to the Authority or the Lessee for payment made, the costs of the Special Facilities, or for payment of interest on the Series 1994 Bonds, in each case upon receipt by the Trustee of a written request of the Lessee substantially in the form set forth in EXHIBIT D hereof. For the purpose of this Indenture, the costs of the Special Facilities shall include such costs as are eligible costs within the purview of the Act and are permissible for financing of airport facilities pursuant to Section 142(a)(1) of the Code. (b) DISPOSITION OF SERIES 1994 ACCOUNT MONEYS UPON COMPLETION OF CONSTRUCTION. If, after payment by the Trustee of all orders tendered to the Trustee under the provisions of subsection (a) of this Section 402, except for orders that are the subject of a disputed claim, and upon receipt by the Trustee of a certificate of the Lessee to the effect that the Special Facilities are complete and the Lessee is of the opinion that the Special Facilities have been fully paid for, except for any disputed claims, there shall remain any balance of moneys in the Series 1994 Account of the Construction Fund, such money in excess of amounts necessary to pay any disputed claims shall be used pursuant to a written direction of the Authorized Lessee Representative delivered to the Trustee (i) for the redemption of the Series 1994 Bonds, or a portion thereof, in accordance with Section 304(e) hereof, at the earliest practicable date selected by the Trustee; (ii) to acquire, construct, install, improve and equip such additional real and personal property in connection with the Special Facilities as are designated by the Authorized Lessee Representative as permissible costs of the Special Facilities; or (iii) for a combination of any or all of the foregoing as is provided in such direction, in each case subject to an opinion of Bond Counsel to the effect that such application of such moneys will not adversely affect the 20 exclusion from gross income for federal tax purposes of the interest on any Tax Exempt Bonds received by any Owner. The amounts to be used for redemption of the Series 1994 Bonds shall be immediately deposited in the Series 1994 Account of the Bond Fund after the receipt of such direction. (c) DISPOSITION OF FUNDS UPON COMPLETION AND FINAL PAYMENT CERTIFICATE. Any funds remaining on deposit in the Construction Fund upon the delivery of the certificate required by Subsection 305(a) of the Agreement shall be disposed of in the manner described in subsection (b) of this Section 402. Section 403. RELIANCE UPON REQUISITIONS. All requisitions submitted substantially in the form of Exhibit D hereto and opinions received by the Trustee as conditions of payment from the Series 1994 Account of the Construction Fund may be relied upon by the Trustee. Such requisitions and opinions shall be retained by the Trustee for a period of time not less than that required by the law of the State for the retention of the Authority's records and shall be subject at all reasonable times to examination by the Authority and the Owners of Bonds then Outstanding. Section 404. NET PROCEEDS ACCOUNT. If and when Net Proceeds with respect to the Special Facilities are received by the Trustee to be used to repair, rebuild or restore the Special Facilities pursuant to Article XI of the Agreement, the Trustee shall create a special account in the Construction Fund to be designated the Net Proceeds Account into which such Net Proceeds shall be deposited. The Net Proceeds Account shall be applied in accordance with Article XI of the Agreement. 21 ARTICLE V REVENUES AND FUNDS Section 501. ESTABLISHMENT OF FUNDS. (a) In addition to the Construction Fund, there is hereby established with the Trustee the Bond Fund and within the Bond Fund a Series 1994 Account. (b) The money in the Construction Fund and the Bond Fund shall be held in trust and applied as hereinafter provided. Pending such application, the money in the Bond Fund shall be subject to a lien and encumbrance in favor of the Owners of all Bonds Outstanding. (c) Each Series Indenture may provide for the creation of a separate account within the Construction Fund and Bond Fund with respect to each Series of Bonds, which accounts shall bear the designation of such Series of Bonds. Section 502. DEPOSITS TO BOND FUND. (a) In addition to the deposit of any accrued interest received on the Series 1994 Bonds, which shall be deposited into the Series 1994 Account of the Bond Fund, the Trustee shall deposit into the Series 1994 Account of the Bond Fund upon receipt, all Special Facilities Rentals paid under the Agreement with respect to the Series 1994 Bonds, all payments received under the Series 1994 Guaranty and all amounts to be transferred thereto pursuant to Subsections 402(b) and (c) hereof. The Trustee shall also deposit into the Bond Fund all Net Proceeds to be used in the redemption of Bonds pursuant to paragraph (ii) of Subsection 1101(a) or paragraph (iii) of Subsection 1102(a) of the Agreement, and upon acceleration of the Bonds pursuant to Section 803 hereof, shall transfer to the Bond Fund all funds on deposit in the Construction Fund. (b) On or before the forty-fifth (45th) day next preceding any date on which Bonds of a Series are to mature or are to be redeemed, the Authority or the Lessee may satisfy all or a portion of the Authority's obligation to make the payments with respect to the principal on the Bonds of such Series required by paragraph (a) of this Section 502 by delivering to the Trustee Bonds of such Series maturing or required to be redeemed on such date. The price paid to purchase any such Bond shall not exceed the Redemption Price plus accrued interest to the date of purchase applicable to such Bonds at the next redemption date. Upon such delivery the Authority shall receive a credit against amounts required to be deposited into the Bond Fund on account of such Bonds. Section 503. APPLICATION OF MONEY IN THE BOND FUND. Not later than 10:00 a.m. Indianapolis time on each Interest Payment Date, date for the payment of defaulted interest, date upon which Bonds are to be redeemed, date of acceleration of Bonds or on such other date as may be specified herein, the Trustee shall withdraw from the respective account of the Bond 22 Fund the amounts required for paying interest, principal and redemption premiums, if any, on the respective Series of Bonds, subject to the provisions of Section 806 hereof. The Trustee shall remit the amount due and payable to the Owners as provided herein. Section 504. NONPAYMENT ON BONDS. All money that the Trustee shall have withdrawn from the Bond Fund or shall have received from any other source and set aside for the purpose of paying any of the Bonds hereby secured, either at maturity or by purchase or call for redemption, shall be held in trust for the respective Owners. Any money that is so set aside and that remains unclaimed by the Owners for a period of five (5) years after the date on which such Bonds have become payable shall be paid to the Lessee and thereafter the Owners shall look only to the Lessee for payment and then only to the extent of the amounts so received, without any interest thereon, and the Trustee shall have no responsibility with respect to such money. Section 505. CANCELLATION OF BONDS. Upon receipt of the same, the Trustee shall cancel all Bonds paid, redeemed or purchased by the Trustee or purchased by the Authority or the Lessee and delivered to the Trustee, and all Bonds delivered to the Trustee in exchange for other Bonds or delivered to the Trustee upon the transfer of any Bond if a new Bond is delivered upon such transfer. The Trustee shall certify to the Authority and the Lessee the details of all Bonds so cancelled. All Bonds cancelled under any of the provisions of this Indenture shall be destroyed by the Trustee, unless otherwise directed by the Authority. Upon destruction of any Bonds, the Trustee shall execute a certificate in triplicate, describing the Bonds so destroyed; and executed certificates shall be filed with the Authority and the Lessee and the third executed certificate shall be retained by the Trustee. Section 506. DISPOSITION OF FUND BALANCES. After provision is made for the payment of all Outstanding Bonds issued under this Indenture, including the interest thereon and for the payment of all other obligations, expenses and charges required to be paid under or in connection with this Indenture, and receipt by the Trustee of a certificate of the Authority to the effect that there are no other indentures, ordinances, bond ordinances, or other agreements that impose a continuing lien on the balances hereinafter mentioned, subject to the provisions of Section 504 hereof, the Trustee shall pay all amounts in any Fund or Account then held by it under this Indenture to the Lessee. If a continuing lien has been imposed on any such balance by another indenture, ordinance, any other agreement, by court order or decree, or by law, the Trustee shall pay such balance to such person as is entitled to receive the same by law or under the terms of such indenture, ordinance, agreement, court order, or decree. Section 507. SECURITY FOR THE BONDS. As security for the payment of the Bonds and the interest thereon, the Authority hereby grants to the Trustee a pledge of the Trust Estate. 23 It is the intent of the Authority that this pledge shall be effective and operate immediately and that the Trustee shall have the right to collect and receive the Trust Estate in accordance with the provisions hereof at all times during the period from and after the date of delivery of the Bonds issued hereunder until the Bonds have been fully paid and discharged, including, without limitation, at all times after the institution and during the pendency of bankruptcy or similar proceedings. The aforementioned pledge shall not inhibit the sale or disposition of all or any portion of the Special Facilities in accordance with this Indenture and the Agreement or the termination of the Agreement in accordance with the provisions thereof, and shall not impair or restrict the ability of the Authority to invest in securities and other forms of investment, subject to the provisions of this Indenture. Prior to the delivery of any Bonds issued hereunder, there shall be delivered to the Trustee a duly executed financing statement evidencing the prior security interest in the Trust Estate in the form required by the Indiana Uniform Commercial Code with copies sufficient in number for filing in the office of the Secretary of State of Indiana. 24 ARTICLE VI SECURITY FOR DEPOSITS, INVESTMENT OF FUNDS Section 601. SECURITY FOR DEPOSITS. Any and all money received by the Trustee under the provisions of this Indenture shall be trust funds under the terms hereof, and, to the extent permitted by law in the case of the Construction Fund, shall not be subject to any lien or attachment by any creditor of the Authority or the Lessee other than the Trustee and the Owners. All money deposited with the Trustee that cannot be invested in Investment Obligations in accordance with Section 602 hereof, shall be guaranteed by the Federal Deposit Insurance Corporation or other federal agency or secured, for the benefit of the Authority, the Lessee and the Owners, either (a) by depositing with a bank or trust company chosen by the Trustee or, if then permitted by law, by setting aside under control of the trust department of the bank holding such deposit, as collateral security, Government Obligations or other marketable securities eligible as security for the deposit of trust funds under regulations of the Comptroller of the Currency of the United States or applicable State law or regulations, having a market value (exclusive of accrued interest) not less than the amount of such deposit, or (b) if the furnishing of security as provided in clause (a) above is not permitted by applicable law, then in such other manner as may then be required or permitted by applicable state or federal laws and regulations regarding the security for, or granting a preference in the case of, the deposit of trust funds; provided, however, that it shall not be necessary for the Trustee to give security for the deposit of any money with it for the payment of the principal of or the redemption premium or the interest on any Bonds, or for the Trustee to give security for any money that shall be represented by obligations purchased under the provisions of this Article as an investment of such money. All money deposited with the Trustee shall be credited to the particular Fund or Account to which such money belongs. Section 602. INVESTMENT OF MONEY. Money held for the credit of all Funds and Accounts shall be continuously invested and reinvested by the Trustee in Investment Obligations to the extent practicable. Investment Obligations shall mature or be redeemable at the option of the holder thereof not later than the respective dates when the money held for the credit of such Funds and Accounts will be required for the purposes intended. Notwithstanding the foregoing, no Investment Obligations pertaining to any Series in any Fund, Account may mature on a date beyond the latest maturity date of the respective Bonds Outstanding at the time such Investment Obligations are deposited. For purposes of this Section, the maturity date of any repurchase agreement shall be deemed to be the stated maturity date of such agreement and not the maturity dates of the underlying Investment Obligations. 25 The Lessee shall give to the Trustee written directions respecting the investment of any money required to be invested hereunder, subject, however, to the provisions of this Article, and the Trustee shall then invest such money as so directed. The Trustee may request in writing additional direction or authorization from the Lessee with respect to the proposed investment of money under the provisions of this Indenture. Upon receipt of such directions, the Trustee shall invest, subject to the provisions of this Article, such money in accordance with such directions. Investment Obligations acquired with money in or credited to any Fund or Account established under this Indenture shall be deemed at all times to be part of such Fund or Account. Unless otherwise directed in a Series Indenture, the interest accruing on Investment Obligations in the Funds and Accounts and all of its profit or loss realized upon the disposition or maturity of such Investment Obligations shall be credited to or charged against such Fund or Account. The Trustee shall sell at the best price obtainable or reduce to cash a sufficient amount of such Investment Obligations whenever it is necessary so to do to provide money to make any payment from any such Fund or Account. The Trustee shall not be liable or responsible for any loss resulting from any such investment. Whenever a transfer of money between two or more of the Funds or Accounts established pursuant to Article V hereof is permitted or required, such transfer may be made as a whole or in part by transfer of one or more Investment Obligations at a value determined at the time of such transfer in accordance with this Article VI, provided that the Investment Obligations transferred are those in which money of the receiving Fund or Account could be invested at the date of such transfer. 26 ARTICLE VII GENERAL COVENANTS AND REPRESENTATIONS Section 701. PAYMENT OF PRINCIPAL, INTEREST AND PREMIUM. (a) The Authority covenants that, solely from the sources herein provided, it shall cause to be paid, when due, the principal of (whether at maturity, by acceleration, by call for redemption or otherwise), the premium, if any, and interest on the Bonds at the places, on the dates and in the manner provided herein and in the Bonds, according to the intent and meaning thereof. (b) The Bonds are special obligations payable solely from the Trust Estate. The Bonds shall be secured as provided in Section 507 hereof. Except as provided herein, the Series 1994 Bonds shall not be payable from the funds of the Authority, nor shall they constitute a legal or equitable pledge, lien or encumbrance upon any of the properties of the Authority or upon any of its income, receipts or revenues, except as provided in this Indenture. The principal of, premium, if any, and interest on the Bonds shall not be payable from the taxing power of the Authority, nor shall the Bonds constitute a legal or equitable pledge, charge, lien, or encumbrance upon any of the Authority's property or upon any of its income, receipts or revenues, except as herein provided. Neither the credit nor the taxing power of the Authority are pledged for the payment of the principal or interest on the Bonds and no Owner has the right to compel the exercise of the taxing power by the Authority or the forfeiture of any of its property in connection with any default thereon. The Bonds and the interest thereon are not a debt of the Authority within the meaning of the State Constitution. The Bonds, including interest thereon, are payable solely from the revenues pledged therefor and the Authority is under no obligation to pay the Bonds, except from the revenues pledged therefor. The Trustee, by its acceptance of its duties hereunder, covenants that it will faithfully perform at all times all of its covenants, undertakings and agreements contained in this Indenture or in any Bond executed, authenticated and delivered hereunder or in any proceedings of the Authority pertaining thereto. Section 702. COVENANT TO PERFORM OBLIGATIONS UNDER THIS INDENTURE AND THE AGREEMENT. The Authority covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, the Bonds and in all proceedings of the Authority pertaining thereto. Section 703. FURTHER INSTRUMENTS AND ACTIONS. At the request of the Lessee or the Trustee, the Authority shall execute and deliver such further instruments or take such further actions as may be required to carry out the purposes of this Indenture and the Agreement. 27 Section 704. REPRESENTATIONS BY THE AUTHORITY. The Authority represents and warrants that it will: (i) not take any actions that would cause the interest on any Tax Exempt Bonds to no longer be excludable from gross income for federal tax purposes; and (ii) take such affirmative actions to protect the tax status of the Tax Exempt Bonds that the Lessee or the Trustee shall reasonably request in writing and certify as necessary to preserve the tax status of the Tax Exempt Bonds; provided that the Authority shall not be obligated to undertake any such action until (a) it consents in writing to take such action, which consent shall not be unreasonably withheld, (b) the Authority has been indemnified to its satisfaction with respect to such action and (c) provision has been made to reimburse the Authority for any costs incurred in connection with taking such action. Except as specifically provided above, the Authority shall have no obligation to take any affirmative actions to protect the tax status of the Tax Exempt Bonds and shall have no obligation to pay amounts necessary to comply with this covenant, other than from money received by the Authority from the Lessee. The Lessee shall have the sole responsibility for computing any amounts owed to the United States of America pursuant to Section 148 of the Code and with 615(b) of the Agreement with respect to Tax Exempt Bonds and providing for the payment of such amounts to the United States of America in the manner provided in the Series 1994 Tax Representation Certificate and the tax representation certificate executed contemporaneously with the issuance of any other Tax Exempt Bonds. 28 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 801. EXTENSION OF INTEREST PAYMENT. If the time for the payment of the interest on any Bond is extended, whether or not such extension is by or with the consent of the Authority, such interest so extended shall not be entitled in case of an Event of Default hereunder to the benefit or security of this Indenture and in such case the Owner of the Bond for which the time for payment of interest was extended shall be entitled only to the payment after payment in full of the principal of all Bonds then Outstanding and of interest for the principal of all Bonds then outstanding and of interest for which the time for payment shall not have been extended. Section 802. EVENTS OF DEFAULT. Each of the following events is hereby declared an "Event of Default:" (a) payment of the interest, principal of and premium, if any, on any of the Bonds is not made when the same are due and payable, either at maturity or by redemption or otherwise; (b) the filing by the Lessee of a voluntary petition in bankruptcy or the making of any assignment of all or any part of the Lessee's assets for the benefit of creditors; (c) the adjudication of the Lessee as a bankrupt pursuant to any involuntary bankruptcy proceedings; (d) the taking of jurisdiction by a court of competent jurisdiction of the Lessee or its assets pursuant to proceedings brought under the provisions of any Federal reorganization act; (e) the: (i) appointment of a receiver or a trustee of the Lessee's assets by a court of competent jurisdiction, or (ii) the filing of an involuntary petition in bankruptcy and, in either case, the failure of the Lessee to dismiss the same or reach a voluntary agreement with Lessee's creditors within ninety (90) days; (f) the Authority defaults in the due and punctual performance of any other of the covenants, conditions, agreements and provisions contained in the Bonds or in this Indenture and such default continues for sixty (60) days after receipt by the Authority and the Lessee of a written notice from the Trustee specifying such default and requesting that it be corrected, provided that if prior to the expiration of such sixty (60)-day period the Authority or the Lessee institutes action reasonably designed to cure such default, no Event of Default shall be deemed to have occurred upon the expiration of such sixty (60)- day period for so long as the Authority or the Lessee pursues such curative action with reasonable diligence; and 29 (g) the breach of any covenant, representation or warranty contained in the Series 1994 Guaranty. Section 803. ACCELERATION OF MATURITIES. Upon the happening and continuance of any Event of Default specified in Section 802, the Trustee may, and upon the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of Bonds Outstanding shall, by notice in writing to the Authority and the Lessee, declare the principal of all Bonds then Outstanding (if not then due and payable) to be due and payable immediately and upon such declaration the same shall become and be immediately due and payable, anything contained in the Bonds, the Agreement, the Series 1994 Guaranty or in this Indenture to the contrary notwithstanding. Section 804. ENFORCEMENT OF REMEDIES. Upon the happening and continuance of any Event of Default specified in Section 802, then and in every such case the Trustee may, and upon the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding shall, proceed to protect and enforce the rights of the Owners under federal or State law, under this Indenture, Section 1402 of the Agreement or the Series 1994 Guaranty by such suits, actions or specific performance of any covenant or agreement contained in this Indenture, the Series 1994 Guaranty or the Agreement (but only as contemplated by Section 1402 thereof) or in aid or execution of any power herein granted or for the enforcement of any proper legal or equitable remedy, as the Trustee shall deem most effectual to protect and enforce such rights. Section 805. THE TRUSTEE MAY FILE CLAIM IN BANKRUPTCY. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Authority or the Lessee or to property of the Authority or the Lessee or the creditors of either of them, the Trustee (irrespective of whether the principal of the Bonds shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Lessee for the payments equal to overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of principal, and premium, if any, and interest owing and unpaid in respect of the Bonds and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Owners allowed in such judicial proceedings; and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; 30 and any receiver, custodian, assignee, trustee, liquidator, sequestrator (or other similar official) in any such judicial proceeding is hereby authorized by each Owner to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Owners, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Article IX hereof. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceedings unless the Trustee shall certify that it has been so authorized by the holders of the requisite percentage of Outstanding Bonds. Section 806. PRO RATA APPLICATION OF FUNDS. Anything in this Indenture to the contrary notwithstanding, if at any time the money in the Bond Fund is not sufficient to pay the interest on or the principal of the Bonds as the same become due and payable (either by their terms or by acceleration of maturities under the provisions of Section 803 hereof) such money, together with any money then available or thereafter becoming available for such purposes, whether through the exercise of the remedies provided for in this Article or otherwise, shall be applied as follows: FIRST: if the principal of the Bonds has not become due and payable, to the payment of all installments of interest then due, in the order of the maturity of the installments of such interest; SECOND: if the principal of less than all of the Bonds has become due and payable, first to the payment of all installments of interest then due on such Bonds of which the principal is not overdue, in the order of the maturity of the installments thereof, and next to the payment of interest at the respective rates specified in the Bonds on overdue principal, and next to the payment of the principal of such Bonds then due in order of their due dates; THIRD: if the principal of all Bonds has become due and payable by redemption, acceleration or otherwise, to the payment of the interest and principal then due on the Bonds without distinction of interest over principal or of principal over interest ratably according to the amount due for principal and interest; and FOURTH: if the principal of all Bonds has become due and payable, and all of the Bonds have been fully paid, together with all interest and premium, if any, thereon, any surplus then remaining shall be applied as set forth in Section 506 hereof. 31 All payments to be made to the Owners pursuant to this Section shall be made ratably to the persons entitled thereto, without discrimination or preference, except that if there are insufficient funds to make any payment of interest or principal then due, the amount to be paid in respect of principal or interest, as the case may be, on each Bond shall be determined by multiplying the aggregate amount of the funds available for such payment by a fraction, the numerator of which is the amount then due as principal or interest, as the case may be, on each Bond and the denominator of which is the aggregate amount due in respect of all interest or all principal, as the case may be, on all Bonds. The provisions of this Section are in all respects subject to the provisions of Section 801 hereof. Whenever money is to be applied by the Trustee pursuant to the provisions of this Section: (a) such money shall be applied by the Trustee at such times and from time to time as the Trustee in its sole discretion shall determine, having due regard for the amount of such money available for such application and the likelihood of additional money becoming available for such application in the future, (b) setting aside such money as provided herein in trust for the proper purpose shall constitute proper application by the Trustee, and (c) the Trustee shall incur no liability whatsoever to the Authority, the Lessee, any Owner or any other person for any delay in applying any such money so long as the Trustee acts with reasonable diligence, having due regard for the circumstances, and ultimately applies the same in accordance with such provisions of this Indenture as may be applicable at the time of discretion. In applying such money, it shall fix the date (which shall be an Interest Payment Date unless the Trustee shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the fixing of any such date and shall not be required to make payment to the Owner of any Bond until such Bond is surrendered to the Trustee for appropriate endorsement or for cancellation if fully paid. Section 807. EFFECT OF DISCONTINUANCE OF PROCEEDINGS. If any proceedings taken by the Trustee or Owners on account of any Event of Default is discontinued or abandoned for any reason, then and in every such case, the Authority, the Trustee and the Owners shall be restored to their former positions and rights hereunder, and all rights, remedies, powers and duties of the Trustee shall continue as though no proceeding had been taken. Section 808. CONTROL OF PROCEEDINGS BY OWNERS. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of Bonds at any time Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee hereunder, provided that such direction shall be in 32 accordance with law and the provisions of this Indenture and indemnification shall have been provided to the Trustee in accordance with Section 902 hereof. Section 809. RESTRICTIONS UPON ACTIONS BY INDIVIDUAL OWNERS. Except as provided in Section 814 hereof, no Owner shall have any right to institute any suit, action or proceeding in equity or at law on any Bond or for the execution of any trust hereunder or for any other remedy hereunder unless such Owner previously shall (a) have given to the Trustee written notice of the Event of Default on account of which such suit, action or proceeding is to be instituted, (b) have requested the Trustee to take action after the right to exercise such powers or right of action, as the case may be, shall have accrued, (c) have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers hereinabove granted or to institute such suit, action or proceeding in its or their name, and (d) have offered to the Trustee reasonable security and satisfactory indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time. Such notification, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of the Indenture under this Section or other provisions of this Article. In the event that the Trustee has been provided such notification, request and offer and has thereafter refused or neglected to comply with such request within a reasonable time, the Owners of not less than twenty-five percent (25%) in aggregate principal amount of Bonds then Outstanding may institute any such suit, action or proceeding in their own names for the benefit of all Owners hereunder. It is understood and intended that, except as otherwise above provided, no one or more Owners shall have any right in any manner whatsoever by his or their action to affect, disturb or prejudice the security of this Indenture or to enforce any right hereunder except in the manner provided, that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the benefit of all Owners and that any individual right of action or other right given to one or more such Owners by law is restricted by this Indenture to the rights and remedies herein provided. Section 810. ENFORCEMENT OF RIGHTS OF ACTION. All rights of action (including the right to file proof of claim) under this Indenture or under any Bonds may be enforced by the Trustee without the possession of any Bonds or the production thereof in any proceeding relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its name as the Trustee without the necessity of joining as plaintiffs or defendants any Owners,and any recovery of judgment shall be for the equal benefit of the Owners, subject to the provisions of Section 801 hereof of this Indenture. Section 811. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy or remedies herein provided, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. 33 Section 812. DELAY NOT A WAIVER. No delay or omission by the Trustee or of any Owner in the exercise of any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or any acquiescence therein, and every power or remedy given by this Indenture to the Trustee and to the Owners may be exercised from time to time and as often as may be deemed expedient. The Trustee may, and upon written request of the Owners of not less than a majority in principal amount of the Bonds Outstanding shall, waive any Event of Default which in its opinion has been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of this Indenture or before the completion of the enforcement of any other remedies under this Indenture, but no such waiver shall extend to or affect any other existing or subsequent Event of Default or impair any rights or remedies consequent thereon. Section 813. NOTICE OF DEFAULT. The Trustee shall mail to all Owners at their addresses as they appear on the registration books maintained by the Trustee written notice of the occurrence of any Event of Default within thirty (30) days after the Trustee has notice of the same. Section 814. RIGHT TO ENFORCE PAYMENT OF BONDS UNIMPAIRED. Nothing in this Article shall affect or impair the right of any Owner to enforce the payment of the principal of and interest on his Bonds or the obligation of the Authority to pay the principal of and interest on each Bond to the Owner thereof at the time and place specified in said Bond. Section 815. WAIVER OF EVENT OF DEFAULT. The Trustee shall waive any Event of Default and its consequences and rescind any declaration of maturity of principal upon the written request of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding; provided that there shall not be waived without the written consent of the Owners of all the Bonds Outstanding (a) any Event of Default in the payment of the principal of any Outstanding Bonds at their maturity, upon the redemption (including as a result of acceleration) thereof, or (b) any Event of Default in the payment when due of the interest on any such Bonds, unless, prior to such waiver or rescission, all arrears of interest, or all arrears of payments of principal when due (without regard to any acceleration of maturity of the Bonds under the provisions of Section 803 hereof), as the case may be, and all expenses of the Trustee in connection with such Event of Default shall have been paid or provided for. In case of any such waiver or rescission, or in case any proceeding taken by the Trustee on account of any such Event of Default shall have been discontinued or abandoned or determined adversely, then and in every such case the Authority, the Lessee, the Trustee and the Owners shall be restored to their former positions, rights and obligations hereunder, respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair any right consequent thereon. 34 ARTICLE IX THE TRUSTEE Section 901. ACCEPTANCE OF TRUSTS. The Trustee shall signify its acceptance of the duties and obligations and agree to execute the trusts imposed upon it by this Indenture by executing the acceptance attached hereto, but only upon the terms and conditions set forth in this Article and subject to the provisions of this Indenture, to all of which the Authority, the Trustee and the respective Owners of the Bonds agree. Unless the Trustee has been given written notice or otherwise has actual notice that an Event of Default has occurred and is continuing, the Trustee shall not be responsible except for the performance of those duties that are expressly set forth in this Indenture, and no implied covenant or duty shall be read into this Indenture against the Trustee; provided, however, that nothing herein shall relieve the Trustee from responsibility for its own gross negligence or willful misconduct. If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers as are vested in it by this Indenture and shall use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. Section 902. INDEMNIFICATION OF THE TRUSTEE AS CONDITION FOR REMEDIAL ACTION UPON DIRECTION OF OWNERS. The Trustee shall be under no obligation to take any remedial proceeding under this Indenture upon written direction of the Owners given in accordance with the terms hereof until it is indemnified to its satisfaction against any and all costs and expenses, outlays and counsel fees and other reasonable disbursements, and against all liability, provided that the Trustee shall have no right to indemnification for any costs, expenses, outlays, counsel fees or disbursements or against any liability resulting from any proceeding or action of the Trustee if the Trustee is determined to have acted in a grossly negligent or intentional manner with respect to such proceeding or action. However, the Trustee may bring suit, or appear in and defend suit, or take any remedial proceedings under this Indenture, or take any steps in the execution of any of the trusts created hereby or in the enforcement of any rights and powers hereunder, or do anything else in its judgment proper to be done by it as such Trustee, without indemnity and with or without the direction of Owners, and in such case the Authority, at the request of the Trustee, shall cause the Lessee to reimburse the Trustee from payments made under Section 615 of the Agreement for all costs, expenses, outlays and counsel fees and other reasonable disbursements properly incurred in connection therewith. If the Authority fails to make such reimbursement, the Trustee may reimburse itself from any money in its possession under the provisions of this Indenture and shall be entitled to a preference therefor over any Bonds Outstanding. Section 903. LIMITATIONS ON OBLIGATIONS AND RESPONSIBILITIES OF THE TRUSTEE. The Trustee shall be under no obligation to effect or maintain insurance or to renew any policies of insurance 35 or to inquire as to the sufficiency of any policies of insurance carried by the Authority, or to report, make or file claims or proof of loss for any loss or damage that may occur, or to keep itself informed or advised as to the payment of any premiums or assessments, or to require any such payment to be made with respect to the Special Facilities. The Trustee shall have no responsibility in respect of the validity or sufficiency of this Indenture or, except as to the authentication thereof, in respect of the validity of the Bonds or the due execution or issuance thereof. Section 904. THE TRUSTEE NOT LIABLE FOR FAILURE OF THE AUTHORITY TO ACT. The Trustee shall not be liable or responsible for the failure of the Authority or of any of its employees or agents to make any collections or deposits or to perform any act required of the Authority under this Indenture or the Agreement. The Trustee shall not be responsible for the application of any of the proceeds of Bonds or any other money deposited with it and paid out, withdrawn or transferred hereunder if such application, payment, withdrawal or transfer is made in accordance with the provisions of this Indenture. The immunities and exemptions from liability of the Trustee hereunder shall extend to its directors, officers, employees and agents. Section 905. COMPENSATION OF THE TRUSTEE. Subject to the provisions of any contract between the Lessee and the Trustee relating to the compensation of the Trustee, the Authority shall cause the Trustee to be paid from payments made by the Lessee pursuant to Section 615 of the Agreement reasonable compensation for all services performed by the Trustee hereunder and also its reasonable expenses, charges and other disbursements and those of its attorneys, agents and employees incurred in and about the administration and the performance of its powers and duties hereunder, under the Series 1994 Guaranty, or under the Agreement. If the Authority fails to cause any payment required by this Section to be made, the Trustee may make such payment from any money in its possession under the provisions of this Indenture and shall be entitled to a preference therefor over any Bonds Outstanding hereunder. Section 906. MONTHLY STATEMENTS FROM THE TRUSTEE. On or before the 15th day of each month the Trustee shall file with the Authority and the Lessee a statement setting forth in respect of the preceding calendar month: (a) the amount withdrawn or transferred by it from, and the amount deposited in or credited to, each Fund or Account held by it under the provisions of this Indenture, (b) the amount on deposit with it at the end of such month in each such Fund or Account, (c) a brief description of all obligations held by it as an investment of money in each such Fund or Account and the investment income or loss that was charged to any Fund or Account in such month, 36 (d) the amount applied to the payment, purchase, or redemption of Bonds under the provisions of Article V of this Indenture, and (e) any other information that the Authority or the Lessee may reasonably request. All records and files pertaining to the Bonds and the Leased Premises in the custody of the Trustee shall be available at all reasonable times for inspection by the Authority, the Lessee, any Owner of ten percent (10%) in aggregate principal amount of Bonds Outstanding and their agents and representatives. Section 907. THE TRUSTEE PROTECTED IN RELYING ON CERTAIN DOCUMENTS. The Trustee shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith and in accordance with the terms of this Indenture, upon any ordinance, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other paper or document that it in good faith reasonably believes to be genuine and to have been adopted or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of this Indenture, or upon the written opinion of any independent contractor, agent, attorney, engineer or accountant believed by the Trustee to be qualified in relation to the subject matter, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument except in any case where the Trustee has actual knowledge that such statements are inaccurate. The Trustee shall not be under any obligation to see to the recording or filing of this Indenture or otherwise to the giving to any person of notice of the provisions hereof. Except as otherwise provided in this Indenture, any request, notice, certificate or other instrument from the Authority to the Trustee shall be deemed to have been signed by the proper party or parties if signed by an authorized Authority representative. Section 908. NOTICE OF DEFAULT. Except upon the happening of any Event of Default specified in Subsection 802(a) hereof, the Trustee shall not be obliged to take notice or be deemed to have notice of any Event of Default under this Indenture unless specifically notified in writing of such Event of Default by the Authority, the Lessee or the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding. Section 909. THE TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals, statements and representations contained herein and in the Bonds (excluding the Trustee's certificate of authentication of the Bonds) shall be taken and construed as made by and on the part of the Authority and not by the Trustee, and the Trustee shall be under no responsibility for the correctness of the same. 37 Section 910. THE TRUSTEE MAY DEAL IN BONDS. The bank or trust company acting as the Trustee under this Indenture, and its directors, officers, employees or agents, may in good faith, to the extent permitted by applicable law, buy, sell, own, hold and deal in any of the Bonds and may join in any action that any Owner of Bonds may be entitled to take with like effect as if such bank or trust company were not the Trustee under this Indenture. Section 911. RESIGNATION AND REMOVAL OF THE TRUSTEE SUBJECT TO APPOINTMENT OF SUCCESSOR. No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 914 hereof. Section 912. RESIGNATION OF THE TRUSTEE. The Trustee may resign at any time, for any reason, upon the mailing of written notice to all Owners, the Authority and the Lessee. Such resignation shall be effective on the later of thirty (30) days after the mailing of such notice or the date of appointment of any successor Trustee. Section 913. REMOVAL OF THE TRUSTEE. While there is no Event of Default under the Agreement or this Indenture, the Trustee may be removed at any time, for any reason, by an instrument in writing, executed by the Authority or the Lessee. Notice of such removal shall be mailed to all Owners by the Authority or the Lessee, whichever shall have taken the action to remove the Trustee. Such removal shall be effective on the later of sixty (60) days after the mailing of such notice or the date of appointment of a successor Trustee, unless the Owners of not less than twenty-five percent (25%) in aggregate principal amount of Bonds then Outstanding object to such removal in writing to the Authority and the Lessee within such sixty (60)-day period, in which case such removal shall be of no effect. The Trustee may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provisions of this Indenture with respect to the duties and obligations of the Trustee, by any court of competent jurisdiction upon application of the Authority, the Lessee or the Owners of not less than twenty- five percent (25%) in aggregate principal amount of Bonds then Outstanding. Section 914. APPOINTMENT OF SUCCESSOR TRUSTEE. If at any time hereafter the Trustee resigns, is removed, is dissolved or otherwise becomes incapable of acting, or the bank or trust company acting as the Trustee is taken over by any governmental official, agency, department or board, the Lessee shall, with the approval of the Authority (such approval not to be unreasonably withheld) appoint a successor Trustee. A successor Trustee shall not be required if the Trustee sells or assigns substantially all of its trust business and the vendee or assignee continues in the trust business, or if a transfer of the trust department of the Trustee is required by operation of law, provided that such vendee, assignee or transferee qualifies as a successor Trustee under this Section 914. 38 At any time within one year after a successor Trustee has been appointed by the Lessee, the Owners of twenty-five percent (25%) in principal amount of Bonds then Outstanding, by an instrument or concurrent instruments in writing, executed by such Owners and filed with the Lessee, may appoint a successor Trustee, which shall supersede any Trustee theretofore appointed by the Lessee. Photographic copies of each such instrument shall be delivered promptly by the Lessee to the predecessor Trustee and to the Trustee so appointed by the Owners. If no appointment of a successor Trustee by the Lessee is made pursuant to the foregoing provisions of this Section, any Owner or any retiring Trustee may apply to any court of competent jurisdiction to appoint a successor Trustee. Such court may thereupon appoint a successor Trustee. Any successor Trustee hereafter appointed shall be a bank or trust company within the State that is in good standing and duly authorized to exercise corporate trust powers in the State, that is subject to examination by Federal or State authority, and that has a combined capital, surplus and undivided profits aggregating not less than Two Hundred and Fifty Million Dollars ($250,000,000). Section 915. VESTING OF DUTIES IN SUCCESSOR TRUSTEE. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor, and also to the Authority, an instrument in writing accepting such appointment and the trusts created hereby and thereupon such successor Trustee, without any further act, shall become fully vested with all the rights, immunities and powers, and subject to all the duties and obligations, of its predecessor. Upon receipt of such instrument or upon receipt of a written request of the Authority and upon payment of the expenses, charges and other disbursements of such predecessor that are payable pursuant to the provisions of Sections 902 and 905 hereof, such predecessor Trustee shall execute and deliver an instrument transferring to such successor Trustee rights, immunities and powers of such predecessor hereunder and shall deliver all property and money held by it hereunder to its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such Trustee the rights, immunities, powers and trusts hereby vested or intended to be vested in the predecessor Trustee, any such instrument in writing shall and will, on request, be executed, acknowledged and delivered by the Authority. 39 ARTICLE X EXECUTION OF INSTRUMENTS BY OWNERS, PROOF OF OWNERSHIP OF BONDS, AND DETERMINATION OF CONCURRENCE OF OWNERS Section 1001. EXECUTION OF INSTRUMENTS BY OWNERS. Any request, direction, consent or other instrument in writing required or permitted by this Indenture to be signed or executed by any Owners may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Owners or their attorneys or legal representatives. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Authority with regard to any action taken by either under such instrument if made in the following manner: (a) The fact and date of the execution by any person of any such instrument may be proved by the verification, by any officer in any jurisdiction who by the laws thereof has power to take affidavits within such jurisdiction, to the effect that such instrument was subscribed and sworn to before him, or by an affidavit of a witness to such execution. Where such execution is on behalf of a person other than an individual, such verification or affidavit shall also constitute sufficient proof of the authority of the signer thereof. (b) The ownership of Bonds shall be proved by the registration books kept under the provisions of Section 208 hereof. Nothing contained in this Article shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which it may deem sufficient. Any request or consent of any Owner shall bind every future Owner of the same Bond in respect of anything done by the Trustee in pursuance of such request or consent. 40 ARTICLE XI SUPPLEMENTAL INDENTURE Section 1101. SUPPLEMENTAL INDENTURE WITHOUT OWNERS' CONSENT. Subject to Section 1105 hereof, the Authority and the Trustee may enter into, from time to time and at any time, such indentures supplemental hereto (which Supplemental Indentures shall thereafter form a part hereof): (a) to cure any ambiguity or formal defect or omission or to correct or supplement any provision herein that may be inconsistent with any other provision herein which does not materially adversely affect the interest of the Owners; or (b) to grant to or confer upon the Trustee, for the benefit of the Owners, any additional rights, remedies, powers, authority or security, including bond insurance, that may lawfully be granted to or conferred upon the Owners or the Trustee; or (c) to add to, amend or make deletions from the conditions, limitations and restrictions on the issuance of Bonds under the provisions of this Indenture certain conditions, limitations and restrictions, provided that such addition, deletion or amendment will not materially adversely affect the rights of the Owners of the Outstanding Bonds; or (d) to add to the covenants and agreements of the Authority in this Indenture other covenants and agreements thereafter to be observed by the Authority or to surrender any right or power herein reserved to or conferred upon the Authority, provided that such covenants and agreements and the surrendering of any such right or power do not materially adversely affect the rights of the Owners of the Outstanding Bonds; (e) to approve a Series Indenture authorizing a Series of Bonds subject to the provisions of this Indenture and the Act; or (f) to allow the Lessee and the Authority to issue bonds or finance facilities pursuant to other financing documents. Section 1102. SUPPLEMENTAL INDENTURE WITH OWNERS' CONSENT. Subject to the terms and provisions contained in this Section and Section 1105 hereof, and not otherwise, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding that will be affected by a proposed supplemental indenture shall have the right, from time to time, anything contained in this Indenture to the contrary notwithstanding, to consent to and approve the execution of such indenture or indentures supplemental hereto as are deemed necessary or desirable by the Authority and the Lessee for the purpose of modifying, altering, amending, adding to or 41 rescinding, in any particular, any of the terms or provisions contained in this Indenture or in any supplemental Indenture, provided that nothing herein contained shall permit, or be construed as permitting without the consent of the Owners of one hundred percent (100%) in principal amount of Bonds Outstanding (a) an extension of the maturity of the principal of or the interest on any Bond, or (b) a reduction in the principal amount of any Bond or the redemption premium or the rate of interest thereon, or (c) the creation of a lien upon or a pledge of the Trust Estate other than the lien and pledge created by this Indenture, or (d) a preference or priority of any Bond or Bonds over any other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture. Nothing herein contained, however, shall be construed as making necessary the approval by the Owners of the adoption of any Supplemental Indenture as authorized in Section 1101 hereof. If at any time the Authority determines that it is necessary or desirable to execute any Supplemental Indenture for any of the purposes of this Section, the Trustee shall cause notice of the proposed adoption of such Supplemental Indenture to be mailed, postage prepaid, to all Owners at their addresses as they appear on the registration books maintained by the Trustee. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that copies thereof are on file at the office of the Authority for inspection by all Owners. The Authority shall not, however, be subject to any liability to any Owner by reason of its failure to cause the notice required by this Section to be mailed and any such failure shall not affect the validity of such Supplemental Indenture when consented to and approved as provided in this Section. Whenever, at any time within one year after the date of the first mailing of such notice, the Authority delivers to the Trustee an instrument or instruments in writing purporting to be executed by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding that are affected by a proposed Supplemental Indenture, which instrument or instruments shall refer to the proposed Supplemental Indenture described in such notice and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice, thereupon, but not otherwise, the Authority may adopt such Supplemental Indenture in substantially such form, without liability or responsibility to any Owner whether or not such Owner shall have consented thereto. If the Owners of a majority in aggregate principal amount of Bonds Outstanding that are affected by a proposed Supplemental Indenture at the time of the adoption of such Supplemental Indenture have consented to and approved the adoption thereof as herein provided, no Owner shall have any right to object to the adoption of such Supplemental Indenture, to object to any of the terms and provisions contained therein or the operation thereof, to question the propriety of the adoption thereof, or to enjoin or restrain the Authority from adopting the same or from taking any action pursuant to the provisions thereof. 42 Section 1103. BONDS AFFECTED. For purposes of this Indenture, Bonds shall be deemed to be "affected" by a Supplemental Indenture if the same adversely affects or diminishes the rights of Owners against the Authority or the rights of the Owners in the security for such Bonds. The Trustee may in its discretion determine whether any Bonds would be affected by any Supplemental Indenture and any such determination shall be conclusive upon the Owners of all Bonds, whether theretofore or thereafter authenticated and delivered hereunder. The Trustee shall not be liable for any such determination made in good faith. Section 1104. SUPPLEMENTAL INDENTURES PART OF INDENTURE. Any Supplemental Indenture executed in accordance with the provisions of this Article shall thereafter form a part of this Indenture, and this Indenture shall be and be deemed to be modified and amended in accordance therewith. Thereafter, the respective rights, duties and obligations under this Indenture of the Authority, the Trustee and all Owners of Bonds shall then be enforced in all respects under the provisions of this Indenture as so modified and amended. If any Supplemental Indenture is executed and approved, Bonds issued thereafter may contain an express reference to such Supplemental Indenture, if deemed necessary or desirable by the Authority or the Lessee. Section 1105. LESSEE CONSENT, OPINION OF BOND COUNSEL REQUIRED. Any Supplemental Indenture will not be effective unless the Lessee shall have consented in writing to such Supplemental Indenture and, in the opinion of Bond Counsel delivered to the Trustee, such Supplemental Indenture: (i) will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on any Tax Exempt Bonds received by any Owner, and (ii) is authorized under the terms of this Indenture. 43 ARTICLE XII SUPPLEMENTS AND AMENDMENTS TO AGREEMENT OR THE SERIES 1994 GUARANTY Section 1201. SUPPLEMENTS AND AMENDMENTS NOT REQUIRING CONSENT. Subject to Section 1203 hereof, the Lessee and the Authority or the Trustee, as applicable, may enter into, from time to time and at any time, such amendments and supplements to the Agreement or the Series 1994 Guaranty (which supplements and amendments shall thereafter form a part thereof): (a) to cure any ambiguity or to make any other provisions with respect to matters or questions arising under the Agreement or the Series 1994 Guaranty and which shall not, in the opinion of the Trustee, materially adversely affect the rights of the Owners of Outstanding Bonds; or (b) to correct or amend any description of, or to reflect changes in, any properties comprising the Special Facilities which shall not materially adversely affect the rights by the Owners of the Outstanding Bonds; or (c) to grant to or confer upon the Authority or the Trustee for the benefit of the Owners any additional rights, remedies, powers, authority or security, including bond insurance, that may lawfully be granted to or conferred upon the Authority or Owners or the Trustee; or (d) to add to the covenants of the Lessee for the benefit of the Owners or to surrender any right or power therein conferred upon the Lessee; or (e) to make any other change which will not reduce the obligation of the Lessee to make the payments of Special Facilities Rentals due under the Agreement or the obligation of the Lessee under the Series 1994 Guaranty or otherwise to make any other change in Agreement or the Series 1994 Guaranty which does not materially adversely affect the rights of the Owners of Outstanding Bonds under this Indenture; or (f) in connection with the issuance of Additional Bonds pursuant to the requirements of Section 211 hereof; (g) to provide for additional rental payments under the Agreement to secure future obligations undertaken by the Authority on behalf of the Lessee, provided that such additional payments shall be payable on a parity basis or subordinate to the Special Facilities Rental; or (h) to exclude a portion of Land from the Leased Premises, provided that, after giving effect to such exclusion, the Authorized Lessee Representative certifies that the operating utility 44 or productive capacity of the remaining Leased Premises is not materially less than the operating utility or productive capacity of the Leased Premises prior to such exclusion. Section 1202. SUPPLEMENTS AND AMENDMENTS REQUIRING CONSENT OF OWNERS OF A MAJORITY IN PRINCIPAL AMOUNT OF BONDS. Except for supplements or amendments provided for in Section 1201 hereof, and subject to the provisions of Section 1203 hereof, the Authority shall not enter into and the Trustee shall not enter into or consent to any supplement or amendment to the Agreement or the Series 1994 Guaranty unless notice of the proposed execution of such supplement or amendment shall have been given and the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have consented to and approved the execution thereof, all as provided for in Section 1102 hereof in the case of supplements to this Indenture and with the same effect as provided in Section 1104 hereof; provided that without the unanimous consent of the Owners of the Bonds then Outstanding no such supplement or amendment shall be consented to by the Trustee which would reduce the payments to be made pursuant to Section 502 of the Agreement or Section 2.1 of the Series 1994 Guaranty. Section 1203. OPINION OF BOND COUNSEL REQUIRED. Any supplement or amendment to the Agreement or the Series 1994 Guaranty will not be effective unless, in the opinion of Bond Counsel delivered to the Trustee, such supplement or amendment: (i) will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on any Tax Exempt Bonds received by any Owner, and (ii) is authorized under the terms of this Indenture. 45 ARTICLE XIII DEFEASANCE Section 1301. DEFEASANCE OF BONDS. Any Bond shall be deemed to be paid and no longer Outstanding within the meaning of this Article and for all purposes of this Indenture when (a) payment of the principal of and premium, if any, on such Bond, plus interest thereon to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided herein) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with the Trustee, in trust and irrevocably set aside exclusively for such payment, (1) moneys sufficient to make such payment, when due or (2) Government Obligations maturing as to principal and interest in such amounts and at such times as will insure the availability of sufficient moneys to make such payment, when due and (b) all necessary and proper fees, compensation, indemnities and expenses of the Trustee and the Authority pertaining to the Bonds with respect to which such deposit is made shall have been paid or the payment thereof provided for. At such time as a Bond shall be deemed to be paid hereunder, as aforesaid, such Bond shall no longer be secured by or entitled to the benefits of this Indenture, except for the purposes of any such payment from such moneys or Government Obligations. Notwithstanding the foregoing, no deposit under clause (a)(ii) of the immediately preceding paragraph shall be deemed payment of such Bonds as aforesaid until (a) proper notice of redemption of such Bonds shall have been previously given in accordance with Article III of this Indenture or the provision of the Series Indenture with respect thereto or in the event said Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, until the Lessee shall have given the Trustee, in form satisfactory to the Trustee, irrevocable instructions to notify, as soon as practicable, the Owners of the Bonds, that the deposit required by (a)(ii) above has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with this Section 1301 and stating the maturity or redemption date upon which moneys are to be available for the payment of the principal of and the applicable redemption premium, if any, on said Bonds, plus interest thereon to the due date thereof; or (b) the maturity of such Bonds. All moneys so deposited with the Trustee as provided in this Section 1301 may also be invested and reinvested, at the written direction of the Lessee, in Government Obligations, maturing in the amounts and at the times as hereinbefore set forth, and all income from all Government Obligations in the hands of the Trustee pursuant to this Section 1301 which is not required for the payment of principal of the Bonds and interest and premium, if any, thereon with respect to which such moneys shall have been so deposited shall be deposited in the Bond Fund as and when realized and collected for use and application as are other moneys deposited in the Bond Fund. 46 Notwithstanding any provision of any other Article of this Indenture which may be contrary to the provisions of this Section 1301, all moneys or Government Obligations set aside and held in trust pursuant to the provisions of this Section 1301 for the payment of Bonds (including interest and premium thereon, if any) shall be applied to and used solely for the payment of the particular Bonds (including the interest and premium thereon, if any) with respect to which such moneys or Government Obligations have been so set aside in trust. Anything in Article XI hereof to the contrary notwithstanding, if moneys or Government Obligations have been deposited or set aside with the Trustee pursuant to this Section 1301 for the payment of Bonds and such Bonds shall not have in fact been actually paid in full, no amendment to the provisions of this Section 1301 shall be made without the consent of the Owner of each Bond affected thereby. 47 ARTICLE XIV MISCELLANEOUS PROVISIONS Section 1401. EFFECT OF COVENANTS. All covenants, stipulations, obligations and agreements of the Authority contained in this Indenture shall be deemed to be covenants, stipulations, obligations and agreements of the Authority the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall bind or inure to the benefit of the successor or successors thereof from time to time and any officer, board, body or commission to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements is transferred by or in accordance with law. Except as otherwise provided in this Indenture, all rights, powers and privileges conferred and duties and liabilities imposed upon the Authority by the provisions of this Indenture shall be exercised or performed by such other officer, board, body or commission as may be required or permitted by law to exercise such powers or to perform such duties. No covenant, stipulation, obligation or agreement herein contained shall be deemed to be a covenant, stipulation, obligation or agreement of any member, agent or employee of the Authority in his individual capacity, and neither the members of the Authority nor any official executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. Section 1402. MANNER OF GIVING NOTICE. Any notice, demand, direction, request or other instrument authorized or required by this Indenture to be given to or filed with the Authority, the Lessee or the Trustee shall be deemed to have been sufficiently given or filed for all purposes of this Indenture if and when sent by Federal Express priority delivery or registered mail, return receipt requested: (a) As to the Authority: Indianapolis Airport Authority Indianapolis International Airport Box 100 2500 South High School Road Indianapolis, Indiana 46241-4941 (b) As to the Trustee: NBD BANK, N.A. One Indiana Square Indianapolis, Indiana 46266 Attn: Corporate Trust Department (c) As to the Lessee: Federal Express Corporation 48 Attn: Vice President and Treasurer 2007 Corporate Avenue Memphis, TN 38132 with copy to: Federal Express Corporation 1980 Nonconnah Boulevard Memphis, Tennessee 38132 Attention: Legal Department, Managing Director, Business Transactions Any of such addresses may be changed at any time upon written notice of such change sent by United States registered or certified mail, postage prepaid, or by Federal Express priority delivery to the other parties by the party effecting the change. Section 1403. INCONSISTENT INDENTURE. All indentures, ordinances and parts thereof that are inconsistent with any of the provisions of this Indenture are hereby declared to be inapplicable to the provisions of this Indenture. Section 1404. HEADINGS NOT PART OF INDENTURE. Any headings preceding the texts of the several Articles and Sections hereof, table of contents, marginal notes, or footnotes appended to copies hereof shall be solely for convenience of reference and shall not constitute a part of this Indenture or affect its meaning, construction or effect. Section 1405. THE AUTHORITY, THE LESSEE, THE TRUSTEE AND THE OWNERS ALONE HAVE RIGHTS UNDER INDENTURE. Except as otherwise expressly provided herein, nothing in this Indenture, expressed or implied, is intended or shall be construed to confer upon any person, firm or corporation, other than the Authority, the Lessee, the Trustee, and the Owners of Bonds issued under and secured by this Indenture, any right, remedy or claim, legal or equitable, under or by reason of this Indenture. This Indenture is intended to be for the sole and exclusive benefit of the Authority, the Lessee, the Trustee, and the Owners. Section 1406. EFFECT OF PARTIAL INVALIDITY. If any one or more of the provisions of this Indenture or of any Bonds issued hereunder are held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Indenture or of the Bonds, and this Indenture and the Bonds shall be construed and enforced as if such illegal or invalid provision had not been contained herein or therein. Section 1407. STATE LAW GOVERNS. The Bonds are issued and this Indenture is adopted with the intent that the laws of the State shall govern their construction. 49 Section 1408. INDENTURE EFFECTIVE. This Indenture shall take effect immediately upon the issuance and delivery of the Series 1994 Bonds. Section 1409. PAYMENT DATES. In the event that any date on which principal, premium or interest on the Bonds is due is not a Business Day, payment shall be made on the next succeeding Business Day with the same force and effect as if made on the actual date on which such principal, premium or interest is due. Section 1410. COUNTERPARTS. This Indenture may be simultaneously executed in one or more counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 50 IN WITNESS WHEREOF, the Issuer and the Trustee have executed this Trust Indenture all as of the date first written above. INDIANAPOLIS AIRPORT AUTHORITY By /s/ MICHAEL W. WELLS Michael W. Wells, President Attest: /s/ BETTY J. JOHNSON Betty J. Johnson, Secretary 51 NBD BANK, N.A., as Trustee By: /s/ ROBERT J. KOCHER Robert J. Kocher, Vice President and Trust Officer Attested: /s/ DARYL F. MERGENTHAL Daryl F. Mergenthal, Trust Officer 52 EXHIBIT A Legal Description of the Land PARKING LAND A part of the Southeast quarter of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion County, Indiana, described as follows: Commencing at a bronze disk found at the Northeast corner of the Southeast quarter of said Section 26; thence South 00 degrees 04 minutes 04 seconds East (all bearings are based on the Indiana State Plane Coordinate system, East Zone (NAD83)) along the East line of said Southeast quarter 1338.76 feet to the Southeast corner of the North half of said Southeast quarter; thence South 89 degrees 09 minutes 40 seconds West along the South line of said North half, 320.01 feet to the Point of Beginning; thence continuing along said South line, South 89 degrees 09 minutes 40 seconds West 1002.51 feet to the Southwest corner of the Northeast quarter of the Southeast quarter of Section 26; thence South 89 degrees 09 minutes 40 seconds West along the South line of the Northwest quarter of the Southeast Quarter of Section 26, 104.00 feet; thence South 00 degrees 17 minutes 09 seconds East 516.09 feet; thence South 89 degrees 08 minutes 35 seconds West 93.42 feet; thence South 00 degrees 49 minutes 43 seconds East 83.11 feet; thence South 89 degrees 09 minutes 40 seconds West 665.24 feet; thence North 00 degrees 50 minutes 20 seconds West 1220.21 feet; thence North 89 degrees 09 minutes 40 seconds East 2138.52 feet to the West line of High School Road; thence South 00 degrees 04 minutes 04 seconds East along said West line 487.45 feet; thence South 89 degrees 09 minutes 40 seconds West 260.00 feet; thence South 00 degrees 04 minutes 04 seconds East 133.60 feet to the Point of Beginning. Containing 39.91785 acres, or 1,738,822 square feet, of land, more or less. [This portion of the page intentionally left blank] A-1 PRIMARY LAND A part of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion County, Indiana, described as follows: Commencing at a bronze disk found at the Southeast corner of the Northeast quarter of said Section 26; thence North 00 degrees 11 minutes 02 seconds West (all bearings are based on the Indiana State Plane Coordinate system, East Zone (NAD83)) along the East line of said Northeast quarter 384.43 feet to the Point of Beginning; thence South 83 degrees 26 minutes 05 seconds West 1347.35 feet; thence South 63 degrees 52 minutes 43 seconds West 381.02 feet; thence South 55 degrees 41 minutes 47 seconds West 65.22 feet; thence South 07 degrees 35 minutes 44 seconds East 342.34 feet; thence South 82 degrees 22 minutes 11 seconds West 647.59 feet to the beginning of a curve concave southerly having a central angle of 28 degrees 03 minutes 52 seconds, a radius of 1986.84 feet and whose chord bears South 68 degrees 20 minutes 42 seconds West 963.49 feet; thence westerly along said curve to the left an arc distance of 973.19 feet; thence North 37 degrees 16 minutes 18 seconds West 80.20 feet; thence South 52 degrees 59 minutes 41 seconds West 163.02 feet; thence South 37 degrees 16 minutes 18 seconds East 80.20 feet; thence South 52 degrees 43 minutes 42 seconds West 1421.56 feet; thence North 45 degrees 03 minutes 18 seconds West 1038.57 feet; thence North 44 degrees 56 minutes 42 seconds East 2638.12 feet; thence North 64 degrees 58 minutes 06 seconds East 364.41 feet; thence North 44 degrees 56 minutes 42 seconds East 261.80 feet; thence South 45 degrees 03 minutes 18 seconds East 535.34 feet; thence North 44 degrees 56 minutes 42 seconds East 321.00 feet; thence South 45 degrees 03 minutes 18 seconds East 300.82 feet; thence North 44 degrees 56 minutes 42 seconds East 494.35 feet; thence South 45 degrees 03 minutes 18 seconds East 673.93 feet; thence North 44 degrees 56 minutes 42 seconds East 1234.77 feet; thence South 45 degrees 03 minutes 18 seconds East 458.28 feet; thence South 00 degrees 11 minutes 02 seconds East 902.48 feet to the Point of Beginning. Containing 145.84 acres, or 6,352,790 square feet, of land, more or less. [This portion of page intentionally left blank] A-2 PARKING OPTION LAND A part of the Southwest Quarter of Section 26 and part of the Southeast Quarter of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion County, Indiana described as follows: Commencing at the Southeast Corner of the Southwest Quarter of Section 26, Township 15 North, Range 2 East; thence North 00 degrees 30 minutes 14 seconds West (all bearings are based on the Indiana State Plane Coordinate system, East Zone (NAD83)) 670.29 feet along the East Line of said Southwest Quarter to the Southeast Corner of the North Half of the South Half of said Southwest Quarter and the POINT OF BEGINNING of this description; thence South 89 degrees 29 minutes 26 seconds West along the South Line of the North Half of the South Half of said Southwest Quarter, 660.00 feet; thence South 00 degrees 30 minutes 15 seconds East to the South line of said Section 26 a distance of 669.03 feet; thence South 89 degrees 35 minutes 59 seconds West along said South line 1051.51 feet; thence North 00 degrees 36 minutes 21 seconds West 15.00 feet; thence South 89 degrees 35 minutes 59 seconds West 102.72 feet to a corner of the right-of-way created with the Interstate 70 right-of-way plans; thence the following four courses with said right-of-way for Interstate 70: (1) North 79 degrees 05 minutes 19 seconds West 101.97 feet; (2) North 84 degrees 22 minutes 54 seconds West 583.66 feet; (3) North 52 degrees 44 minutes 11 seconds East 2447.30 feet to the beginning of a curve to the right having a central angle of 28 degrees 22 minutes 03 seconds, a radius of 2176.83 feet, and whose chord bears North 66 degrees 55 minutes 12 seconds East 1066.79 feet; (4) thence northeasterly 1077.77 feet along said curve; thence South 00 degrees 50 minutes 20 seconds East 1230.84 feet; thence North 89 degrees 09 minutes 40 seconds East 665.24 feet to the western line of a 2.349 acre tract of land described in instrument #90 93290 in the office of the Recorder of Marion County, Indiana, the next two courses are along the boundary of said 2.349 acre tract of land; (1) South 00 degrees 49 minutes 43 seconds East 441.88 feet; (2) thence North 89 degrees 08 minutes 35 seconds East 192.46 feet to the southeastern corner of said 2.349 acre tract of land on the East Line of the West Half of said Southeast Quarter which is along the southwestern corner of a 6.092 acre tract of land described in instrument #90 120938 in said Recorder's office; thence North 89 degrees 08 minutes 35 seconds East 505.46 feet along the southern boundary of said 6.092 acre tract of land to its southeastern corner on the western line of the 80-foot wide ingress and egress easement described in an INGRESS AND EGRESS EASEMENT AGREEMENT recorded as instrument #92 106542 in said Recorder's office; thence South 00 degrees 17 minutes 09 seconds East 298.38 feet to the South Line of said Southeast Quarter; thence South 89 degrees 07 minutes 09 seconds West 1822.89 feet along the South Line of said Southeast Quarter to the Southeast Corner of the Southwest Quarter of Section 26; thence North 00 degrees 30 minutes 14 seconds West 220.00 parallel with the West Line of said Southeast Quarter; thence North 89 degrees 07 minutes 09 seconds East 203.00 feet parallel with the South Line of said Southeast Quarter; thence North 00 degrees 30 minutes 14 seconds West 102.00 feet parallel with the West Line of said Southeast Quarter; thence South 89 degrees 07 minutes 09 seconds West 203.00 feet A-3 parallel with the South Line of said Southeast Quarter to the West Line of said Southeast Quarter and the East Line of said Southwest Quarter; thence North 00 degrees 30 minutes 14 seconds West 348.29 feet along the East Line of said Southwest Quarter to the Point of Beginning. Containing 83.22238 acres, or 3,625,167 square feet, of land, more or less. [This portion of the page intentionally left blank] A-4 EXHIBIT B United States of America State of Indiana No:R-_______ $_____________ INDIANAPOLIS AIRPORT AUTHORITY SPECIAL FACILITIES REVENUE BONDS, SERIES 1994 (FEDERAL EXPRESS CORPORATION PROJECT) INTEREST PRINCIPAL MATURITY ORIGINAL RATE AMOUNT DATE DATE CUSIP - -------- --------- -------- -------- ----- January 15, 2017 October 1, 1994 Registered Owner: ________________________________ The Indianapolis Airport Authority (the "Authority"), for value received, hereby promises to pay, solely from the sources and in the manner hereinafter provided, to the registered owner referenced above or registered assigns, on the maturity date set forth above (or earlier as hereinafter referred to), upon the presentation and surrender hereof, at the principal corporate trust office of NBD Bank, N.A., Indianapolis, Indiana, (the "Trustee") as Trustee under the Trust Indenture, dated as of October 1, 1994, (the "Indenture") by and between the Trustee and the Authority, the principal amount set forth above. The Authority also promises to pay, solely from said sources, interest on such principal amount on each January 15 and July 15, commencing January 15, 1995 ("Interest Payment Dates") at the interest rate set forth above on the basis of a three hundred sixty (360) day year consisting of twelve (12) thirty (30) day months until the principal sum hereof is paid, commencing from the Interest Payment Date next preceding the date on which this Bond is authenticated unless it is authenticated on or after a Regular Record Date (as hereinafter defined), but on or prior to the Interest Payment Date with respect thereto, in which event it shall bear interest from such Interest Payment Date, or if it is authenticated prior to January 1, 1995, in which event it shall bear interest from the Original Date set forth above. The interest payable and punctually paid or duly provided for, on any Interest Payment Date, will be paid to the person in whose name this Bond is registered at the close of business on the Regular Record Date for such Interest Payment Date, which shall be the 1st day (whether or not a business day) of the calendar month in which such Interest Payment Date occurs. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the B-1 registered owner on such Regular Record Date, and may be paid to the person in whose name this Bond is registered at the close of business on a Special Record Date (as defined in the Indenture herein described) for the payment of such defaulted interest, which date shall be fixed by the Trustee. Such payment of interest shall be made by check mailed by the Trustee to the registered owner at his address as it appears on the bond registration books maintained by the Trustee, except that interest will be transmitted by wire transfer on such Interest Payment Date to registered owners of $1,000,000 or more in aggregate principal amount of Series 1994 Bonds as of the close of business on the relevant Regular Record Date which shall have provided written notice to the Trustee not less than 15 days before such Regular Record Date of their wire transfer addresses in the continental United States; provided that payments to a Depository for book-entry only Bonds shall be made in immediately available funds on such Interest Payment Date. All payments on this Bond shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. This Bond is not payable from the funds of the Authority, nor does it constitute a legal or equitable pledge, charge, lien or encumbrance upon any of the properties of the Authority or upon any of its income, receipts or revenues except as hereinafter provided for. This Bond and the series of which it is a part, together with the interest thereon, are payable solely from the Trust Estate (as defined in the Indenture) and do not constitute a general indebtedness or general obligation of the Authority. The registered owner of this Bond shall never have the right to demand payment of this Bond or the interest thereon out of any funds raised or to be raised by taxation. This Bond is one of a duly authorized series of revenue bonds of the Authority, designated "Indianapolis Airport Authority Special Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project)" (the "Series 1994 Bonds"), issued pursuant to Indiana Code 8-22-3 (the "Act"), the Indenture, and an ordinance duly adopted by the Board of Directors of the Authority on October 10, 1994, for the purpose of providing funds, together with any other available funds, to (i) pay the cost of the design, construction and equipping of certain facilities at the Indianapolis International Airport leased to Federal Express Corporation (the "Lessee") pursuant to a Land and Special Facilities Lease Agreement, dated as of October 1, 1994 (herein called the "Agreement"), for or related to the distribution of express cargo and parcels located at the Indianapolis International Airport as more particularly described and defined in the Agreement (the "Special Facilities") to be leased to the Lessee, and (ii) pay the costs of the issuance of the Series 1994 Bonds. The payment of the Series 1994 Bonds shall be guaranteed by the Lessee pursuant to a Series 1994 Guaranty, dated as of October 1, 1994 (the "Series 1994 Guaranty"). B-2 Copies of the Agreement, the Series 1994 Guaranty and the Indenture are on file and may be inspected at the principal corporate trust office of the Trustee. Capitalized terms used herein without definition shall have the meanings defined in the Indenture. By the purchase and acceptance of this Series 1994 Bond, the registered owner hereof signifies its assent to all of the provisions of the Indenture. In the event any provision of this Series 1994 Bond conflicts with any provision of the Indenture, the terms of the Indenture shall prevail. The Authority has entered into the Agreement with the Lessee pursuant to which the Authority has agreed to lease the Special Facilities to the Lessee and the Lessee has agreed to pay to the Authority a rental (the "Special Facilities Rentals") therefor which, together with other funds deposited under the Indenture, is equal to the principal of, premium, if any, and interest on all Series 1994 Bonds issued under the Indenture. The Agreement also provides for the payment directly to the Authority or the Trustee of other payments that are not pledged to the payment of Bonds issued under the Indenture. The Indenture provides for the issuance from time to time under the conditions, limitations and restrictions therein set forth of Additional Bonds secured as to the pledge of the Trust Estate pari passu with the Series 1994 Bonds (the Series 1994 Bonds and such Additional Bonds shall be referred to as the "Bonds"). The Indenture provides for the creation of a special fund designated the "Bond Fund" (hereinafter called the "Bond Fund"), which is pledged and charged with the payment of the principal of, premium, if any, and interest on all Series 1994 Bonds. The Indenture also provides for the deposit to the Bond Fund of the Special Facilities Rentals, to the extent and in the manner provided in the Indenture. OPTIONAL REDEMPTION The Series 1994 Bonds are subject to optional redemption by the Authority upon receipt of a written direction of the Lessee to exercise such option, in whole or in part, by lot at any time during the periods and at the redemption prices (expressed as a percentage of principal amount of Series 1994 Bonds to be redeemed), respectively, set forth below, plus interest accrued thereon to the date of redemption. Period During Which Redeemed (both dates inclusive) Redemption Price July 15, 2004 through July 14, 2005 102% July 15, 2005 through July 14, 2006 101% July 15, 2006 and thereafter 100% B-3 REDEMPTION FROM CERTAIN NET PROCEEDS The Series 1994 Bonds are subject to special optional redemption at the election of the Lessee, in whole or in part as permitted under the Agreement (if in part, selected by the Authority by lot), from Net Proceeds deposited in the Bond Fund pursuant to Sections 1101 and 1102 of the Agreement arising from the condemnation from eminent domain, damage or destruction of the Special Facilities, at a redemption price equal to one hundred percent (100%) of the principal amount thereof, without premium, plus accrued interest to the redemption date on the earliest practicable date selected by the Trustee after such deposit. REDEMPTION UPON A SERIES 1994 DETERMINATION OF TAXABILITY The Series 1994 Bonds are subject to mandatory redemption in whole at a redemption price equal to one hundred percent (100)% of the principal amount thereof, plus accrued interest to the redemption date upon a Series 1994 Determination of Taxability. REDEMPTION UPON CERTAIN TERMINATIONS OF AGREEMENT The Series 1994 Bonds are subject to mandatory redemption in whole at a redemption price equal to one hundred percent (100%) of the principal amount thereof, plus accrued interest to the date of redemption on any date selected by the Authority within 60 days after notice is given to the Trustee of the Authority's election to terminate the Agreement in accordance with Section 808 thereof. If, in the opinion of Bond Counsel, a termination date of the Agreement prior to the stated maturity date of the Series 1994 Bonds is necessary to provide that the interest on the Series 1994 Bonds will be excludable from gross income of the Owner thereof for federal income tax purposes, the Series 1994 Bonds are subject to mandatory redemption by the Authority in whole at a redemption price of one hundred percent (100%) of the principal amount thereof, plus accrued interest to the date of redemption on the Business Day prior to the final day of the term of the Agreement. EXCESS BOND PROCEEDS REDEMPTION The Series 1994 Bonds are subject to redemption by the Authority in part by lot at a redemption price equal to one hundred percent (100%) of the principal amount thereof, without premium, plus accrued interest to the redemption date from amounts which are deposited to the Series 1994 Account of the Bond Fund from the Series 1994 Account of the Construction Fund pursuant to the terms of the Indenture on the earliest practicable date selected by the Trustee after such deposit. B-4 If less than all of the Series 1994 Bonds are to be called for redemption, the Trustee shall select the Series 1994 Bonds to be redeemed by lot, each $5,000 portion of principal being counted as one Bond for this purpose. Not more than sixty (60) nor less than thirty (30) days before the redemption date of any Series 1994 Bonds to be redeemed, whether such redemption be in whole or in part, the Authority shall cause a notice of such redemption to be filed with the Trustee and given by mail to the registered owners of the Series 1994 Bonds at the addresses appearing upon the registration books maintained pursuant to the Indenture. In certain instances, as provided in the Indenture, the deposit of the redemption price of the Series 1994 Bonds fixed for redemption shall not be a condition precedent to the giving of such notice. Further, in the case of a redemption described under the heading OPTIONAL REDEMPTION the Lessee may elect prior to 5:00 p.m. Indianapolis time on the Business Day next preceding the date fixed for redemption to cancel such redemption. In such case the notice shall contain a statement to such effect. On the date fixed for redemption, notice having been given as aforesaid, the Series 1994 Bonds or portions thereof so called for redemption shall be due and payable at the redemption price established for the redemption of such Series 1994 Bonds or portions thereof on such date and, if moneys for payment of such redemption price and the accrued interest are held by the Trustee as provided in the Indenture, interest on the Series 1994 Bonds or the portions thereof so called for redemption shall cease to accrue. Notwithstanding the foregoing, in the event of redemption as described under the heading OPTIONAL REDEMPTION, the Series 1994 Bonds fixed for redemption shall not be due and payable on the date fixed for redemption if the Lessee gives written notice to the Trustee and the Authority on or prior to 5:00 p.m. Indianapolis time on the Business Day that next precedes the dated fixed for redemption of its election not to proceed with such optional redemption. If a portion of this Series 1994 Bond shall be called for redemption, a new Series 1994 Bond or Bonds in principal amount equal to the unredeemed portion hereof will be issued to the registered owner of the Series 1994 Bonds upon the surrender hereof. At the corporate trust operations office of the Trustee, in the manner of and subject to the conditions provided in the Indenture, Series 1994 Bonds may be exchanged for an equal aggregate principal amount of Series 1994 Bonds of authorized denominations and bearing interest at the same rate or rates. The Trustee shall keep at its corporate trust operations office books of the Authority for the registration of transfer of Series 1994 Bonds. The transfer of this Series 1994 Bond may be registered only upon such books and as otherwise provided in the Indenture upon the surrender hereof to the Trustee together with an assignment duly executed by the registered owner hereof or his attorney or legal representative in such form as shall be satisfactory to the Trustee. Upon any such registration of transfer, the Trustee shall deliver in exchange for this Series 1994 Bond a new Series 1994 Bond or Bonds, registered in the name of the transferee, of authorized B-5 denominations, in an aggregate principal amount equal to the unredeemed principal amount of this Series 1994 Bond, bearing interest at the same rate. The Trustee shall not be required to exchange or register the transfer of any Series 1994 Bond during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Series 1994 Bonds or any portion thereof and ending at the close of business on the date of such mailing or of any Series 1994 Bond called for redemption in whole or in part pursuant to the Indenture. The registered owner of this Series 1994 Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. Modifications or alterations of the Indenture or any Supplemental Indenture may be made only to the extent and in the circumstances permitted by the Indenture. This Series 1994 Bond is issued with the intent that the laws of the State of Indiana shall govern its construction. All acts, conditions and things required to happen, exist and be performed precedent to and in the issuance of this Series 1994 Bond and the execution of the Indenture have happened, exist and have been performed as so required. This Series 1994 Bond shall not be valid or become obligatory for any purpose or be entitled to any benefit or security under the Indenture until it shall have been authenticated by the execution by the Trustee of the Certificate of Authentication endorsed hereon. IN WITNESS WHEREOF, the Authority has caused this Series 1994 Bond to be executed with the manual or facsimile signature of its President and its official seal to be impressed hereon and this Series 1994 Bond shall be attested by manual or facsimile signature of its Secretary all as of the Original Date stated above. INDIANAPOLIS AIRPORT AUTHORITY By: ____________________________________________ President B-6 [Official Seal] Attest: _________________________________ Secretary CERTIFICATE OF AUTHENTICATION This Bond is a Bond of the Series designated herein and issued under the provisions of the within-mentioned Indenture. NBD Bank, N.A., as Trustee By: ____________________________________ Authorized Signatory B-7 [FORM OF ASSIGNMENT] [Assignment] FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [Please Print or Typewrite Name and Address of Transferee] the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. DATED: ________________________________ Signature Guaranteed: _______________________________________ _______________________________________ NOTICE: NOTICE: Signature(s) must be guaranteed The signature of this assignment by an eligible guarantor institution must correspond with the name as it participating in a Securities Transfer appears upon the face of the within Association recognized signature bond in every particular, without guarantee program. alteration or enlargement or any change whatsoever. B-8 EXHIBIT C DTC Letter of Representations (See Form Attached) C-1 BOOK-ENTRY-ONLY MUNICIPAL BONDS ------------------------------- LETTER OF REPRESENTATIONS (To be Completed by Issuer and Agent) ___________________________________________________________ Name of Issuer ___________________________________________________________ Name of Agent ___________________ Date Attention: Underwriting Dept. THE DEPOSITORY TRUST COMPANY 55 Water Street, 50th Floor New York, NY 10041-0099 Re:__________________________________________________ __________________________________________________ __________________________________________________ Issue Description Ladies and Gentlemen: This letter sets forth our understanding with respect to certain matters relating to the above-referenced issue (the "Bonds"). Agent will act as trustee, paying agent, fiscal agent, or other agent of Issuer with respect to the Bonds. The Bonds will be issued pursuant to a trust indenture, bond resolution, or other such document authorizing the issuance of the Bonds dated ___________________, 199__, (the "Document"). _____________________________ (the "Underwriters") is distributing the Bonds through The Depository Trust Company ("DTC"). To induce DTC to accept the Bonds as eligible for deposit at DTC and to act in accordance with its Rules with respect to the Bonds, Issuer and Agent, if any, make the following representations to DTC. 1. Prior to closing on the Bonds on __________________, 199__, there shall be deposited with DTC one Bond certificate registered in the name of DTC's nominee, Cede & C-2 Co. for each stated maturity of the Bonds in the face amounts set forth on Schedule A hereto, the total of which represents 100% of the principal amount of such Bonds. If, however, the aggregate principal amount of any maturity exceeds $150 million, one certificate will be issued with respect to each $150 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount. Each $150 million Bond certificate shall bear the following legend: Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation, "DTC," to Issuer or its agent for registration of transfer exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as requested by an authorized representative of DTC and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC. ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 2. In the event of any solicitation of consents from or voting by holders of the Bonds, Issuer or Agent shall establish a record date for such purposes with no provision for revocation of consents or votes by subsequent holders and shall, to the extent possible, send notice of such record date to DTC not less than 15 calendar days in advance of such record date. 3. In the event of a full or partial redemption or an advance refunding of part of the outstanding Bonds, Issuer or Agent shall send a notice to DTC specifying: (a) the amount of the redemption or refunding; (b) in the case of a refunding, the maturity dates established under the refunding, and (c) the date such notice is to be mailed to beneficial owners or published the ("Publication Date"). Such notice shall be sent to DTC by a secure means (e.g., legible telecopy, registered or certified mail, overnight delivery in a timely manner designed to assure that such notice is in DTC's possession no later than the close of business on the business day before the Publication Date. Issuer or Agent shall forward such notice either in a separate secure transmission for each CUSIP number or in a secure transmission for multiple CUSIP numbers (if applicable) which includes a manifest or list of each CUSIP submitted in that transmission. The party sending such notice shall have a method to verify subsequently the use of such means and the timeliness of such notice. The Publication Date shall be not less than 30 days nor more than 60 days prior to the redemption date or, in the case of an advance refunding, the date that the proceeds are deposited in escrow. 4. In the event of an invitation to tender the Bonds, notice by Issuer or Agent to Bondholders specifying the terms of the tender and the Publication Date of such notice shall be sent to DTC by a secure means in the manner set forth in the preceding Paragraph. C-3 5. All notices and payment advices sent to DTC shall contain the CUSIP number of the Bonds. 6. Notices to DTC pursuant to Paragraph 2 by telecopy shall be sent to DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and receipt of such notices shall be continued by telephoning (212) 709-6870. Notices to DTC pursuant to Paragraph 2 by mail or by any other means shall be sent to: Supervisor: Proxy Reorganization Department The Depository Trust Company 7 Hanover Square, 23rd Floor New York, NY 10004-2695 7. Notices to DTC pursuant to Paragraph 3 by telecopy shall be sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190. If the party sending the notice does not receive a telecopy receipt from DTC confirming that the notice has been received, such party shall telephone (516) 227-4070. Notices to DTC pursuant to Paragraph 3 by mail or by other means shall be sent to: Call Notification Department The Depository Trust Company 711 Stewart Avenue Garden City, NY 11530-4719 8. Notices to DTC pursuant to Paragraph 4 and notices of other actions including mandatory tenders, exchanges, and capital changes by telecopy shall be sent to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and receipt of such notices shall be confirmed by telephoning (212) 709-6884. Notices to DTC pursuant to the above by mail or by any other means shall be sent to: Manager: Reorganization Department Reorganization Window The Depository Trust Company 7 Hanover Square, 23rd Floor New York, NY 10004-2695 9. Transactions in the Bonds shall be eligible for next-day funds settlement in DTC's Next-Day Funds Settlement ("NDFS") system. A. Interest payments shall be received by Cede & Co., as nominee of DTC, or its registered assigns in next-day funds on each payment date (or the equivalent in accordance with existing arrangements between Issuer or Agent and DTC). Such payments shall be made payable to the order of Cede & Co. Absent any other existing arrangements such payments shall be addressed as follows: C-4 Manager: Cash Receipts Dividend Department The Depository Trust Company 7 Hanover Square, 24th Floor New York, NY 10004-2695 B. Principal payments shall be received by Cede & Co., as nominee of DTC, or its registered assigns in next-day funds on each payment date (or the equivalent in accordance with existing arrangements between Issuer or Agent and DTC). Such payments shall be made payable to the order of Cede & Co. and shall be addressed as follows: NDFS Redemption Department The Depository Trust Company 55 Water Street, 50th Floor New York, NY 10041-0099 10. DTC may direct Issuer or Agent to use any other telephone number or address as the number or address to which notices or payments of interest or principal may be sent. 11. In the event of a redemption, acceleration, or any other similar transaction (e.g., tender made and accepted in response to Issuer's or Agent's invitations necessitating a reduction in the aggregate principal amount of Bonds outstanding or an advance refunding of part of the Bonds outstanding, DTC in its discretion: (a) may request Issuer or Agent to issue and authenticate a new Bond certificate; or (b) may make an appropriate notation on the Bond certificate indicating the date and amount of such reduction in principal except in the case of final maturity, in which case the certificate will be presented to Issuer or Agent prior to payment if required. 12. In the event that Issuer determines that beneficial owners of Bonds shall be able to obtain certificated Bonds, Issuer or Agent shall notify DTC of the availability of Bond certificates. In such event, Issuer or Agent shall issue transfer, and exchange Bond certificates in appropriate amounts, as required by DTC and others. 13. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to Issuer or Agent (at which time DTC will confirm with Issuer or Agent the aggregate principal amount of Bonds outstanding). Under such circumstances, at DTC's request Issuer and Agent shall cooperate fully with DTC by taking appropriate action to make available one or more separate certificates evidencing Bonds to any DTC Participant having Bonds credited to its DTC accounts. 14. Nothing herein shall be deemed to require Agent to advance funds on behalf of Issuer. C-5 Notes: A. If there is an Agent as defined in this Letter of Representations, Agent as well as Issuer must sign this Letter. If there is no Agent, in signing this Letter Issuer itself undertakes to perform all of the obligations set forth herein. B. Under Rules of the Municipal Securities Rulemaking Board relating to "good delivery," a municipal securities dealer must be able to determine the date that a notice of a partial call or of an advance refunding or a part of an issue publication date is addressed in Paragraph 3 of the Letter. C. Schedule B contains statements that DTC believes accurately describe DTC , the method of effecting book-entry transfers of securities distributed through DTC, and certain related matters. Very truly yours, ___________________________________________ Issuer By: ________________________________________ Authorized Officer's Signature ____________________________________________ Agent By: ________________________________________ Authorized Officer's Signature Received and Accepted: THE DEPOSITORY TRUST COMPANY By: ____________________________ Authorized Officer cc: Underwriter Underwriter's Counsel C-6 SCHEDULE A (Describe Issue) CUSIP PRINCIPAL AMOUNT MATURITY DATE INTEREST RATE C-7 SCHEDULE B SAMPLE OFFICIAL STATEMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC - - bracketed material may be applicable only to certain issues) 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Security certificate will be issued for (each issue of) the Securities, (each) in the aggregate principal amount of such issue, and will be deposited with DTC. (If, however, the aggregate principal amount of (any) issue exceeds $150 million, one certificate will be issued with respect to each $150 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such issue.) 2. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, cleaning corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. 3. Purchases or Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records. The ownership interest of each actual purchaser or each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates C-8 representing their ownership interest in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities: DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [6. Redemption notices shall be sent to Cede & Co. if less than all of the Securities within an issue are being redeemed. DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.] 7. Neither DTC nor Cede & Co. will consent or vote with respect to Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date identified in a listing attached to the Omnibus Proxy. 8. Principal and interest payments on the Securities will be made to DTC. DTC's practice is to credit Direct Participants' accounts on payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Agent, or the issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. [9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to the (Tender/Remarketing) Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to the (Tender/Remarketing) Agent. The requirement for physical delivery of Securities in connection with a demand for purchase or C-9 a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records.] 10. DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to the issuer or the Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Security certificates are required to be printed and delivered. 11. The issuer may decide to discontinue use of the system of book- entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered. 12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the issuer believes to be reliable, but the issuer takes no responsibility for the accuracy thereof. C-10 EXHIBIT D WRITTEN REQUEST FOR DISBURSEMENT INDIANAPOLIS AIRPORT AUTHORITY SPECIAL FACILITIES REVENUE BONDS, SERIES 1994 (FEDERAL EXPRESS CORPORATION PROJECT) (Date) Request No. ________ NBD Bank, N.A. One Indiana Square, Suite 836 Indianapolis, IN 46266 Attention: Corporate Trust Department Dear Sir or Madam: This Requisition is submitted pursuant to the provisions of Section 402 of the Trust Indenture (the "Indenture") dated as of October 1, 1994, by and between the Indianapolis Airport Authority (the "Authority") and NBD Bank, N.A., as Trustee (the "Trustee") and Section 302 of the Land and Special Facilities Lease Agreement dated as of October 1, 1994 (the "Agreement") between the Authority and Federal Express Corporation (the "Lessee"). The terms used herein have the meanings as when used in the Indenture except where the context otherwise requires. Please indicate whether payment is requested for interest or other costs by checking item (1) or (2) below: (1) _______ Request for payment of interest. The Lessee hereby directs the Trustee to apply funds in the Series 1994 Account within the Construction Fund to the payment of interest on the Series 1994 Bonds on ___________________ (insert applicable Interest Payment Date). The Lessee hereby certifies that: (a) the payment of such interest from the Construction Fund is a permissible cost of the Special Facilities in accordance with the Act and Code; and (b) either (i) at least 95% of the net proceeds of the Series 1994 Bonds expended to the date of the payment hereby requested from the Construction Fund will have been used to acquire, construct and equip an airport facility within the - 1 - meaning of Section 142 of the Code; or (ii) 100% of the net proceeds of the Series 1994 Bonds hereby requested from the Construction Fund, other than amounts requested in (c) below, if any, will be used to acquire, construct and equip an airport facility within the meaning of Section 142 of the Code. OR (2) _______ Request for payment of other costs. The Lessee hereby requests the Trustee pay to the payee(s) named in Exhibit A attached from funds held in the Construction Fund, the amount specified in Exhibit A attached. In support of this request, (whether under 1 or 2 above) the Lessee states as follows: (a) Each of the costs listed on Exhibit A are qualified costs under the Act and have been made or incurred and were necessary for the designing, constructing or equipping of the Special Facilities and were made or incurred in accordance with the construction contracts, plans and specifications thereof then in effect and on file with the Authority; (b) The amount paid or to be paid and set forth on Exhibit A is reasonable and represents a part of the amount payable for the cost of designing, constructing or equipping the Special Facilities, and such payment was not paid in advance of the time, if any, fixed for payment and was made in accordance with the terms of any contracts applicable thereto and in accordance with usual and customary practice under existing conditions; (c) $_______________________ of the costs listed on Exhibit A represent costs of issuance with respect to the Series 1994 Bonds (within the meaning of Section 147(g)(2) of the Code). The total costs of issuance paid to date, including the payments to be made pursuant to this Requisition, are not in excess of 2% of the proceeds of the Series 1994 Bonds; (d) Either (i) at least 95% of the net proceeds of the Series 1994 Bonds expended to the date of the payment hereby requested from the Construction Fund will have been used to acquire, construct, and equip an airport facility within the meaning of Section 142 of the Code, or (ii) 100% of the net proceeds of the Series 1994 Bonds hereby requested from the Construction Fund, other than amounts - 2 - requested in (c) above, if any, will be used to acquire, construct and equip an airport facility within the meaning of Section 142 of the Code; and (e) No part of the costs of the Special Facilities included in this Requisition was included in any written request previously filed with the Trustee under the provisions hereof. In accordance with the provisions of the Indenture and the Agreement, the Lessee has caused this Requisition to be signed and verified on its behalf by its duly authorized officer this ______ day of _______________, 19___. FEDERAL EXPRESS CORPORATION ___________________________________ (Authorized Lessee Representative) EX-10.2 3 EXHIBIT 10.2: GUARANTY FROM FEDERAL EXPRESS Exhibit 10.2 ________________________________________________________________________ SERIES 1994 GUARANTY FROM FEDERAL EXPRESS CORPORATION, as Guarantor TO NBD BANK, N.A., as Trustee Dated as of October 1, 1994 $237,755,000 Indianapolis Airport Authority Special Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project) ________________________________________________________________________ TABLE OF CONTENTS Page ---- ARTICLE I REPRESENTATIONS AND WARRANTIES OF GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 1.1 Guarantor Representations and Warranties. . . . . . . . . . 1 ARTICLE II COVENANTS AND AGREEMENTS. . . . . . . . . . . . . . . . . . 2 Section 2.1. Obligations Guaranteed. . . . . . . . . . . . . . . . . . . 2 Section 2.2. Obligations Unconditional . . . . . . . . . . . . . . . . . 2 Section 2.3. No Waiver or Set-Off. . . . . . . . . . . . . . . . . . . . 4 Section 2.4. Event of Default. . . . . . . . . . . . . . . . . . . . . . 4 Section 2.5. Waiver of Notice; Expenses. . . . . . . . . . . . . . . . . 5 Section 2.6. The Guarantor to Maintain its Corporate Existence; Conditions Under Which Exceptions Permitted . . . . . . . . . . . . . . . . . . . . . . . . . 5 Section 2.7. Benefit and Enforcement . . . . . . . . . . . . . . . . . . 5 ARTICLE III NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 3.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE IV MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 6 Section 4.1. Effective Date. . . . . . . . . . . . . . . . . . . . . . . 6 Section 4.2. Remedies Not Exclusive. . . . . . . . . . . . . . . . . . . 6 Section 4.3. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 4.4. Entire Agreement; Counterparts. . . . . . . . . . . . . . . 6 Section 4.5. Severability. . . . . . . . . . . . . . . . . . . . . . . . 7 Section 4.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 7 SERIES 1994 GUARANTY THIS SERIES 1994 GUARANTY (hereinafter this "Guaranty") made and entered into as of October 1, 1994 from FEDERAL EXPRESS CORPORATION, a Delaware corporation (the "Guarantor"), to NBD BANK, N.A., a national banking association having its principal corporate trust office in Indianapolis, Indiana, as trustee (the "Trustee"). WITNESSETH: WHEREAS, the Indianapolis Airport Authority, a municipal corporation (the "Authority"), intends to issue its Special Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project), in the aggregate principal amount of $____________ (the "Series 1994 Bonds") under and pursuant to a Trust Indenture dated as of October 1, 1994 between the Authority and the Trustee (being herein, as supplemented or amended from time to time, referred to as the "Indenture"); WHEREAS, the proceeds derived from the sale of the Series 1994 Bonds are to be used to finance a portion of the costs of the construction and equipping of certain facilities as more particularly described and defined in the Agreement defined below (the "Special Facilities") at Indianapolis International Airport which are to be leased by the Authority to the Guarantor under a Land and Special Facilities Lease Agreement, dated as of October 1, 1994, between the Authority and the Guarantor (herein, as amended from time to time, called the "Agreement"); and WHEREAS, the Guarantor desires that the Authority issue the Series 1994 Bonds and apply the proceeds for the purpose described above and is willing to enter into this Guaranty in order to provide for revenues in respect of the Special Facilities and to enhance the marketability of the Series 1994 Bonds and thereby achieve interest cost and other savings for the Guarantor, and in order to provide an inducement to future purchasers of the Series 1994 Bonds (those of whom becoming at any time the registered owners of the Series 1994 Bonds being herein referred to collectively as the "Owners"); NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantor does hereby represent to and agree with the Trustee for the benefit of the Owners as follows: ARTICLE I REPRESENTATIONS AND WARRANTIES OF GUARANTOR Section 1.1. GUARANTOR REPRESENTATIONS AND WARRANTIES The Guarantor does hereby represent and warrant that it is a corporation duly incorporated and in good standing under the laws of the State of Delaware and is qualified to do business and is in good standing in the State of Indiana, has the power to enter into and perform this Guaranty, has duly authorized the 1 execution and delivery of this Guaranty by proper corporate action and that such execution and delivery does not contravene or constitute a default under any agreement, instrument or indenture or any provision of its restated certificate of incorporation, or any other requirement of law applicable to the Guarantor. This Guaranty constitutes the legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except as the enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and by general equitable principles. ARTICLE II COVENANTS AND AGREEMENTS Section 2.1. OBLIGATIONS GUARANTEED. (a) The Guarantor hereby unconditionally guarantees to the Trustee for the benefit of the Owners (1) the full and prompt payment of the principal of and premium, if any, on each Series 1994 Bond when and as the same shall become due and payable as provided in the Indenture, whether at the stated maturity thereof, by acceleration, call for redemption or otherwise and (2) the full and prompt payment of interest on each Series 1994 Bond, and, to the extent permitted by law, interest on overdue interest and premium, when and as the same shall become due and payable as provided in the Indenture. All payments by the Guarantor hereunder shall be paid in lawful money of the United States of America in immediately available funds. Each and every default in payment of the principal of, premium, if any, or interest on any Series 1994 Bond, or interest on overdue interest or premium, or under this Guaranty shall give rise to a separate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises. (b) The Guarantor further agrees that the obligations of the Guarantor set forth herein shall constitute an absolute, unconditional, present and continuing guaranty and promise of payment and not of collection, and waives any right to require that any resort be had by the Trustee or the Owners to pursue (1) the Trustee's or any Owner's rights against any other party, or (2) any other right or remedy available to the Trustee or any Owner by contract, applicable law or otherwise. Section 2.2. OBLIGATIONS UNCONDITIONAL. The obligations of the Guarantor under this Guaranty shall be absolute, unconditional and immediately enforceable when each payment is due and shall remain in full force and effect until the entire principal of, premium, if any, and interest on the Series 1994 Bonds, and, to the extent permitted by law, interest on overdue interest and premium, shall have been paid in full, or duly provided for in accordance with the Indenture, and, to the extent permitted by law, such obligations shall not be affected, modified, released or impaired upon the happening from time to time of any event, including, without limitation any of the following, whether or not with notice to, or the consent of, the Guarantor: 2 (a) the waiver, compromise, settlement, release or termination of any or all of the obligations, covenants or agreements of the Authority contained in the Indenture, or of the payment, performance or observance thereof, or the impossibility of performance or unenforceability of any of such obligations, covenants or agreements; (b) the failure to give notice to the Guarantor of the occurrence of any event of default under the terms and provisions of this Guaranty, the Indenture or the Agreement; (c) the transfer, assignment or mortgaging or the purported transfer, assignment or mortgaging of all or any part of the interest of the Authority or the Guarantor in the Special Facilities, as defined in the Agreement, or any failure of title with respect to the Authority's interest in the Land and the Special Facilities (as defined in the Agreement) or the invalidity, unenforceability or termination of the Agreement; (d) the assignment of any of the obligations, covenants and agreements contained in this Guaranty; (e) the waiver, compromise, settlement, release or termination of the Authority's obligations, covenants or agreements contained in the Agreement, or of the payment, performance or observance thereof, or the impossibility of performance or unenforceability of any of such obligations, covenants or agreements; (f) the waiver, compromise, settlement, release or termination of any of the obligations, covenants or agreements of the Guarantor under the Agreement, or of the payment, performance or observance thereof; (g) the extension of the time for payment of any principal of any premium, if any, or interest on any Series 1994 Bond, owing or payable on such Series 1994 Bond or of the time for performance of any obligations, covenants or agreements under or arising out of the Agreement or the Indenture or the extension or the renewal of either thereof; (h) the modification or amendment (whether material or otherwise) of any obligation, covenant or agreement set forth in the Agreement or the Indenture; (i) the taking or the omission to take any of the actions referred to in the Agreement, the Indenture or this Guaranty; (j) any failure, omission or delay on the part of the Authority or the Trustee to enforce, assert or exercise any right, power or remedy conferred on the Authority, the Trustee or any other person in this Guaranty, the Agreement or the Indenture, or any other act or acts on the part of the Authority, the Trustee or any of the Owners; (k) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, 3 insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors or readjustment of, or other similar proceedings affecting the Guarantor or the Authority or any or all of the assets of any of them, or any allegation or contest of the validity of this Guaranty, the Indenture or the Agreement, or the disaffirmance of this Guaranty, the Indenture or the Agreement in any such proceeding; (l) to the extent permitted by law, any event or action that would, in the absence of this clause, result in the release or discharge by operation of law of the Guarantor from the performance or observance of any obligation, covenant or agreement contained in this Guaranty; (m) the default or failure of the Guarantor fully to perform any of its obligations set forth in this Guaranty; (n) the damage to, or condemnation, destruction, redelivery, repossession or surrender of, all or any portion of the Special Facilities or the abandonment, non-completion or curtailment of the Special Facilities, or the release, substitution or replacement of any property comprising all or a portion of the Special Facilities; (o) the release, substitution or replacement of any security pledged under the Indenture; (p) any determination of the illegality, irregularity, invalidity or unenforceability of, or any defect in, the Series 1994 Bonds, the Agreement or the Indenture or any of the provisions thereof; or (q) the expiration or earlier termination of the Agreement, whether as a result of action by the Lessee (as defined in the Agreement), the Authority or any third person. Section 2.3. NO WAIVER OR SET-OFF. Nothing in this Guaranty shall be construed as a waiver by the Guarantor of any rights or claims it may have against the Authority or the Trustee under this Guaranty or otherwise, but any recovery upon such rights and claims shall be had from the Authority or the Trustee separately. No act or omission of any kind or at any time on the part of the Authority or the Trustee, or their successors and assigns, in respect of any matter whatsoever shall in any way impair the rights of the Trustee to enforce any right, power or benefit under this Guaranty, and no set-off, counterclaim, reduction, or diminution of any obligation, or any defense of any kind or nature (other than performance by the Guarantor of its obligations hereunder), which the Guarantor has or may have against the Authority or the Trustee or any assignee or successor thereof shall be available hereunder to the Guarantor. Section 2.4. EVENT OF DEFAULT. In the event of a default in payment of principal of or premium, if any, on any Series 1994 Bond when and as the same shall become due, whether at the stated maturity thereof, by acceleration, call for redemption or otherwise, or in the event of a 4 default in the payment of any interest on any Series 1994 Bond when and as the same shall become due, the Trustee may immediately proceed to enforce its rights hereunder and the Trustee shall have the right to proceed first and directly against the Guarantor under this Guaranty without proceeding against or exhausting any other remedies which it may have and without resorting to any other security held by the Lessor or the Trustee. All moneys recovered pursuant to this Guaranty shall be applied in accordance with SECTION 502 OR SECTION 806 of the Indenture. Section 2.5. WAIVER OF NOTICE; EXPENSES. The Guarantor hereby expressly waives notice from the Trustee or the Owners of their acceptance and reliance on this Guaranty. The Guarantor agrees to be responsible for reasonable costs, expenses and fees, including all reasonable attorneys' fees and expenses which are incurred by the Trustee in enforcing this Guaranty or protecting the rights of the Trustee or the Owners following any event of default on the part of the Guarantor hereunder, whether the same shall be enforced by suit or otherwise. Section 2.6. THE GUARANTOR TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS UNDER WHICH EXCEPTIONS PERMITTED. The Guarantor shall maintain its corporate existence, shall remain duly qualified to do business in the State, shall not dissolve or otherwise dispose of all or substantially all of its assets and shall not consolidate with or merge into another entity; provided that the Guarantor may, without violating this Section 2.6, consolidate with or merge into another entity or permit one or more other entities to consolidate with or merge into it, or transfer or convey all or substantially all of its property, assets and licenses to another entity, but only if the entity resulting from or surviving such merger (if other than the Guarantor) or consolidation or the entity to which such transfer or conveyance is made shall (1) expressly assume in writing and agree to perform all of the Guarantor's obligations hereunder, (2) be qualified to do business in the state of Indiana; and (3) if such entity shall not be organized and existing under the laws of the United States of America or any state or territory thereof or the District of Columbia, furnish to the Trustee an irrevocable consent to service of process in, and to the jurisdiction of the courts of, the state of Indiana with respect to any action or suit, at law or in equity, brought by the Trustee to enforce this Guaranty. Section 2.7. BENEFIT AND ENFORCEMENT. This Guaranty shall not be deemed to create any right, or to be in whole or in part for the benefit of any person other than the Trustee, the Guarantor, the Owners and their permitted successors and assigns. This Guaranty is entered into by the Guarantor for the benefit of the Owners and may be enforced by or on behalf of the Owners only by the Trustee in accordance with the provisions hereof and of the Indenture. However, the Trustee (i) may proceed to enforce this Guaranty without request of the Owners and (ii) shall proceed to enforce this Guaranty upon written request of the Owners holding not less than twenty-five percent (25%) in aggregate principal amount of the Series 1994 Bonds then outstanding, upon being indemnified for its expenses and any liability to be incurred by the Trustee other than liability arising from its willful misconduct or negligence in connection with any action so taken. 5 ARTICLE III NOTICES Section 3.1. NOTICES. Any notice required to be sent to the Guarantor including process, pleadings or other papers to be served upon the Guarantor shall be sent by registered or certified mail, postage prepaid, or by Federal Express priority delivery to Federal Express Corporation, 2007 Corporate Avenue, Memphis, Tennessee 38132, Attention: Vice President and Treasurer, or to such other address as may be furnished by the Guarantor to the Trustee in writing. A copy of any such notice shall also be sent in the same manner to Federal Express Corporation, 1980 Nonconnah Boulevard, Memphis, Tennessee 38132, Attention: Legal Department, Managing Director, Business Transactions or to such other address as may be furnished by the Guarantor to the Trustee in writing. ARTICLE IV MISCELLANEOUS Section 4.1. EFFECTIVE DATE. The obligations of the Guarantor hereunder shall arise absolutely and unconditionally upon the date of payment for and delivery of the Series 1994 Bonds. Section 4.2. REMEDIES NOT EXCLUSIVE. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Guaranty or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Trustee to exercise any remedy reserved to it in this Guaranty, it shall not be necessary to give any notice. In the event any provision contained in this Guaranty should be breached, and thereafter duly waived, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver, amendment, release or modification of this Guaranty shall be established by conduct, custom or course of dealing, but solely by an instrument in writing duly executed by parties to this Guaranty. Section 4.3. AMENDMENTS. This Guaranty may not be amended or modified without the consent of the Owners affected by such amendment or modification pursuant to SECTION 1202 of the Indenture, except to the extent permitted by SECTION 1201 of the Indenture. Section 4.4. ENTIRE AGREEMENT; COUNTERPARTS. This Guaranty constitutes the entire agreement, and supersedes all prior agreements and undertakings, both written and oral, between 6 the parties with respect to the subject matter hereof and may be executed simultaneously in several counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Section 4.5. SEVERABILITY. The invalidity or unenforceability of any one or more phrases, sentences, clauses or sections contained in this Guaranty shall not affect the validity or enforceability of the remaining portions of this Guaranty, or any part thereof. Section 4.6. GOVERNING LAW. THIS GUARANTY SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE. IN WITNESS WHEREOF, each of the Guarantor and the Trustee has caused this Guaranty to be executed in its name and behalf by its duly authorized officer as of the date first above written. FEDERAL EXPRESS CORPORATION, as Guarantor By: /s/ CHARLES M. BUCHAS, JR. Charles M. Buchas, Jr., Vice President and Treasurer NBD BANK, N.A., as Trustee By: /s/ ROBERT J. KOCHER Robert J. Kocher Title: Vice President and Trust Officer Attest: By: /s/ DARYL F. MERGENTHAL Daryl F. Mergenthal Title: Trust Officer STATE OF TENNESSEE ) ) SS: COUNTY OF SHELBY ) On this 24th day of October, 1994, before me personally appeared Charles M. Buchas, Jr., to me known, who, being by me duly sworn, did say that he is the vice president and treasurer of FEDERAL EXPRESS CORPORATION, a Delaware corporation; and that said instrument was signed on behalf of said corporation by authority of its Board of Directors, and said officer acknowledged said instrument to be the free act and deed of said corporation. /s/ CHARLEDA M. SMITH Notary Public My Commission Expires: October 24, 1995 STATE OF INDIANA ) ) SS: COUNTY OF MARION ) On this 26th day of October, 1994, before me personally appeared Robert J. Kocher and Daryl F. Mergenthal, to me known, who, being by me duly sworn, did say that they are the vice president and trust officer, and trust officer, respectively, of NBD BANK, N.A.; and that said instrument was signed on behalf of said Bank by authority of its Board of Directors, and said officers acknowledged said instrument to be the free act and deed of said Bank. /s/ BINA AHLUWALIA Notary Public My Commission Expires: April 24, 1998 EX-10.3 4 EXHIBIT 10.3: LEASE AGREEMENT Exhibit 10.3 LAND AND SPECIAL FACILITIES LEASE AGREEMENT BY AND BETWEEN FEDERAL EXPRESS CORPORATION AND THE INDIANAPOLIS AIRPORT AUTHORITY DATED AS OF OCTOBER 1, 1994 TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS ...................................................2 Section 101. Incorporation of Indenture ....................................2 Section 102. Definitions ...................................................2 ARTICLE II USE OF FACILITIES; REPRESENTATIONS AND WARRANTIES .............6 Section 201. Use of Facilities .............................................6 Section 202. Representations by the Authority ..............................6 Section 203. Representations and Warranties by the Lessee ..................8 ARTICLE III COMMENCEMENT AND COMPLETION OF FACILITIES; ISSUANCE OF BONDS ...............................10 Section 301. Plans and Specifications, Approvals, Construction, Construction Contracts; Utilities ...........................10 Section 302. Agreement to Issue Series 1994 Bonds; Application of Proceeds; the Lessee Required to Pay Costs of Construction if Bond Proceeds Insufficient ...............................12 Section 303. As-Built Drawings ............................................13 Section 304. Cost of Construction and Preliminary Completion Certificates ................................................13 Section 305. Establishment of the Completion Date, Other Completion Certificates 13 Section 306. The Lessee to Pursue Remedies Against Contractors, Subcontractors and Suppliers and Their Sureties .............13 Section 307. Construction of Additional Facilities. .......................14 Section 308. Ownership of Improvements ....................................15 ARTICLE IV TERM; EXPANSION OPTION .......................................16 Section 401. Term .........................................................16 Section 402. Rights at Expiration .........................................16 Section 403. The Lessee's Option to Expand the Parking Land ...............16 Section 404. Expiration ...................................................17 ARTICLE V RENTALS AND FEES .............................................18 Section 501. Ground Rent ..................................................18 -i- Section 502. Special Facilities Rental ....................................19 Section 503. Field Use Charges ............................................20 Section 504. Time and Place of Payments ...................................20 Section 505. Delinquent Rentals ...........................................20 Section 506. Assignment of Rights .........................................20 Section 507. Obligations of the Lessee Hereunder Unconditional ............20 Section 508. Prepayment of Ground Rentals .................................21 ARTICLE VI OBLIGATIONS OF THE LESSEE ....................................22 Section 601. Net Lease ....................................................22 Section 602. Maintenance and Operation ....................................22 Section 603. Utilities ....................................................23 Section 604. Trash, Garbage and Other Refuse, Signs .......................24 Section 605. Hazardous Materials ..........................................24 Section 606. Nondiscrimination ............................................25 Section 607. Affirmative Action ...........................................26 Section 608. Observance of Statutes .......................................26 Section 609. Hazard Lights ................................................27 Section 610. Mechanic's Liens .............................................27 Section 611. The Lessee to Maintain its Corporate Existence; Conditions Under Which Exceptions Permitted .................27 Section 612. Equipment ....................................................28 Section 613. Security Agreement ...........................................28 Section 614. Tax Exemption ................................................28 Section 615. The Lessee's Covenants Concerning the Series 1994 Bonds ......29 ARTICLE VII OBLIGATIONS OF THE AUTHORITY .................................30 Section 701. Operation as a Public Airport ................................30 Section 702. Ingress and Egress ...........................................30 Section 703. Quiet Enjoyment of Leased Premises ...........................30 Section 704. Maintenance and Operations ...................................30 ARTICLE VIII THE AUTHORITY'S RESERVATIONS .................................31 Section 801. Improvement, Relocation or Removal of Special Facilities .....31 Section 802. Inspection of Leased Premises ................................31 Section 803. Subordination to U.S. Government .............................31 Section 804. War or National Emergency ....................................31 Section 805. No Liability of the Authority ................................31 -ii- Section 806. No Warranty of Condition or Suitability ......................32 Section 807. Responsibility for Contracts for Special Facilities and Payment of Special Facilities Rentals ...................32 Section 808. Option of the Authority to Terminate Lease ...................32 Section 809. Consideration of Amendment ...................................33 ARTICLE IX INDEMNITY AND INSURANCE ......................................34 Section 901. Indemnification ..............................................34 Section 902. Public Liability Insurance ...................................34 Section 903. Fire and Extended Coverage Insurance .........................35 Section 904. Application of Insurance Proceeds ............................35 Section 905. Performance Bonds ............................................35 Section 906. Right of the Authority or Trustee to Pay Insurance Premiums ....................................................36 ARTICLE X PREPAYMENT OF SPECIAL FACILITIES RENTALS .....................37 Section 1001. In Connection With Optional Redemption of Series 1994 Bonds ..37 Section 1002. In Connection with Defeasance of the Series 1994 Bonds .......37 Section 1003. In Connection with the Termination of this Agreement in the Event of Damage or Destruction or Condemnation .....................37 Section 1004. In Connection with a Partial Redemption ......................38 Section 1005. In Connection With a Series 1994 Determination of Taxability..38 ARTICLE XI DAMAGE AND CONDEMNATION ......................................39 Section 1101. Damage and Destruction .......................................39 Section 1102. Condemnation .................................................41 Section 1103. Destruction or Condemnation of Excluded Personal Property or Lessee Improvements ......................................43 Section 1104. Taking or Condemnation by the Authority ......................43 Section 1105. Destruction or Condemnation of Leased Premises Other Than Special Facilities or Former Lessee Improvements ............43 ARTICLE XII ADDITIONAL BONDS .............................................45 Section 1201. Additional Bonds .............................................45 ARTICLE XIII TERMINATION OF AGREEMENT BY THE LESSEE .......................46 Section 1301. Termination by the Lessee ....................................46 -iii- ARTICLE XIV EVENTS OF DEFAULT ............................................47 Section 1401. Events of Default ............................................47 Section 1402. Remedies of the Trustee for Certain Events of Default ........48 Section 1403. Remedies of the Authority on Default .........................48 Section 1404. The Lessee to Remain Liable for Payments; Reletting ..........49 Section 1405. Disposition of Excluded Personal Property ....................49 Section 1406. No Remedy Exclusive ..........................................49 Section 1407. No Additional Waiver Implied By One Waiver; Consents to Waiver ...................................................50 Section 1408. Suspension of Agreement ......................................50 Section 1409. Delay not a Waiver ...........................................50 ARTICLE XV DEFAULT BY THE AUTHORITY .....................................51 Section 1501. Default by the Authority; Remedies of the Lessee .............51 ARTICLE XVI RIGHTS UPON TERMINATION ......................................52 Section 1601. Fixed Improvements ...........................................52 Section 1602. Excluded Personal Property ...................................52 ARTICLE XVII ASSIGNMENT AND SUBLETTING ....................................53 Section 1701. Successors and Assignments ...................................53 Section 1702. Subletting ...................................................53 Section 1703. Opinion of Bond Counsel Required .............................53 ARTICLE XVIII GENERAL PROVISIONS ...........................................54 Section 1801. Non-Interference with Operation of Airport ...................54 Section 1802. Attorney's Fees ..............................................54 Section 1803. Taxes ........................................................54 Section 1804. License Fees and Permits .....................................54 Section 1805. Amendments to this Agreement .................................54 Section 1806. Force Majeure ................................................55 Section 1807. References to Bonds, Trustee and the Indenture Ineffective when Bonds are no Longer Outstanding ........................55 Section 1808. Modifications Hereof and of Indenture; Indenture Subordinate to Agreement ................................................55 Section 1809. Paragraph Headings ...........................................55 -iv- Section 1810. Interpretations ..............................................56 Section 1811. Notices ......................................................56 Section 1812. Party's Consent ..............................................56 Section 1813. Restoration of Existing Facility .............................56 Section 1814. Counterparts .................................................57 Exhibit A Property Description ........................................A-1 Exhibit B Special Facilities ..........................................B-1 Exhibit C Insurance Form ..............................................C-1 Exhibit D Minimum Standards for Installation of Aircraft Fueling System .....................................................D-1 Exhibit E Development Guidelines for Airside and Corporate Village ....E-1 -v- LAND AND SPECIAL FACILITIES LEASE AGREEMENT THIS LAND AND SPECIAL FACILITIES LEASE AGREEMENT (hereinafter called this "Agreement") made and entered into as of this 1st day of October 1994, by and between the Indianapolis Airport Authority, a municipal corporation existing under and by virtue of the laws of the State of Indiana (hereinafter called the "Authority"), and Federal Express Corporation, a Delaware corporation with its principal office at Memphis, Tennessee and authorized to do business in the State of Indiana (hereinafter called the "Lessee"). WITNESSETH: WHEREAS, the Authority owns and operates the Indianapolis International Airport (hereinafter called "Airport"); and WHEREAS, the Lessee is primarily engaged in the business of distribution of express cargo and parcels; and WHEREAS, the Authority has right, title and interest in and to the real property on the Airport, together with the facilities, easements, rights, licenses, and privileges hereinafter granted, and the Authority has full power and authority to enter into this Agreement in respect thereof; and WHEREAS, the Authority proposes to develop certain real estate described in EXHIBIT A hereto and acquire and construct thereon certain facilities described in EXHIBIT B hereto; and WHEREAS, the Authority proposes to finance the costs of such activities through the issuance of Special Facilities Revenue Bonds of the Authority issued under the Indenture herein defined; and WHEREAS, the Lessee desires to lease such real estate and improvements upon the terms and conditions hereinafter stated; NOW, THEREFORE, in consideration of the mutual covenants and considerations herein contained, the Authority lets and demises to the Lessee and the Lessee rents from the Authority the Leased Premises and all herein described rights incident thereto, and the Lessee and the Authority further agree and covenant as follows: 1 ARTICLE I DEFINITIONS Section 101. INCORPORATION OF INDENTURE. The capitalized terms used herein and defined in Article I of the Indenture shall, for the purposes of this Agreement, have the meanings set forth in the Indenture unless the context otherwise requires. Section 102. DEFINITIONS. In addition to terms defined elsewhere in this Agreement, the following terms, for the purposes of this Agreement, shall have the meanings set forth below: "Act" means Indiana Code 8-22-3, as amended. "Airport" means the Indianapolis International Airport. "Architect" means a licensed architect or a firm of licensed architects qualified to do business in the State, appointed by the Lessee and acceptable to the Authority, who shall be responsible for the construction of the Special Facilities (other than Equipment) and any Lessee Improvements. "Authority" means the Indianapolis Airport Authority, a municipal corporation duly organized and operating under the law of the State, including the Act, or any successor thereto or assign thereof. "Authorized Lessee Representative" means such officer or employee of the Lessee authorized by the Lessee to act on its behalf under this Agreement or the Indenture as certified to the Authority and the Trustee in writing by the Lessee. "Bond Counsel" means any nationally recognized firm of attorneys experienced in the matters relating to the issuance of obligations by municipalities. "Completion Date" means the date of completion of the acquisition and construction of the Special Facilities certified in accordance with Section 305 hereof. "Construction Management Agreement" means the Construction Management Agreement, dated as of the date hereof, between the Authority and the Lessee. "Environment, Health and Safety Requirements" means all of the terms and conditions of all permits, licenses, and other authorizations which are required under, and all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules, and timetables which are contained in, all federal, state and local laws (including rules, regulations, codes, judgments, orders, decrees, stipulations, injunctions, and demand letters issued, entered, 2 promulgated or approved thereunder) relating to public health and safety, worker health and safety, or pollution or protection of the environment, including Laws relating to emissions, discharges, releases, or threatened releases of Hazardous Materials into ambient air, surface water, ground water, or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials. "Equipment" means any equipment, permanent inventory, or tangible personal property financed from moneys disbursed from the Construction Fund, whether now owned or hereafter acquired, as the same shall be substituted or replaced from time to time in accordance with Subsection 612(a) hereof. "Excluded Personal Property" means the equipment, permanent inventory or tangible personal property of the Lessee acquired from moneys other than moneys disbursed from the Construction Fund and installed into or otherwise located on the Leased Premises pursuant to Subsection 307(b) hereof; provided, that Excluded Personal Property shall not include equipment, permanent inventory or tangible personal property purchased in substitution or replacement of Equipment to the extent such substituted or replacement equipment is necessary to maintain the operating utility or productive capacity of the Special Facilities as provided in Subsection 612(a) hereof. "Facilities" means, collectively, the Leased Premises, the Lessee Improvements and the Excluded Personal Property. "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State of Indiana or the United States Government, including, without limitation, any material or substance which is (a) petroleum, batteries, or liquid solvents or similar chemicals, (b) asbestos, (c) radioactive material or waste, (d) polychlorinated biphenyls (PCBs), (e) designated as a "hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. Section 1317), (f) defined as a "hazardous waste" pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C Section 6901 et seq. (42 U.S.C. Section 6903), or pursuant to Section 13-7-1-12 of the Indiana Code, or determined to be a "hazardous waste" under Section 13-7-8.5-3(b) of the Indiana Code, (g) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601), or pursuant to Section 13-7-1.5-1 of the Indiana Code, (h) regulated under the Toxic Substances Control Act (15 U.S.C. Section 2601 ET SEQ.) or defined as a PCB pursuant to Section 13-7-16.5-1 of the Indiana Code, (i) defined as a "contaminant" pursuant to Section 13-7-1-7 of the Indiana Code, or (j) any other substance or material similarly classified by any other federal, state or local statute or ordinance or by any rule or regulation promulgated or adopted pursuant thereto, whether now existing or hereinafter enacted. 3 "Indenture" means the Trust Indenture dated as of October 1, 1994 between the Authority and NBD Bank, N.A., as amended and supplemented, providing for the issuance of the Series 1994 Bonds. "Land" means the Primary Land, the Parking Land and any additional land which is hereafter leased to the Lessee by the Authority pursuant to this Agreement by an amendment hereto or supplement hereof. "Laws" means and shall include, but not be limited to, the Comprehensive Environmental Response, Compensation and Liability Act, the Solid Waste Disposal Act, the Occupational Safety and Health Act, the Federal Water Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Refuse Act, the Hazardous Materials Transportation Act, the Emergency Planning and Community Right-to- Know Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Endangered Species Act, the National Environmental Policy Act, the Indiana Air and Water Pollution Control Law, the Indiana Groundwater Protection Act, the Indiana Hazardous Waste Law, the Indiana Underground Storage Tanks Act, the Indiana Wastewater Management Law, the Indiana Fish and Wildlife Act, the Indiana Flood Control Act, and the Indiana Environmental Policy Act. "Leased Premises" means: (i) the Land; (ii) the Special Facilities; (iii) any Lessee Improvements that have been conveyed to the Authority pursuant to the provisions of Section 308 hereof; and (iv) any other buildings, structures, additions, improvements, fixtures and facilities constructed on the Land from time to time, other than Lessee Improvements. "Lessee" means Federal Express Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware and qualified to do business in the State, or any successor thereto or assign thereof permitted by this Agreement. "Lessee Improvements" means any additional buildings, structures, additions, improvements, fixtures or facilities constructed on the Land as provided in Subsection 307(a) hereof, except to the extent the same have been conveyed to the Authority pursuant to Section 308 hereof. "Liability" means any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated, and whether due or to become due), including, without limitation, responsibility under Environment, Health and Safety Requirements for cleanup, containment, restoration, removal, remediation, investigation or monitoring relating thereto (collectively, "Remedial Work"), liability for costs of Remedial Work, liability for costs of government oversight and other expenses incidental to Remedial Work, liability for natural resources damage, liability for illness, personal injury or the increased risk of or fear of illness or personal injury, and liability for economic losses or other property damage. 4 "Parking Land" means the real estate located at the Airport as described in the attached EXHIBIT A under the heading "Parking Land", and, upon the exercise of an option granted in Section 403 hereof, that portion of real estate described in the attached EXHIBIT A under the heading "Parking Option Land" for which the option has been exercised, in each case, including the right of ingress thereto and egress therefrom. "Phase" means each discrete portion of the Special Facilities (which are (i) the employee parking lot, (ii) the freight building and its related Equipment, (iii) the aircraft ramp, and (iv) the sort facility and its related Equipment) and each Lessee Improvement. "Plans and Specifications" means the final plans and specifications for the Special Facilities and any Lessee Improvement prepared by the Architect and approved by the Authority and the Lessee. "Primary Land" means the real estate located at the Airport as described in the attached EXHIBIT A under the heading "Primary Land", including the right of ingress thereto and egress therefrom. "Series 1994 Bonds" means the Indianapolis Airport Authority Special Facilities Revenue Bonds, Series 1994 (Federal Express Corporation Project) to be issued in the aggregate principal amount not to exceed $237,755,000. "Special Facilities" means the buildings, structures, improvements, equipment and facilities financed with moneys disbursed from the Construction Fund whether now owned or hereafter acquired, including the Equipment. "Special Facilities Rentals" means the amounts paid or payable by the Lessee pursuant to Section 502 hereof. "Supplemental Agreement" means an amendment to or supplement of this Agreement entered into in accordance with Section 1805 hereof. "Tax Exempt Bonds" means any Bonds the interest on which, when issued, in the opinion of Bond Counsel, is excludable from gross income of the holder thereof for federal income tax purposes, except for interest on such Bond for any period during which such Bond is held by a "substantial user" of the facilities financed with the proceeds of such Tax-Exempt Bonds or a "related person" as defined in Section 147(a) of the Code. 5 ARTICLE II USE OF FACILITIES; REPRESENTATIONS AND WARRANTIES Section 201. (a) USE OF FACILITIES. The Lessee shall use the Facilities for the operation of its business of distribution of express cargo and parcels and for other purposes reasonably incidental thereto, subject to the following: (i) all parking of automobiles and trucks operated by officers, employees and business invitees of the Lessee incidental to its operation, except for those vehicles in the process of loading or unloading and servicing aircraft, shall be confined to the parking lot provided by the Lessee on the Land; (ii) all aircraft and ramp equipment stored on the ramp shall be parked in accordance with a plan approved by the Authority; (iii) fueling, servicing and minor repairs, as defined in the Authority's rules and regulations, of aircraft and ramp equipment operated by or for the Lessee in connection with its operations shall be performed in accordance with the Authority's rules and regulations; (iv) no major maintenance of aircraft shall be performed on the ramp, except for emergency repairs; and (v) the Facilities shall not be used for any other purposes without the prior written consent of the Authority. (b) PROHIBITED USES The Lessee shall not knowingly permit the loading, unloading or storage of any hazardous animate or inanimate materials or objects in violation of any applicable law or regulation. The Lessee shall not store or transport Class-A Explosives as defined in 49 CFR Part 107.3, except in compliance with applicable law. The Lessee's handling of any hazardous material shall be in accordance with 49 CFR, parts 100-199, dated December 31, 1976, or as same may be amended. In no event shall the Lessee knowingly handle any materials which would void or reduce the insurance coverage of the Facilities required of the Lessee herein. Section 202. REPRESENTATIONS BY THE AUTHORITY. The Authority makes the following representations as the basis for the undertakings on its part herein contained: (a) The Authority is duly organized as a municipal corporation pursuant to the laws of the State and has the power to enter into the transactions contemplated by this Agreement and 6 the Indenture and to carry out its obligations hereunder and thereunder. By proper corporate action, the Authority has been duly authorized to execute and deliver this Agreement. (b) This Agreement has been duly executed and delivered by duly authorized officers of the Authority. (c) This Agreement constitutes the valid and binding obligation of the Authority, enforceable against the Authority in accordance with its terms. (d) No approvals or consents are necessary in order for the Authority to adopt, execute and deliver this Agreement, the Indenture and the Series 1994 Bonds. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, conflict with or result in a breach of any of the terms, conditions or provisions of any restriction, ordinance or any agreement or instrument to which the Authority is now a party or by which it is bound, or constitute a default under any of the foregoing, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Authority under the terms of any instrument or agreement. (f) There is no litigation now pending or, to the Authority's knowledge, threatened challenging the powers of the Authority or its directors or in any way affecting this Agreement, the Indenture or the Series 1994 Bonds. (g) The Authority represents and warrants that it has good title to the Leased Premises, free and clear of all material liens and encumbrances having priority over this Agreement, and that the Authority has full right and authority to lease the same as set forth herein. (h) The Authority represents and certifies that to the best of its knowledge the Leased Premises was not a site used for the storage or disposal of hazardous waste. (i) The Authority represents and warrants that it will: (i) not take any actions that would cause the interest on any Tax Exempt Bonds to no longer be excludable from gross income for federal tax purposes; and (ii) take such affirmative actions to protect the tax status of the Tax Exempt Bonds that the Lessee or the Trustee shall reasonably request in writing and certify as necessary to preserve the tax status of the Tax Exempt Bonds; provided that the Authority shall not be obligated to undertake any such action until (a) it consents in writing to take such action, which consent shall not be unreasonably withheld, (b) the Authority has been indemnified to its satisfaction with respect to such action and (c) provision has been made to reimburse the Authority for any costs incurred in connection with taking such action. Except as specifically provided above, the Authority shall have no obligation to take any affirmative 7 actions to protect the tax status of the Tax Exempt Bonds and shall have no obligation to pay amounts necessary to comply with this covenant, other than from money received by the Authority from the Lessee. The Lessee shall have the sole responsibility for computing any amounts owed to the United States of America pursuant to Section 148 of the Code and with 615(b) hereof with respect to Tax Exempt Bonds and providing for the payment of such amounts to the United States of America in the manner provided in the Series 1994 Tax Representation Certificate and the tax representation certificate executed contemporaneously with the issuance of any other Tax Exempt Bonds. Section 203. REPRESENTATIONS AND WARRANTIES BY THE LESSEE. The Lessee makes the following representations and warranties as the basis for the undertakings on its part herein contained: (a) The Lessee is a corporation duly organized under the laws of the State of Delaware and duly qualified to do business in the State, is in good standing in the State of Delaware and the State, has power to execute and enter into this Agreement, and by proper corporate action has been duly authorized to execute and deliver this Agreement. (b) The Lessee will execute the Series 1994 Tax Representation Certificate, dated the date of delivery of the Series 1994 Bonds, setting forth certain covenants, representations and warranties, which Series 1994 Tax Representation Certificate is incorporated herein and included as a part of this Agreement by reference. The Lessee represents that the representations set forth in the Series 1994 Tax Representation Certificate will be accurate as of such date and covenants to comply with the covenants set forth in the Series 1994 Tax Representation Certificate. (c) The Lessee hereby makes an irrevocable election not to claim depreciation or an investment tax credit with respect to the Special Facilities in accordance with Section 142(b)(1)(B)(i) of the Code, such that the Series 1994 Bonds shall qualify under Section 142(a)(1) of the Code. The tax identification number of the Lessee is 71-0427007. (d) This Agreement constitutes the valid and binding obligation of the Lessee, enforceable against the Lessee in accordance with its terms, subject to normal exceptions for the effect of creditors' rights and equitable remedies. (e) No approvals or consents, other than those that have been or will in normal course be obtained, are necessary in order for the Lessee to execute and deliver this Agreement. (f) There is no litigation now pending or, to the Lessee's knowledge, threatened, challenging the corporate existence of the Lessee and, except for matters described under "Legal Proceedings" in the Lessee's Annual Report on Form 10-K for the Lessee's fiscal year ended May 31, 1994, there is no pending, or to the Lessee's knowledge, threatened action or proceeding before any court or administrative agency that individually (or in the aggregate in the case of any 8 group of related lawsuits) is expected to have a material adverse effect on the financial condition of the Lessee or the ability of the Lessee to perform its obligations under this Agreement or the Series 1994 Guaranty. (g) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, will conflict with or result in a material breach of the Restated Certificate of Incorporation or By-laws of the Lessee or any of the terms, conditions or provisions of any indenture, agreement or other instrument to which the Lessee is now a party or by which it is bound, or constitute a material default under any of the foregoing, or result in the creation or imposition of any material lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Lessee under the terms of any instrument or agreement. (h) The Lessee has duly and validly obtained all material certificates, licenses and permits from all public authorities, both federal and state, required to enable the Lessee to carry on its business as it is now conducted and to enter into this Agreement. 9 ARTICLE III COMMENCEMENT AND COMPLETION OF FACILITIES; ISSUANCE OF BONDS Section 301. PLANS AND SPECIFICATIONS, APPROVALS,CONSTRUCTION, CONSTRUCTION CONTRACTS; UTILITIES. (a) LOCATION IMPROVEMENT PERMIT. The Lessee covenants and agrees that, prior to the preparation of detailed plans and specifications for any of the Facilities, it shall first obtain an airport location improvement permit from the Authority by submitting to the Airport Director for approval plans showing the general site plan, design and character of improvements and their locations relative to the Leased Premises, including location of drainage, utilities and roadways. (b) APPROVAL OF PLANS AND SPECIFICATIONS. In connection with construction of any of the Facilities, the Lessee shall cause preliminary plans and specifications, together with the estimated cost of such portion, to be prepared by the Architect, which shall be submitted to the Authority for its approval. The Authority shall approve or suggest reasonable revisions to such preliminary plans and specifications within ten (10) days from the date of receipt thereof, and shall submit the same to the Lessee. If the Authority fails to respond within that ten (10) day period, the preliminary plans and specifications shall be deemed approved. If within said ten (10) day period the Authority notifies the Lessee of items of which it disapproves, the Lessee shall thereafter cause such Architect to prepare revised preliminary plans and specifications that take into consideration any revisions suggested by the Authority, at which time the revised preliminary plans and specifications shall be submitted to the Authority for approval in the manner provided herein. After the Authority has approved such preliminary plans and specifications, the Lessee shall cause the Architect to prepare final plans and specifications. The final plans and specifications shall be submitted by the Lessee to the Authority for review and approval in the same manner as the preliminary plans and specifications were reviewed and approved. If the Authority fails to respond to the Lessee in writing within ten (10) days after submission of any of the plans and specifications contemplated by this Subsection (b), then such plans and specifications shall be deemed approved for purposes of this Subsection (b). Upon approval such final plans and specifications shall become the Plans and Specifications. (c) PROVISIONS CONCERNING DESIGN. The Plans and Specifications for any of the Facilities shall meet the Authority's design standards for the type of development proposed. The Lessee covenants and agrees that all construction or installation of any building, roadway, structure, addition, or improvement on the Land will be in accordance with such Plans and Specifications and the Authority's Minimum Standards for Installation of Aircraft Fueling Systems as outlined in Exhibit "D", attached hereto and the Authority's Development Guidelines for Airside and Corporate Village as outlined on Exhibit "E" attached hereto. 10 (d) PROVISIONS CONCERNING DESIGN CHANGES. The Lessee may initiate whatever design changes to the Plans and Specifications it deems necessary or desirable; provided, however, that any such changes shall be subject to approval by the Authority prior to implementation for consistency with the Plans and Specifications and the mutually contemplated use of the Facilities as set forth in Subsection 201(a) of this Agreement. Review of such design changes shall be conducted in the same time and manner as review of the Plans and Specifications as set forth in Subsection (b) hereof and shall otherwise comply with Subsection (c) hereof. (e) COMPLIANCE WITH LAWS. Contracts relating to the designing, equipping and constructing of the Facilities shall include those provisions agreed to by the Lessee and the Authority for the purposes intended and shall comply in all respects with State and federal law and the provisions of this Agreement. The Facilities shall be constructed and equipped in compliance with all State, federal and local laws, ordinances and regulations applicable thereto. (f) PERMITS. The Lessee, with the cooperation of the Authority, shall obtain or cause to be obtained all other necessary approvals and permits from any and all governmental agencies prior to constructing and equipping any of the Facilities. (g) OCCUPANCY PERMITS. Upon completion of the construction and equipping of any of the Facilities, the Lessee shall furnish to the Authority all required occupancy permits and authorizations from appropriate authorities, if any are required, authorizing the occupancy and use thereof for the purposes described herein. (h) ADDITIONS AND CHANGES. The Lessee may, at its sole cost and expense, make such additions or changes to the Facilities as it shall desire, provided that the Lessee: (1) obtains all requisite governmental permits, licenses and approvals, including an airport location improvement permit issued by the Authority in the manner provided in Subsection 301(a) hereof; and (2) prosecutes the work in a workmanlike and diligent manner in compliance with the Plans and Specifications therefor, all laws and regulations and the other provisions of this Agreement. (i) LAYOUT. The Lessee may change the location of a structure on the Land from the location approved in Subsection (a) hereof, subject to submission to the Authority for its review and approval of any such change in the same manner as the preliminary plans and specifications are required to be reviewed and approved hereunder.The provisions of this Subsection (i) shall not constitute an approval for purposes of Subsection (a) hereof. (j) The Lessee shall construct with moneys held in the Series 1994 Account of the Construction Fund or at its expense: 11 (1) all necessary utility lines required for the Lessee to connect utility services for the Special Facilities to the line of existing service in the utility corridor on the Southern boundary of the Land; (2) the connecting roadways to the existing roadway system; and (3) all necessary utility lines required for the Lessee to connect the utility services for any portion of the Leased Premises (other than the Special Facilities) or for any Lessee Improvement. The Authority agrees to grant to the Lessee all necessary roadway or utility easements required for the Lessee to meet its obligations under this Subsection (j). Section 302. AGREEMENT TO ISSUE SERIES 1994 BONDS; APPLICATION OF PROCEEDS; THE LESSEE REQUIRED TO PAY COSTS OF CONSTRUCTION IF BOND PROCEEDS INSUFFICIENT. (a) The Authority shall issue the Series 1994 Bonds upon the execution and delivery of this Agreement to provide funds for paying the costs of designing, constructing and equipping of the Special Facilities and related costs of issuance of and capitalized interest on the Series 1994 Bonds. (b) The Series 1994 Bonds shall be issued under and in accordance with the Indenture, the form of which shall be approved by the Lessee prior to the adoption thereof. (c) The proceeds of the Series 1994 Bonds shall be deposited with the Trustee in the Funds and Accounts specified in the Indenture. Proceeds of the Series 1994 Bonds deposited in the Series 1994 Account of the Construction Fund shall be disbursed by the Trustee for the payment of costs of the Special Facilities in accordance with the Indenture. (d) In the event that funds held in the Series 1994 Account of the Construction Fund available for payment of the costs of the Special Facilities are insufficient, the Lessee shall: (i) provide funds to pay for any remaining costs of the Special Facilities; (ii) appropriately reduce the scope of the Special Facilities so that such funds will be sufficient if such reduction in scope, in the opinion of Bond Counsel, will not adversely affect the exclusion from gross income of the interest on the Series 1994 Bonds for federal income tax purposes; or (iii) cause the Authority to issue Additional Bonds pursuant to Article XII hereof to the extent necessary to provide sufficient funds for such purposes, provided that, in the opinion of Bond Counsel, the issuance of such Additional Bonds will not affect the exclusion from gross income of the interest on the Series 1994 Bonds for federal income tax purposes. 12 (e) The Authority does not make any warranty, either express or implied, that the Special Facilities can or will be constructed for the estimated cost therefor, or that the moneys paid into the Series 1994 Account of the Construction Fund and available for payment of the costs of the Special Facilities shall be sufficient for that purpose. The Lessee agrees that if, after exhaustion of such funds, the Lessee pays any portion of the costs of the Special Facilities for any reason whatsoever, it shall not be entitled to any reimbursement therefor from the Authority (except reimbursement from the proceeds of Additional Bonds, if any) nor shall the Lessee be entitled to any set-off or diminution of the rentals or other amounts payable under this Agreement. (f) Lessee is authorized as tenant to design, construct and equip the Special Facilities pursuant to the provisions of the Construction Management Agreement. Section 303. AS-BUILT DRAWINGS. Within thirty (30) days following completion of the construction of any of the Special Facilities, any Lessee Improvement or any other improvements on the Land, the Lessee shall present to the Authority a complete set of reproducible (mylar) "record" drawings including, but not limited to, specifications and shop drawings. This information shall be submitted by the Lessee on a computer diskette using Autocadd Version 11 or any more recent version as of that date (or any successor technology). Similar record drawings shall be provided by the Lessee as additional facilities are constructed or if any material alterations are made in any of the facilities included in the Leased Premises. Section 304. COST OF CONSTRUCTION AND PRELIMINARY COMPLETION CERTIFICATES. Within sixty (60) days of the date upon which each Phase of the Special Facilities has been substantially completed and available for its intended use, the Lessee shall present to the Authority for examination and approval a sworn statement setting forth all amounts incurred to such date of substantial completion by the Lessee as construction manager for the Authority with respect to such Phase of the Special Facilities and the economic lives of the buildings, structures, additions, improvements, fixtures, facilities and equipment that comprise such Phase. Section 305. ESTABLISHMENT OF THE COMPLETION DATE, OTHER COMPLETION CERTIFICATES. (a) The Completion Date of the Special Facilities shall be evidenced to the Authority and the Trustee by a certificate signed by the Lessee to the effect: (i) that the design, construction and equipping of the Special Facilities has been completed and (ii) that the Lessee has made a reasonable investigation of such sources of information it deems necessary and is of the opinion that the Special Facilities have been fully paid for and that no claim or claims exist against the Authority or the Lessee or against the properties of either out of which a lien based on furnishing labor or material for the Special Facilities might ripen. Such certificate shall be delivered within one hundred twenty (120) days of the first day on which the conditions set forth in both (i) and (ii) above have been satisfied. 13 (b) Within one hundred twenty (120) days of the date each Phase of the Special Facilities has been finally completed and all amounts due and owing with respect thereto have been paid, the Lessee shall certify to the Authority the final amounts paid by the Lessee as construction manager for the Authority with respect to such Phase. Section 306. THE LESSEE TO PURSUE REMEDIES AGAINST CONTRACTORS, SUBCONTRACTORS AND SUPPLIERS AND THEIR SURETIES. (a) In the event of default or breach by any contractor, subcontractor, manufacturer or supplier under any contract made in connection with the design, construction and equipping of the Leased Premises, the Lessee may, in its discretion, either separately or in conjunction with the Authority, pursue the remedies of the Authority and/or the Lessee against the contractor, subcontractor, manufacturer or supplier so in default and against any surety for the performance of that contractor, subcontractor, manufacturer or supplier, or against a contractor, subcontractor, manufacturer or supplier for breach of warranty. (b) In the event that the Lessee shall, after thirty (30) days written notice from the Authority, fail to pursue its remedies under such contracts, the Authority may pursue such remedies and, except as provided in Subsection (c) hereof, (i) the Lessee shall permit the Authority to be reimbursed from the Construction Fund for one hundred percent (100%) of its reasonable costs with respect thereto to the extent that moneys are available in the Construction Fund; and (ii) if the moneys available in the Construction Fund are not equal to at least one- half of the Authority's reasonable costs with respect thereto, then the Lessee shall reimburse the Authority an amount which, when added to the amount available in the Construction Fund, would total one-half its reasonable costs with respect thereto. (c) The Lessee agrees to advise the Authority of any default by a contractor, subcontractor, manufacturer or supplier in connection with the construction of all or a portion of the Leased Premises which is material to the operations of the Leased Premises and of any legal actions or proceedings the Lessee intends to commence in connection with any such breach or default. (d) The Authority agrees, if requested by the Lessee, to cooperate with and assist the Lessee in any such proceeding and to join in any such proceeding, or allow such proceeding to be brought in its name if necessary. Any amount recovered by way of damages, refunds, adjustment or otherwise in connection with the foregoing shall be disbursed in the following order: (i) for reimbursement of costs to the Lessee if the Lessee pursues the recovery on its own and for reimbursement of costs proportionately to the Lessee and the Authority (measured by the costs incurred by each party in pursuit of such recovery) if the Authority joins in the pursuit or pursues recovery in lieu of the Lessee; 14 (ii) for the repair, restoration or completion of the Leased Premises or the relevant portion thereof; and (iii) the balance to the Lessee. Section 307. CONSTRUCTION OF ADDITIONAL FACILITIES.. (a) The Lessee has the right at its own expense to construct additional buildings or facilities on the Land or to improve, expand or better the Special Facilities all in compliance with the provisions of this Agreement. In such event, the use thereof shall be enjoyed by the Lessee during the term hereof without additional rental therefor. Such buildings, facilities, improvements, additions and betterments shall be Lessee Improvements and shall be the property of the Lessee during the term of this Agreement, except as provided in Section 308 hereof. Notwithstanding the provisions of paragraph (ii) of Subsection 602(a) hereof, the Lessee shall have within its sole discretion and subject to Sections 301 and 303 hereof, the right to remove, replace or renovate any Lessee Improvement, provided, however, that during the final year of the term hereof the Lessee shall not remove any Lessee Improvement or otherwise alter such Lessee Improvement so as to materially decrease the value thereof without first obtaining the written consent of the Authority. (b) The Lessee shall also be able to locate on the Leased Premises or install in the Special Facilities or the Lessee Improvements any Excluded Personal Property, which Excluded Personal Property shall not become part of the Special Facilities or the Leased Premises. Section 308. OWNERSHIP OF IMPROVEMENTS. All Excluded Personal Property and Lessee Improvements shall be the property of the Lessee during the term of this Agreement. Notwithstanding the foregoing, the Lessee shall have the right at all times during the term of this Agreement to convey, and the Authority shall take, title to all or a portion of the Lessee Improvements. Upon such conveyance, the buildings, structures, improvements, fixtures and facilities so conveyed shall cease to be Lessee Improvements and from such point forward shall constitute a portion of the Leased Premises. Upon the termination of this Agreement: (i) the Excluded Personal Property shall remain the property of the Lessee, and (ii) the Lessee Improvements then remaining shall become the property of the Authority. 15 ARTICLE IV TERM; EXPANSION OPTION Section 401. TERM. (a) The term of this Agreement shall commence on the date of the execution hereof and shall terminate on January 20, 2017, or such earlier date determined pursuant to the provisions of Subsection (b) hereof. Notwithstanding the stated commencement date of this Agreement, the lease for the Special Facilities shall commence on the weighted average date that the Special Facilities have been placed in service (within the meaning of Section 147(b)(3) of the Code). (b) Not more than ninety (90) days after the final Phase of the Special Facilities is placed in service (within the meaning of Section 147(b)(3) of the Code), the Lessee shall deliver to the Authority an opinion of Bond Counsel to the effect that: (i) a termination date for this Agreement of January 20, 2017 will not adversely affect the exclusion from gross income of the interest on the Tax Exempt Bonds, or (ii) a termination date earlier than January 20, 2017 will be required in order to maintain the exclusion from gross income of the interest on the Tax Exempt Bonds (which opinion shall state the latest permissible termination date, which date shall be deemed to be the date of termination of this Agreement). Section 402. RIGHTS AT EXPIRATION. (a) In the event the Lessee shall continue to occupy the Leased Premises beyond the Agreement term without the Authority's written renewal thereof, such holding over shall not constitute a renewal or extension of this Agreement, but shall create a tenancy from month to month which may be terminated at any time by the Authority or the Lessee by giving thirty (30) days written notice to the other party. (b) The Lessee further agrees that upon the expiration of the term of this Agreement or sooner cancellation thereof, the Leased Premises will be delivered to the Authority in good condition, reasonable wear and tear, matters covered by insurance and damages from condemnation excepted. (c) The Lessee further agrees that upon the expiration of the term of this Agreement or sooner cancellation thereof, the Lessee shall execute such instruments as are necessary to convey title to the Lessee Improvements, to the Authority, and such Lessee Improvements and the Leased Premises shall be delivered to the Authority free and clear of all liens not consented to by the Authority. Section 403. THE LESSEE'S OPTION TO EXPAND THE PARKING LAND. The Lessee is granted an option to lease, in whole or in part, an expansion area of real estate particularly identified on the attached Exhibit A under the heading "Parking Land Option" and lying contiguous to the Parking 16 Land. The Lessee may elect to exercise this option to lease part or all of the expansion area during the term hereof by giving the Authority written notice of such election and by paying additional rent therefor, commencing ninety (90) days after such notice is given, at the rate then in effect for the Parking Land as determined in Section 501. Exercise of the option for a part of the expansion area shall not terminate the option as to the remainder of the expansion area. At any time prior to the exercise of such option, the Authority may give the Lessee written notice of its intent to lease, use, or otherwise dispose of the expansion area or part thereof specifying therein the intended use thereof. Upon receipt of such written notice, the Lessee shall have ninety (90) days to notify the Authority if it intends to exercise its option to lease the expansion area land specified in the Authority's notice and to begin paying the appropriate additional rental therefore. In the event such election is not made within said ninety (90) day period, the option of the Lessee to lease the specified expansion area land shall terminate; provided, however, if the transaction contemplated in the Authority's notice to the Lessee is not consummated within one (1) year of the Authority's notice to the Lessee, the Lessee's option to lease the specified expansion area land shall be reinstated. Any portion of the expansion area with respect to which the Lessee's option is exercised shall become a part of the Parking Land leased hereunder and shall be subject to the terms of this Agreement. The exercise of an option under this Subsection shall not serve to extend the term of the Agreement. Section 404. EXPIRATION. This Agreement shall expire and terminate at the end of the term specified in Section 401 hereof, and the Lessee shall have no further right or interest in the Leased Premises except as provided in Section 1405. 17 ARTICLE V RENTALS AND FEES Section 501. GROUND RENT. The Lessee shall pay to the Authority ground rentals for the Land according to the following schedule: (a) For the Primary Land: (i) For the period commencing on the date of execution of this Agreement and ending on December 31, 1996, a rate of $.152 per square foot per year for 1,906,193 square feet and a rate of $.05 per square foot per year for 4,446,597 square feet for a total rent for the Primary Land during such period as follows: 1,906,193 sq. feet @ $.152 $289,741.37 4,446,597 sq. feet @ $.05 222,329.85 ---------- Total Annual Rent for Primary Land $512,071.22 Monthly Rent for Primary Land $ 42,672.60 (ii) For the period commencing January 1, 1997 and ending on December 31, 2006, a rate of $.166 per square foot per year for 1,906,193 square feet and a rate of $.07 per square foot for 4,446,597 square feet for a total rent for the Primary Land during such period as follows: 1,906,193 sq. feet @ $.166 $316,428.04 4,446,597 sq. feet @ $.07 311,261.79 ---------- Total Annual Rent for Primary Land $627,689.83 Monthly Rent for Primary Land $52,307.49 (iii) For the period commencing January 1, 2007 and continuing thereafter through the term of this Agreement at a rate of $.196 per square foot per year for 1,906,193 square feet and a rate of $.10 per square foot per year for 4,446,597 square feet for a total rent for the Primary Land during such period as follows: 18 1,906,193 sq. feet @ $.196 $373,613.83 4,446,597 sq. feet @ $.10 444,659.70 ---------- Total Annual Rent for Primary Land $818,273.53 Monthly Rent for Primary Land $68,189.46 (b) For the Parking Land (i) For the period commencing on the earlier of the date the parking lot Phase of the Special Facilities has been substantially completed and available for its intended use or January 1, 1995 (the "Commencement Date") and ending on the fifth anniversary of the Commencement Date a rate of $.10 per square foot for 1,738,922 square feet of the Parking Land per year, for a total rent for the Parking Land during such period as follows: Total Annual Rent for Parking Land $173,882.20 Monthly Rent for Parking Land $ 14,490.18 (ii) Beginning with the fifth anniversary of the Commencement Date described in paragraph (1) above and on each fifth anniversary thereafter, the ground rental rates for the Parking Land will be adjusted for each succeeding five (5) year period. Rental for each five (5) year period shall be the greater of either the preceding period rental or such preceding period rental plus any increase in the cost of living during said five (5) year period reflected by the "United States Bureau of Labor Statistics, Consumer Price Index, All Urban." Such monthly increase during each rental period shall be computed by multiplying the preceding period rental by a fraction, the numerator of which shall be such index figure as of the third month next preceding the end of the then current period and the denominator of which shall be such index figure as of the third month prior to commencement of the then current period. In the event that the Bureau of Labor Statistics shall change its base period (1982-84 = 100), the new index numbers shall be substituted for the old index numbers in making the above computations. In the event the Consumer Price Index of the United States Bureau of Labor Statistics is discontinued, comparable statistics on the purchasing power on the consumer dollar, as published at the time of said discontinuance by a responsible financial periodical of recognized authority shall be used for making such computation. (c) If at any time during the term hereof the Primary Land or Parking Land is substituted with other land due to a condemnation, such substituted land shall become a part of 19 the Primary Land or Parking land, respectively, and the total rents due pursuant to (a) and (b) hereof shall take into effect any increase or decrease of the area of such Primary Land or Parking Land. Section 502. SPECIAL FACILITIES RENTAL. So long as any Bond is Outstanding, the Lessee shall pay to the Authority, by depositing with the Trustee, a rental (the "Special Facilities Rentals") payable without demand, either: (i) in next day funds pursuant to an automated clearinghouse transfer, one (1) Business Day prior to the date on which principal of, interest and premium, if any, are due on the Bonds, or (ii) in same day funds prior to 10:00 a.m. Indianapolis time on the date on which principal of, interest or premium, if any, are due on the Bonds, in either case in an amount equal to such principal of, interest or premium payments due on the Bonds whether at maturity, upon redemption, by acceleration or otherwise; provided that in the case of each payment the amount thereof shall be reduced by an amount equal to any amount then held by the Trustee in the Bond Fund which is available for such payment. Section 503. FIELD USE CHARGES. The Lessee is not granted hereunder the right to use any aircraft parking apron or taxiway not on the Land for the use of itself or its tenants, but nothing herein shall abrogate any rights the Lessee may have for such use pursuant to other agreements with the Authority. Any use of aircraft operational areas outside of the Land by the Lessee or the Lessee's tenants or agents shall be by separate agreement and payment of appropriate fees. Nothing in this Section, however, shall prohibit the Lessee or its tenants from the joint use with others at the Airport of interior and exterior roadways serving the Land in accordance with Airport rules, regulations and/or restrictions. Section 504. TIME AND PLACE OF PAYMENTS. (a) The ground rentals due under Section 501 hereof shall be payable in equal monthly installments in advance on or before the first business day of each calendar month of the term at the office of the Airport Director at the address set forth in Section 1811 hereof. (b) The Special Facilities Rentals payable pursuant to Section 502 hereof shall be payable to the Authority at the principal corporate trust office of the Trustee for deposit in the Bond Fund. Section 505. DELINQUENT RENTALS. In the event ground rentals due pursuant to Section 501 hereof shall not be paid by the Lessee on the due date thereof, the Lessee shall pay to the Authority as additional rental, an interest charge at the interest rate established by ordinance by the Airport Authority Board, from time to time, on the amount due for each full calendar month of delinquency computed as simple interest. No interest shall be 20 charged upon that portion of any ground rental which, in good faith, is not paid because it is in dispute. No interest shall be charged until payment is thirty (30) days overdue, but such interest when assessed thereafter, shall be computed from the due date. Section 506. ASSIGNMENT OF RIGHTS. As security for the payment of the Bonds, the Authority shall assign to the Trustee the Trust Estate. The Lessee hereby assents to the assignment of such rights hereunder. The Trustee shall not be responsible for those rights and obligations of the Authority not assigned to the Trustee as part of the Trust Estate. Section 507. OBLIGATIONS OF THE LESSEE HEREUNDER UNCONDITIONAL. The obligation of the Lessee to make the payments required under Section 502 hereof and to pay the premiums or charges necessary to maintain or cause to be maintained the insurance required by Article IX shall be absolute and unconditional and shall not be subject to any defense (other than payment) or any right of set-off, counterclaim, abatement or otherwise. The Lessee shall not suspend, postpone, discontinue or permit the suspension, postponement or discontinuance of any such payments referred to in Section 502. Each payment referred to in Section 502 made by the Lessee pursuant to this Agreement shall be final and the Lessee shall not seek to recover all or any part of such payment from the Trustee or any holder of the Bonds for any reason whatsoever. Nothing contained in this Section 507 shall be construed to relieve the Authority or the Trustee from the performance of any of the agreements on their part contained herein or in the Indenture or to constitute a waiver by the Lessee of its rights to enforce the performance thereof or to recover from the Authority damages for the Authority's failure to perform its covenants hereunder. Section 508. PREPAYMENT OF GROUND RENTALS. Any prepayment of ground rentals due pursuant to Section 501 hereof shall be applied by the Authority to the next ensuing payments in order of their due dates. 21 ARTICLE VI OBLIGATIONS OF THE LESSEE Section 601. NET LEASE. It shall be the sole responsibility of the Lessee to maintain, repair and operate the entirety of the Facilities at the Lessee's sole cost and expense. Section 602. MAINTENANCE AND OPERATION. (a) The Lessee shall at its own expense: (i) keep the Facilities in as reasonably safe, neat and attractive condition as its operation shall permit and in good repair; (ii) keep the Leased Premises in good repair and in good operating condition, making from time to time all necessary repairs thereto (including external and structural repairs) and renewals and replacements thereof, ordinary wear and tear, matters covered by insurance and damages from condemnation excepted (subject to the rights of the Lessee set forth in Subsection 307(a) hereof with respect to any Lessee Improvement); and (iii) shall repaint the Facilities as necessary. (b) The Lessee shall be responsible for and perform all maintenance of the Facilities, including but not limited to: (i) janitorial services, providing janitorial supplies, window washing, rubbish, and trash removal; (ii) supply and replacement of light bulbs in and on all buildings, obstruction lights and replacement of all glass in the Facilities, including plate glass; (iii) cleaning of stoppages in plumbing fixtures, drain lines and septic system to the first manhole outside the Facilities; (iv) maintenance of all building and overhead doors and door operating systems including weather stripping; (v) interior and exterior maintenance to the Facilities; (vi) removal of snow on the Facilities in a manner which does not interfere with the Authority's Airport operations or damage to the Facilities; (vii) maintenance on utilities to (i) the point where connected to the main source of supply, (ii) the first manhole outside of the Facilities or (iii) the utility corridor, whichever is closest to the Facilities; and (viii) maintenance and relamping of all lights in and on the Facilities. 22 (c) The Lessee shall: (i) repair or replace electrical, mechanical and plumbing equipment in the Facilities, including but not limited to air conditioning and heating equipment but excluding Excluded Personal Property. (All repairs to electrical and mechanical equipment shall be made by licensed personnel. Other repairs shall be made by craftsmen skilled in work done and performing such work regularly as a trade); (ii) advise the Authority and obtain the Authority's consent in writing before making changes involving structural changes to the Leased Premises, including any penetration of the roof thereof, modifications or additions to plumbing, electrical or other utilities; (iii) prevent the voiding of roof bond(s) and shall maintain correct records with respect thereto; (iv) maintain electric loads within the designed capacity of the system. (Prior to any change desired by the Lessee in the electrical loading which would exceed such capacity, written consent shall be obtained from the Airport Director); (v) provide and maintain hand fire extinguishers for the interior of the Facilities, including shop, parking and storage areas in accordance with applicable safety codes; (vi) maintain the grounds and replace all landscaping on the Land as originally approved and installed, and will not allow the removal of trees without permission of the Authority. (vii) on or before the date that is five years after the final Phase of the Special Facilities has been substantially completed and available for its intended use and every fifth year thereafter, supply its maintenance plan for the Leased Premises to the Authority; and (viii) consider in good faith any recommendation of the Authority as to necessary repairs of the Leased Premises. (d) No waste shall be committed to the Leased Premises. Section 603. UTILITIES. The Lessee shall assume and pay for all costs or charges for utilities services furnished to the Lessee during the term hereof. The Lessee shall have the right 23 to connect to any and all storm and sanitary sewers and water and utility outlets at its own cost and expense; and the Lessee shall pay for any and all service charges incurred therefor. Section 604. TRASH, GARBAGE AND OTHER REFUSE, SIGNS. (a) The Lessee shall pick up, and provide for, a complete and proper arrangement for the adequate sanitary handling and disposal, away from the Airport, of all trash, garbage, and other refuse caused as a result of its operation on the Land. The Lessee shall provide and use suitable covered metal receptacles for all such garbage, trash, and other refuse on the Land or in the Facilities. (b) Piling of boxes, cartons, barrels, pallets, debris, or similar items in an unsafe or unreasonably unkempt manner, on or about the Facilities, shall not be permitted. (c) The Lessee shall not erect, maintain, or display upon the outside of any of the Facilities any billboards or advertising signs; provided, however, that the Lessee may maintain on the outside of said buildings its own name and services on signs, the size, location and design of which shall be subject to prior written approval by the Authority. Section 605. HAZARDOUS MATERIALS. (a) The Lessee shall use, store and dispose of any Hazardous Materials used or knowingly transported by it only in compliance with all Laws. The Lessee shall furnish to the Authority a list of such Hazardous Materials, except for items shipped or stored by the Lessee for its customers. The Lessee shall remediate any Hazardous Materials or cause any Hazardous Materials to be remediated so as to avoid Liability under any Environmental, Health and Safety Requirements if the Hazardous Materials were first placed on, present at, manufactured at, stored at, disposed of from, released from or emitted from the Facilities after the date of delivery of the Facilities. If the presence of any such Hazardous Materials in or on the Facilities results in any contamination, the Lessee shall promptly take all actions at its sole expense as are necessary to return the Facilities to the conditions existing prior to the placement, presence, manufacture, storage, disposal, release or emission of such Hazardous Materials; provided that the Authority must first approve of such actions, which approval shall not be unreasonably withheld so long as such actions would not potentially have a material adverse long-term or short-term effect on the Facilities or any other portion of the Airport. If the presence of such Hazardous Materials on or the release of such Hazardous Materials from the Facilities was caused by a third person, the Authority agrees to cooperate with the Lessee in pursuing the third person for the collection of remediation costs and other damages resulting therefrom; provided, that the Authority shall be permitted to recover proportionately with the Lessee the Authority's expenses and costs associated with pursuing such actions. 24 (b) The Lessee shall indemnify, defend and hold the Authority harmless from any and all claims, judgments, damages, penalties, fines, costs, Liabilities or losses asserted against, resulting to, imposed upon or suffered by the Authority to the extent arising from, attributable to, or relating in any manner to (i) a breach by the Lessee of the obligations in Subsection (a) of this Section 605 or (ii) injury to person or property as a result of the presence or release of Hazardous Materials on or from the Facilities on or after the date of delivery of the Leased Premises, which is caused or permitted by or on behalf of the Lessee, including Hazardous Materials knowingly or unknowingly transported by the Lessee for its customers. This indemnification of the Authority by the Lessee includes, without limitation, costs incurred by the Authority in connection with any investigation of site conditions or any cleanup, remedial, removal, restoration or monitoring work performed by any individual or entity, regardless of whether that investigation or work is required by any federal, state or local governmental agency or political subdivision because of the presence or release of Hazardous Materials in the soil or ground water on or from the Facilities, and shall survive the cancellation, termination or expiration of the term of this Agreement. (c) The Lessee covenants and agrees to provide to the Authority, within five (5) Business Days of receipt, copies of any correspondence, notices, pleading, citation, indictment, complaint, order, decree or other document from any source asserting or alleging a circumstance or condition that requires, or may require, a clean-up, removal, remedial action, or other response by or on the part of the Lessee at the Facilities under Laws or which seek criminal or punitive penalties from the Lessee for an alleged violation of any Laws. The Lessee further agrees to advise the Authority in writing as soon as the Lessee becomes aware of any condition or circumstance which may result in a potential violation of any Laws. (d) The Lessee agrees, upon the reasonable request of the Authority where the Authority has a reasonable basis to believe that a Law has been violated, to permit an environmental audit solely for the benefit of the Authority, to be conducted by the Authority or an independent agent selected by the Authority. If an audit reveals that a contamination of the Leased Premises exists, then the Lessee shall pay for the costs incurred in obtaining the audit. Otherwise, the Authority shall pay for such audit. This provision shall not relieve the Lessee from conducting its own environmental audits or taking all steps necessary to comply with Laws. (e) If there exists any uncorrected violation by the Lessee of a Law or any condition, caused directly or indirectly by the Lessee, which requires a cleanup, removal or other remedial action by the Lessee under any Laws, and such cleanup, removal or other remedial action is not initiated within thirty (30) days from the date of written notice from the Authority to the Lessee and diligently pursued to completion, the same shall, at the election of the Authority, constitute an Event of Default hereunder. Section 606. NONDISCRIMINATION. (a) The Lessee, for itself, its personal representatives, successors in interest, and assigns, as part of the consideration hereof, does hereby covenant and agree that it will comply with pertinent statutes, Executive Orders and such rules that are 25 promulgated to assure that (1) no person on the grounds of race, color, creed, sex, age or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination in the use of the Facilities; (2) that in the construction of any improvements on, over, or under such land and the furnishing of services thereof no person on the grounds of race, color, creed, sex, age or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination; (3) that the Lessee shall use the Facilities in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally-assisted programs of the Department of Transportation, Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended, to the extent that said requirements are applicable, as a matter of law, to the Lessee. (b) With respect to the Facilities, the Lessee agrees to furnish services on a fair, equal and not unjustly discriminatory basis to all users thereof, and to charge fair, reasonable and not unjustly discriminatory prices for each unit or service; provided, that the Lessee may be allowed to make reasonable and nondiscriminatory discounts, rebates, or other similar types of price reductions to volume purchasers. (c) Lessee assures that it will comply with pertinent statutes, Executive Orders and such rules as are promulgated to assure that no person shall, on the grounds of race, creed, color, national origin, sex, age, or handicap be excluded from participating in any activity conducted with or benefiting from Federal assistance. This Subsection (c) obligates the Lessee or its transferee for the period during which Federal assistance is extended to the airport program, except where Federal assistance is to provide, or is in the form of personal property or real property or interest therein or structures or improvements thereon. In these cases, this Subsection (c) obligates the Lessee or any transferee for the longer of the following periods: (a) the period during which the property is used by the Authority, the Lessee or any transferee for a purpose for which Federal assistance is extended, or for another purpose involving the provision of similar services or benefits; or (b) the period during which the Authority, the Lessee or any transferee retains ownership or possession of the Leased Premises. Section 607. AFFIRMATIVE ACTION. With respect to the Facilities, the Lessee assures that it will undertake an affirmative action program as required by 14 CFR Part 152, Subpart E, to insure that no person shall, on the grounds of race, creed, color, national origin or sex, be excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E; that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by that Subpart; and that it will require that its covered suborganizations provide assurance to the Lessee that they similarly will undertake affirmative action programs, and that they will require assurances from their suborganizations, as required by 14 CFR Part 152, Subpart E, to the same effect, to the extent that said requirements are applicable, as a matter of law, to the Lessee. 26 Section 608. OBSERVANCE OF STATUTES. The granting of this Agreement and its acceptance by the Lessee is conditioned upon the right to use the Airport in common with others authorized to do so, provided, however, that the Lessee shall observe and comply with any and all requirements of the constituted public authorities and with all federal, State or local statutes, ordinances, regulations and standards applicable to the Lessee for its use of the Facilities, including but not limited to, rules and regulations promulgated from time to time by the Airport Director for the administration of the Airport. Section 609. HAZARD LIGHTS. The Lessee shall, at its expense, provide and maintain hazard lights on any structure erected by the Lessee on the Land, if required by the Authority or Federal Aviation Administration ("FAA") regulations. Any hazard lights so required shall comply with the specifications and standards established for such installations by the FAA. Section 610. MECHANIC'S LIENS. (a) The Lessee herein agrees that if any mechanic's lien is filed upon any portion of the Facilities, the Lessee shall protect and save harmless the Authority against any loss, liability or expense whatsoever by reason thereof and shall proceed with or defend, at its own expense, such action or proceedings as may be necessary to remove such lien from the records to the extent that the Leased Premises or any portion thereof is affected. Upon receipt of notice thereof by the Authority, the Authority shall promptly give the Lessee written notice of the existence of any such mechanic's lien on the Facilities, but the failure of the Authority to give such notice shall not affect the responsibilities of the Lessee as set forth in this Section 610. (b) The Lessee may, however, in good faith and with due diligence, contest any mechanic's lien or other lien filed or established against all or any portion of the Facilities, and in such event may permit such lien or charge to remain undischarged and unsatisfied during the period of such contest and appeal therefrom, if (i) the Lessee shall effectively prevent or stay the execution, foreclosure or enforcement of such lien or charge, or (ii) such contest or appeal shall prevent or stay the execution or enforcement or foreclosure of such lien or charge. If such lien or charge is so stayed and such stay thereafter expires or the Authority gives the Lessee written notice that by nonpayment of any such items the Leased Premises or any portion thereof will be subject to loss or forfeiture, then the Lessee shall forthwith pay and cause to be satisfied and discharged such lien or charge or secure such payment by posting a bond, in form satisfactory to the Authority. The Authority shall cooperate fully with the Lessee in any such contest. (c) If the Lessee shall fail to contest, discharge or pay any such lien as required by Subsections (a) and (b) hereof, the Authority may, after having given the Lessee at least sixty (60) days' written notice of such failure, contest, discharge or pay any such lien which the Authority may determine to be necessary in order to protect its interest in the Leased Premises. In such event, the Lessee agrees to reimburse the Authority for any and all reasonable expenses and costs incurred by the Authority in respect thereto. 27 Section 611. THE LESSEE TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS UNDER WHICH EXCEPTIONS PERMITTED. The Lessee shall maintain its corporate existence, shall remain duly qualified to do business in the State, shall not dissolve or otherwise dispose of all or substantially all of its assets and shall not consolidate with or merge into another entity; provided that the Lessee may, without violating this Section 611, consolidate with or merge into another entity or permit one or more other entities to consolidate with or merge into it, or transfer or convey all or substantially all of its property, assets and licenses to another entity, but only if the entity resulting from or surviving such merger (if other than the Lessee) or consolidation or the entity to which such transfer or conveyance is made shall (1) expressly assume in writing and agree to perform all of the Lessee's obligations hereunder, (2) be qualified to do business in the State; and (3) if such entity shall not be organized and existing under the laws of the United States of America or any state or territory thereof or the District of Columbia, furnish to the Authority and the Trustee an irrevocable consent to service of process in, and to the jurisdiction of the courts of, the State with respect to any action or suit, at law or in equity, brought by the Authority or the Trustee to enforce this Agreement. Section 612. EQUIPMENT. (a) The Lessee shall acquire (or shall cause the Authority to acquire from moneys in the Construction Fund) the necessary equipment, fixtures, permanent inventory and other tangible personal property for use at the Special Facilities in order to operate the Special Facilities as contemplated by this Agreement. The Lessee shall continue to maintain in good working order and repair and keep fully insured each piece of Equipment, including, but not limited to, the furnishing of all parts, mechanisms and devices required to keep the Equipment in good mechanical and working order and repair, unless the same becomes irreparable, worn out, obsolete or is no longer needed by the Lessee to conduct its operations at the Special Facilities. The Lessee shall replace or substitute any Equipment necessary to maintain the operating utility or productive capacity of the Special Facilities (unless the same is not needed by the Lessee in the conduct of its operations) with replacement equipment of equal functional value and utility to the item replaced and such replacement equipment shall become a part of the Equipment when installed by the Lessee. (b) The Lessee shall undertake diligent efforts to properly identify the Equipment by appropriate tags or other means of identification. The Lessee shall, on or before each anniversary of the date the final Phase of the Special Facilities has been substantially completed and available for its intended use and at the expiration of the term or earlier termination of this Agreement, certify to the Authority a true and correct current itemized list of the Equipment indicating with particularity any changes from the previous certification. Section 613. SECURITY AGREEMENT. The Lessee shall have entrances and gates to the Air Operations Area (as defined in applicable regulations of the Federal Aviation Administration) 28 and shall execute, in connection with this Agreement, an Airport Security Agreement as required by the Authority in accordance with FAA regulations, Title 14 CFR Part 107, which agreement requires the Lessee to control and regulate any doors, openings or entrances to the Air Operations Area. Section 614. TAX EXEMPTION. The Lessee shall not take any action or suffer or permit any other action to be taken or condition to exist which causes or may cause the interest on any of the Tax Exempt Bonds to become included in gross income for purposes of federal income taxation; provided, however, that no Event of Default shall result from a breach of this covenant so long as the Lessee is complying with the provisions of Section 1005 hereof. Section 615. THE LESSEE'S COVENANTS CONCERNING THE SERIES 1994 BONDS. (a) The Lessee shall pay the ordinary fees and expenses of the Trustee for serving as the Trustee under the Indenture and the Series 1994 Guaranty and shall also pay to the Trustee all extraordinary fees and expenses incurred by the Trustee in enforcing the provisions of this Agreement, the Indenture or the Series 1994 Guaranty or otherwise serving in the capacity as the Trustee under the Indenture and the Series 1994 Guaranty. (b) The Lessee shall maintain or cause the Trustee to maintain accurate investment records for the purpose of determining the amount of arbitrage rebate that shall be owed with respect to the Series 1994 Bonds to the United States in order to comply with the requirements of Section 148 of the Code with respect to the Series 1994 Bonds . The Lessee shall compute and cause to be paid, in the manner and time provided in the Series 1994 Tax Representation Certificate, the arbitrage rebate that is required to be paid to the United States pursuant to Section 148 of the Code in order to preserve the tax status of the interest on the Series 1994 Bonds. (c) INVESTMENT OF FUNDS AND ACCOUNTS UNDER THE INDENTURE. Any moneys held in the Funds or Accounts established under the Indenture shall, at the written direction of the Lessee, be invested or reinvested by the Trustee in Investment Obligations in accordance with the provisions of the Indenture. (d) ADVANCES BY THE AUTHORITY AND TRUSTEE. In the event the Lessee shall fail to comply with any covenant or agreement set forth in this Agreement, the Authority or the Trustee may (but shall be under no obligation to) comply with said covenants and agreements. All amounts advanced by the Authority or the Trustee to comply with such agreements and covenants shall be paid by the Lessee to the one making the advancements, together with interest thereon at the Trustee's prime rate of interest 29 ARTICLE VII OBLIGATIONS OF THE AUTHORITY Section 701. OPERATION AS A PUBLIC AIRPORT. The Authority covenants and agrees that at all times it will operate and maintain the Airport as a public airport consistent with and pursuant to the sponsor's assurances given by the Authority to the United States Government under the Federal Airport and Airways Act. Section 702. INGRESS AND EGRESS. The Lessee shall have the right of ingress to and egress from the Facilities for the Lessee, its officers, employees, agents, servants, customers, vendors, suppliers, patrons, and invitees over the roadway provided by the Authority serving the Facilities. The Authority's roadway shall be used jointly with other tenants on the Airport, and the Lessee shall not interfere with the rights and privileges of other persons or firms using said roadway and shall be subject to such weight and use restrictions promulgated in the Authority's rules and regulations. Section 703. QUIET ENJOYMENT OF LEASED PREMISES. By keeping and performing the covenants and agreement herein contained to be performed by it, the Lessee shall at all times throughout the term of this Agreement, have the right, subject to the provisions of this Agreement, to peaceably and quietly possess and enjoy the Leased Premises without suit, trouble or hindrance. The Authority shall defend the Lessee's right to such peaceable and quiet possession at the Authority's expense. Section 704. MAINTENANCE AND OPERATIONS. The Authority shall be responsible for snow removal from the runways, taxiways and public use areas of the Airport, but not from the Leased Premises. 30 ARTICLE VIII THE AUTHORITY'S RESERVATIONS Section 801. IMPROVEMENT, RELOCATION OR REMOVAL OF SPECIAL FACILITIES. Subject to Section 1104 hereof, the Authority, at its sole discretion, reserves the right to further develop or improve the Aircraft Operating Area (as defined in Federal Aviation Administration regulations) and other portions of the Airport, including the right to remove or relocate any structure on the Airport, as it sees fit, and to take any action it considers necessary to protect the aerial approaches of the Airport against obstructions, together with the right to prevent the Lessee from erecting or permitting to be erected, any buildings or other structure on the Airport which, in the reasonable opinion of the Authority, would limit the usefulness of the Airport, constitute a hazard to aircraft or violate Federal Aviation Administration standards or regulations. Section 802. INSPECTION OF LEASED PREMISES. The Authority, through its duly authorized agent, shall have at any reasonable time the right to enter the Leased Premises for the purpose of periodic inspection for fire protection, maintenance and to investigate compliance with the terms of this Agreement; provided, however, that except in the case of emergency, such right shall be exercised upon twenty-four (24) hours prior notice to the Lessee and with an opportunity for the Lessee to have an employee or agent present. The Authority will comply with the Lessee's security procedures and will conduct such inspections in a manner that does not unduly interfere with or disrupt the Lessee's normal business operations. Section 803. SUBORDINATION TO U.S. GOVERNMENT. This Agreement shall be subordinate to the provisions of any existing or future agreement(s) between the Authority and the United States Government, relative to the operation and maintenance of the Airport, the terms and execution of which have been or may be required as a condition precedent to the expenditure or reimbursement to the Authority for Federal funds for the development of the Airport. Section 804. WAR OR NATIONAL EMERGENCY. During the time of war or national emergency, the Authority shall have the right to lease the Airport or any part thereof to the United States Government for military use, and if any such lease is executed, the provisions of this Agreement insofar as they are inconsistent with the lease to the United States Government shall be suspended, and in that event, a just and proportionate part of the ground rent due under Section 501 hereof shall be abated. Section 805. NO LIABILITY OF THE AUTHORITY. The Bonds shall be special and limited obligations of the Authority, payable solely and only out of the Trust Estate. No holder of any Bond shall have the right to compel any exercise of the taxing power of the State or any political subdivision thereof, including the Authority, to pay principal of, premium, if any, or interest on the Bonds, and the Bonds shall not constitute an indebtedness of the State or any political 31 subdivision thereof, including the Authority, or a loan of credit thereof within the meaning of any constitutional or statutory provision or limitation or indebtedness. Section 806. NO WARRANTY OF CONDITION OR SUITABILITY. The Authority makes no warranty, either express or implied, as to the condition of the Leased Premises or that it shall be suitable for the Lessee's purposes or needs. The Authority shall not be responsible for any latent defect or change of condition in the Leased Premises and the Lessee shall not, under any circumstances, withhold any rentals or other amounts payable to the Authority hereunder on account of any defect in the Leased Premises, nor for any change in the condition thereof nor for any damage accruing thereto. By its entry onto the Leased Premises, the Lessee accepts the Leased Premises as being free and clear from all defects and in good, safe, clean and orderly condition and repair, and agrees to maintain the same. Section 807. RESPONSIBILITY FOR CONTRACTS FOR SPECIAL FACILITIES AND PAYMENT OF SPECIAL FACILITIES RENTALS. The Authority shall not be responsible to the Lessee for the performance of the contractor or contractors for the construction, modification, expansion and installation of the Special Facilities. The Authority shall not be required to pay or provide any monies for the construction, modification, expansion or installation of the Special Facilities, except to the extent of the moneys in the Construction Fund. Failure of the contractor or contractors to complete the construction, modification, expansion and installation of the Special Facilities shall in no way affect the payment obligations of the Lessee under Section 502 of this Agreement. Section 808. OPTION OF THE AUTHORITY TO TERMINATE LEASE. The Authority may elect, within its sole discretion, at any time to cancel this Agreement, upon at least twenty-four (24) months prior written notice to the Lessee, in order to use the Leased Premises for essential airport purposes of general applicability for all airport users (which shall not include, by way of example only, use of the Leased Premises for any purpose for which the Lessee is using the Leased Premises or the construction of facilities on the Land for another potential or actual user for the same purposes as the Leased Premises is being used by the Lessee) and, upon the payment by the Authority of the amounts specified in this Section 808, this Agreement shall forthwith cease and terminate, and the parties hereto shall be released and discharged of and from all further obligations hereunder other than as described in this Section 808, without prejudice, however, to any claims which may have occurred prior thereto in favor of either party against the other. The Authority, upon the exercise of the option provided for in this Section 808, shall use its best efforts to provide an alternate site to the Lessee at the Airport for the Lessee to build and operate a facility substantially similar to the Leased Premises upon the terms and conditions to be agreed upon by the Authority and the Lessee. Any determination by the Authority that the use of the Leased Premises is for essential airport purposes as defined in this Section 808 shall be conclusive. Notwithstanding anything in this Section 808 to the contrary, the Authority shall have the right following cancellation of this Agreement pursuant to this Section 808 to temporarily release 32 the Leased Premises to any person for any purpose for a period not to exceed twenty-four (24) months following cancellation of this Agreement if, in its sole discretion, the demolition of the Leased Premises is not then required for essential airport purposes. A right of first refusal to lease the Leased Premises will be given to the Lessee to lease the Leased Premises during this period on the terms and conditions provided for in leases to other tenants of the Authority at the Airport for similar space; provided such terms are at least as favorable to the Lessee as terms set forth herein. In the event that the Authority elects to exercise its option to terminate this Lease pursuant to this Section 808, the Authority shall prior to delivery of any written notice that it intends to terminate this Agreement irrevocably pay to the Trustee the amount necessary in accordance with Section 1301 of the Indenture to pay or provide for the payment of the principal of and interest on the Bonds then Outstanding to effect a redemption of such Bonds in accordance with Subsection 304(g) of the Indenture on the soonest practicable date as well as any costs associated with such redemption. The Authority shall also pay to the Lessee the reasonable costs it incurs in relocating its operations from the Leased Premises. If the Authority, after having given the notice of termination to the Lessee, shall thereafter withdraw such notice and elect to continue this Agreement, then the Authority shall pay to the Lessee the reasonable costs incurred by the Lessee in downsizing its operation in anticipation of the termination of this Agreement. Notwithstanding the delivery of such notice to the Lessee and the provision for payment of the Bonds, the Lessee shall continue to pay a rental to the Authority equal in amount to the Special Facilities Rentals that would be due had provision for the payment of the Bonds not been made until the date this Agreement is terminated pursuant to this Section. Section 809. CONSIDERATION OF AMENDMENT. In the event that the Federal Aviation Administration, or its successors, requires modifications or changes in this Agreement as a condition precedent to the granting of funds for the improvement of the Airport, Lessee agrees to consider in good faith such amendments, modifications, revisions, supplements or deletions of any of the terms, conditions or requirements of this Agreement as may be reasonably required to obtain such funds; provided, however, that in no event will Lessee be required, pursuant to this Section, to agree to an increase in the rent provided for hereunder or to a change in the use (provided it is an authorized use hereunder) to which Lessee has put the Facilities. 33 ARTICLE IX INDEMNITY AND INSURANCE Section 901. INDEMNIFICATION. Except as governed by Subsection 605(b) hereof, the Lessee covenants and agrees fully to indemnify, defend, save, and hold harmless the Authority, the Trustee, all of their directors, members, officers, successors, assigns, employees, and agents (collectively, the "Indemnified Parties") from and against any and all claims, demands, suits, proceedings, expenses, penalties, fines, damages, losses, and Liabilities (collectively, "Claims") of any character and nature whatsoever (and all reasonable expenses incidental to the investigation and defense thereof, including reasonable attorneys' fees) based on or arising out of the use, occupancy, activities, or operations by the Lessee at or on the Leased Premises, including, without limitation, any Claims based on or arising out of death or injury to a person or persons, damages to property or the Lessee's actions under the Construction Management Agreement; provided that the Lessee shall not be liable for any injuries, death, damage, or loss to the extent that any such injury, death, damage, or loss is caused or contributed to by the fault or negligence of the Indemnified Parties, their agents or employees; and further provided that the Indemnified Parties shall give the Lessee prompt and reasonable notice of any Claims. The Lessee also covenants and agrees at its expense to pay, and to indemnify and save the Indemnified Parties harmless, from and against, all costs, reasonable counsel fees, expenses and liabilities incurred by them or by the Lessee in any action or proceeding brought by reason of any such Claim. If any action or proceeding is brought against any of the Indemnified Parties by reason of any Claim, the Lessee, upon notice from any of the Indemnified Parties, agrees to defend the Claim unless caused or contributed to by the fault or negligence of the Indemnified Parties. The Lessee also covenants and agrees, at its expense, to pay, and to indemnify the Indemnified Parties from and against, all costs, expenses and charges, including reasonable attorneys' fees, incurred in obtaining possession of the Leased Premises or the Special Facilities upon the occurrence of an Event of Default. Each Indemnified Party shall have the right to retain separate counsel in any such action and to participate in the defense thereof but shall bear the fees and expenses of such counsel unless (i) the Lessee shall have specifically authorized the retaining of such counsel or (ii) the parties to such suit include such Indemnified Party, and the Lessee and such Indemnified Party have been advised by such counsel that one or more legal defenses may be available to it which may not be available to the Lessee, in which case the Lessee shall not be entitled to assume the defense of such suit notwithstanding its obligation to bear the fees and expenses of such counsel, unless caused or contributed to by the fault or negligence of the Indemnified Parties. Section 902. PUBLIC LIABILITY INSURANCE. The Lessee shall, at its expense, procure, maintain and keep in force, at all times during the term of this Agreement from financially sound and reputable companies reasonably acceptable to the Authority, commercial general liability insurance, insuring the Lessee, the Trustee and the Authority against liability for bodily injury and property damage with respect to the risks set forth in Exhibit C attached hereto. Without 34 limiting its liability, the Lessee agrees to carry and keep in force insurance with single limit liability for bodily injury or death and property damage in a sum not less than $120,000,000 with said policy designating the Authority and the Trustee as additional insureds to the extent the Lessee is required to indemnify the Authority pursuant to Section 901 hereof. The Lessee shall furnish the Authority and the Trustee with a certificate of insurance as evidence of such coverage. Said insurance shall not be cancelled or materially modified except upon ten (10) days' advance written notice to the Authority and the Trustee. Section 903. FIRE AND EXTENDED COVERAGE INSURANCE. The Lessee shall, at its expense, procure and keep in force at all times during the term of this Agreement with financially sound and reputable companies reasonably acceptable to the Authority, replacement cost insurance on the Leased Premises against loss and damage by fire, aircraft and extended coverage perils. Such policy shall be in an amount of not less than eighty percent (80%) of the replacement cost of the Leased Premises. Said policy shall designate the Authority and the Trustee as additional insureds. The Lessee shall furnish the Authority and the Trustee with a certificate of insurance as evidence of such coverage. Said policy shall not be cancelled or materially modified except upon ten (10) days' advance written notice to the Authority and the Trustee. Section 904. APPLICATION OF INSURANCE PROCEEDS. (a) The proceeds of insurance maintained pursuant to the provisions of Section 902 shall be paid to the Lessee, except to the extent necessary for the Lessee to comply with its covenants set forth in Section 901 hereof. (b) The proceeds of the insurance required to be maintained in accordance with the provisions of Section 903 hereof shall be paid and disbursed in accordance with the provisions of Article XI hereof. Section 905. PERFORMANCE BONDS. At any time that the Lessee undertakes any construction pursuant to Article III hereof, the Lessee shall, at its own cost and expense, cause to be made, executed, and delivered to the Authority separate performance bonds, as follows: (a) Prior to the date of commencement of such construction, a contract surety bond in a sum equal to the full amount of the construction contract awarded. Said bond shall be drawn in a form and from a financially sound and reputable company reasonably acceptable to the Authority; shall guarantee the faithful performance of necessary construction and completion of improvements in accordance with the Plans and Specifications therefor; and shall guarantee the Authority against any losses and liability, damages, expenses, claims and judgments caused by or resulting from any failure of the Lessee to perform completely, the work described therein. (b) Prior to the date of commencement of such construction, a payment bond with the Lessee's contractor or contractors as principal, in a sum equal to the full amount of the 35 construction contract awarded. Said bond shall guarantee payment of all wages for labor and services engaged and of all bills for materials, supplies and equipment used in the performance of said construction contract. Section 906. RIGHT OF THE AUTHORITY OR TRUSTEE TO PAY INSURANCE PREMIUMS. In the event that the Lessee shall fail to maintain full insurance coverage required by this Agreement, the Authority or the Trustee may (but shall be under no obligation to) take out the required policies of insurance, pay the required premiums or otherwise comply with the covenants set forth in Sections 902 and 903 hereof. All amounts advanced by the Authority or the Trustee in payment of the required premiums for such insurance or otherwise to comply with the covenants set forth in such Sections shall be paid by the Lessee to the one making the advances, together with interest thereon at the Trustee's prime rate of interest. Any amounts advanced by the Authority shall be considered for all purposes to be a rental due pursuant to Section 501. 36 ARTICLE X PREPAYMENT OF SPECIAL FACILITIES RENTALS Section 1001. IN CONNECTION WITH OPTIONAL REDEMPTION OF SERIES 1994 BONDS. The Lessee shall have the option to prepay the Special Facilities Rentals due pursuant to Section 502 hereof with respect to the Series 1994 Bonds for the purpose of providing for the redemption of the Series 1994 Bonds then Outstanding in accordance with Subsection 304(b) of the Indenture. In order to exercise such right, the Lessee shall: (i) give conditional written notice of the exercise of such right to the Authority and the Trustee not more than one hundred twenty (120) days nor less than forty-five (45) days prior to the date the Lessee has selected for the redemption of the Series 1994 Bonds; and (ii) irrevocably deposit with the Trustee in the Series 1994 Account of the Bond Fund on or prior to such redemption date sufficient moneys, which, together with investment earnings thereon to such redemption date and other moneys in such Account in the Bond Fund available therefor, shall be sufficient to provide for the payment of the principal, redemption premium, if any, and interest on the Series 1994 Bonds to be redeemed on such redemption date. Section 1002. IN CONNECTION WITH DEFEASANCE OF THE SERIES 1994 BONDS. The Lessee shall have the option to prepay the Special Facilities Rentals due pursuant to Section 502 hereof with respect to the Series 1994 Bonds for the purpose of providing for the defeasance of the Series 1994 Bonds in accordance with Section 1301 of the Indenture. In order to exercise such right, the Lessee shall: (i) give written notice of the exercise of such right to the Authority and the Trustee; and (ii) irrevocably deposit with the Trustee in the Series 1994 Account of the Bond Fund on or prior to the date of such defeasance sufficient moneys, which, together with investment earnings thereon and other moneys in such Account in the Bond Fund available therefor, shall be sufficient to provide for the payment of principal of, redemption premium, if any, and interest on the Series 1994 Bonds to the date the Lessee has selected for the redemption thereof or the date of maturity, as the case may be, in accordance with Section 1301 of the Indenture. Section 1003. IN CONNECTION WITH THE TERMINATION OF THIS AGREEMENT IN THE EVENT OF DAMAGE OR DESTRUCTION OR CONDEMNATION. The Lessee shall have and is hereby granted the option, in accordance with paragraph (ii) of Subsection 1101(a) and paragraph (iii) of Subsection 1102(a) hereof, to prepay the Special Facilities Rentals due pursuant to Section 502 and to terminate this Agreement in the event of a destruction or damage to or condemnation of the Special Facilities for the purpose of redeeming the Bonds. In order to exercise such right, the Lessee shall: (i) give written notice of the exercise of such right to the Authority and the Trustee not more than one hundred twenty (120) days nor less than forty-five (45) days prior to the date the Lessee has selected for the redemption of the Bonds; and (ii) irrevocably deposit with the Trustee in the Bond Fund on or prior to such redemption date sufficient moneys which, together with interest thereon to such redemption date and other moneys in the Bond Fund available 37 therefor, shall be sufficient to provide for the payment of the principal of and interest on all the Bonds then Outstanding in accordance with the provisions of Subsection 304(d) of the Indenture. Section 1004. IN CONNECTION WITH A PARTIAL REDEMPTION. The Lessee shall have the option, in accordance with paragraph (iii) of Subsection 1102(a) hereof to prepay the Special Facilities Rentals due pursuant to Section 502 hereof for the purpose of providing for the redemption of the Bonds in accordance with Subsection 304(d) of the Indenture. In order to exercise such right, the Lessee shall: (i) give written notice of the exercise of such right to the Authority and the Trustee not more than one hundred twenty (120) days nor less than forty-five (45) days prior to the date the Lessee has scheduled for the redemption of the Bonds; and (ii) irrevocably deposit with the Trustee in the Bond Fund on or prior to such redemption date sufficient moneys, which, together with investment earnings thereon to such redemption date and other moneys in the Bond Fund available therefor, shall be sufficient to provide for the payment of the principal of and interest on the Bonds to such redemption date. Section 1005. IN CONNECTION WITH A SERIES 1994 DETERMINATION OF TAXABILITY. The Lessee shall be obligated to prepay the Special Facilities Rentals due pursuant to Section 502 hereof with respect to the Series 1994 Bonds in the event of a Series 1994 Determination of Taxability. Such redemption shall occur at a date to be selected by the Lessee not more than one hundred twenty (120) days after the occurrence of the Series 1994 Determination of Taxability. The Lessee shall irrevocably deposit with the Trustee in the Series 1994 Account of the Bond Fund on or prior to such redemption date sufficient moneys, which, together with investment earnings thereon to such redemption date and other moneys in the Series 1994 Account of the Bond Fund available therefor, shall be sufficient to provide for the payment of the principal of and interest on the Series 1994 Bonds to such redemption date. 38 ARTICLE XI DAMAGE AND CONDEMNATION Section 1101. DAMAGE AND DESTRUCTION. (a) If prior to full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture) the Special Facilities are destroyed (in whole or in part) or are damaged by fire or other casualty, the Lessee shall promptly give written notice thereof to the Authority and the Trustee. All Net Proceeds in an amount less than one million dollars ($1,000,000) per casualty shall be paid to the Lessee to be applied to repair, rebuild or restore the property damaged. Any remaining balance after payment for such repair, rebuilding or restoration shall be retained by the Lessee. Net Proceeds of insurance in excess of one million dollars ($1,000,000) per casualty resulting from such claims for losses shall be paid to and held by the Trustee in the Net Proceeds Account of the Construction Fund created under the Indenture, whereupon the Lessee shall elect to proceed in accordance with paragraphs (i) or (ii) hereof: (i) The Lessee will proceed promptly to repair, rebuild or restore the property damaged or destroyed to substantially the same condition as it existed prior to the event causing such damage or destruction, with such changes, alterations and modifications (including the substitution and addition of other property) as may be desired by the Lessee and as will not impair productive capacity or the character of the Special Facilities, and the Trustee will apply so much as may be necessary of the Net Proceeds to payment of the costs of such repair, rebuilding or restoration, either on completion thereof or as the work progresses as directed by the Lessee. In the event said Net Proceeds are not sufficient to pay in full the costs of such repair, rebuilding or restoration, the Lessee will, nonetheless, complete the work thereof and will pay that portion of the costs thereof in excess of the amount of said Net Proceeds, or will advance to the Authority the moneys necessary to complete said work, in which case the Authority will proceed so to complete said work. Any balance of such Net Proceeds remaining after payment of all the costs of such repair, rebuilding or restoration shall be paid to the Lessee. (ii) The Lessee shall: (A) cause the Special Facilities to be returned to the Authority either in the condition the Special Facilities then exist or in the same condition in which the Special Facilities existed prior to the execution of this Agreement, whichever shall be acceptable to the Authority; (B) transfer all amounts in the Net Proceeds Account in the Construction Fund not used pursuant to clause (A) to the Bond Fund and prepay all of the Special Facilities Rentals due pursuant to Section 502 hereof pursuant to the provisions of Section 1003 hereof and the corresponding provisions of the Indenture and cause the Authority and the Trustee to provide for the redemption of all 39 Bonds then Outstanding under the Indenture in whole in accordance with the provisions thereof; (C) if any Bonds have previously been redeemed or provision for their payment has been made pursuant to Subsection 304(b) of the Indenture, reimburse itself for such prepayment in an amount equal to the amount that would have been necessary (on the date of receipt of such Net Proceeds), to redeem or provide for the payment of such Bonds to the next practicable redemption date, but not less than the actual amount paid by the Lessee; and (D) apportion the remaining Net Proceeds between the Authority and the Lessee, with the Authority receiving the same proportion of the remaining Net Proceeds as the then expired portion of the term of this Agreement bears to the full term plus ten (10) years and the Lessee shall be entitled to the remainder of the Net Proceeds; provided, that if the Lessee proceeds under this paragraph (ii) hereof, it shall provide for the completion of the requirements of clauses (A) and (B) hereof, whether or not the Net Proceeds are sufficient for such purposes. The Lessee may elect to proceed pursuant to this option (ii) only if the Special Facilities have been damaged or destroyed by fire or other casualty (x) to such extent that, in the opinion of the Lessee expressed within a period of six consecutive months following such damage or destruction, it is not practicable or desirable to rebuild, repair or restore the Special Facilities, or (y) to such extent that, in the opinion of the Lessee, the Lessee is or will be thereby prevented from carrying on its normal operations at the Special Facilities for a period of six consecutive months. Any moneys held by the Trustee in the Net Proceeds Account shall, at the written direction of the Lessee, be invested or reinvested by the Trustee in Investment Obligations permitted in accordance with the Indenture. The Lessee shall forthwith pay to the Trustee the amount of any net losses with respect to principal on such investments. (b) If the Bonds have been fully paid (or provision for the payment thereof has been made in accordance with the Indenture) and the Special Facilities are destroyed (in whole or in part) or are damaged by fire or other casualty, all Net Proceeds will be paid to NBD Bank, N.A., Indianapolis, Indiana or a mutually acceptable third party, with any disbursements to be approved by the Lessee and the Authority, and the Lessee shall elect to proceed in accordance with paragraphs (i) or (ii) hereof: (i) The Lessee will proceed promptly to repair, rebuild or restore the property damaged or destroyed to substantially the same condition as it existed prior to the event causing such damage or destruction, with such changes, alterations and modifications (including the substitution and addition of other property) as may be desired by the Lessee and as will not impair productive capacity or the character of the Special Facilities, and the Lessee will apply so much as may be necessary of the Net Proceeds to payment of the costs of such repair, rebuilding or restoration, either on completion thereof or as the work progresses as directed by the Lessee. In the event the Net Proceeds are not sufficient to pay in full the costs of such repair, rebuilding or restoration, the 40 Lessee will, nonetheless, complete the work thereof and will pay that portion of the costs thereof in excess of the amount of the Net Proceeds, or will advance to the Authority the moneys necessary to complete said work, in which case the Authority will proceed so to complete said work. Any balance of the Net Proceeds remaining after payment of all the costs of such repair, rebuilding or restoration shall be paid to the Lessee. (ii) The Lessee will (A) cause the Special Facilities to be returned to the Authority either in the condition the Special Facilities then exist or in the same condition in which the Special Facilities existed prior to the execution of this Agreement, whichever shall be acceptable to the Authority, (B) if any Bonds have previously been redeemed or provision for their payment has been made pursuant to Subsection 304(b) of the Indenture, reimburse itself for such prepayment in an amount equal to the amount that would have been necessary (on the date of receipt of such Net Proceeds) to redeem or provide for the payment of such Bonds to the next practicable redemption date, but not less than the actual amount paid by the Lessee and (C) apportion the remaining Net Proceeds between the Authority and the Lessee, with the Authority receiving the same proportion of such remaining Net Proceeds as the then expired portion of the term of this Agreement bears to the full term, plus ten (10) years, and the Lessee shall be entitled to the remainder of the Net Proceeds. (c) The Lessee shall not, by reason of the payment of the costs (whether by direct payment thereof or advances to the Authority or Trustee therefor) of replacing or repairing of any property damaged or destroyed in excess of the Net Proceeds be entitled to any reimbursement from the Authority, the Trustee, or the holders or owners of the Bonds, or any abatement or diminution of the rents payable under Article V hereof. (d) Within this Section 1101, "Net Proceeds" means the gross proceeds from the insurance with respect to which that term is used remaining after payment of all expenses (including attorneys expenses and any extraordinary fees and expenses of the Trustee), incurred in the collection of such gross proceeds. Section 1102. CONDEMNATION. (a) In the event that title to, or the temporary use of, the Special Facilities or the leasehold estate of the Lessee in the Special Facilities created by this Agreement or any part of either thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, in each case other than the Authority, while any Bonds are Outstanding, the Lessee shall be obligated to continue to pay the Special Facilities Rental and other amounts due to the Trustee. Any Net Proceeds derived for the temporary use or condemnation of the Special Facilities shall be paid to the Lessee. The Authority, the Lessee and the Trustee will cause any other Net Proceeds received by them or any of them from any award made in such eminent domain 41 proceedings with respect to the Special Facilities, to be paid to and held by the Trustee in the Net Proceeds Account, to be applied in one or more of the following ways as shall be directed in writing by the Lessee: (i) The restoration of the Special Facilities to substantially the same condition as existed prior to the exercise of the said power of eminent domain. (ii) The acquisition, by construction or otherwise, by the Lessee of other improvements suitable for the Lessee's operations (which improvements shall be deemed a part of the Special Facilities and available for use and occupancy by the Lessee without the payment of any rent other than the Special Facilities Rental to the same extent as if such other improvements were specifically described herein and demised hereby). (iii) Redemption of any of the Bonds together with accrued interest thereon to the date of redemption; provided, that no part of any such condemnation award may be applied for such redemption, unless all of the Bonds are to be redeemed or, in the event that less than all of the Bonds are to be redeemed, the Lessee shall certify to the Authority and the Trustee that (A) the property forming a part of the Special Facilities that was taken by such condemnation proceedings is not essential to the Lessee's use or occupancy of the Special Facilities, or (B) the Special Facilities have been restored to a condition substantially equivalent to its condition prior to the taking by such condemnation proceedings, or (C) improvements have been acquired which are suitable for the Lessee's operations at the Special Facilities as contemplated by the foregoing paragraph (ii) of this Subsection 1102(a). The Lessee may elect to proceed pursuant to this paragraph (iii) only if the Special Facilities have been condemned (x) to such extent that, in the opinion of the Lessee expressed within a period of six consecutive months following such condemnation it is not practicable or desirable to rebuild, repair or restore the Special Facilities, or (y) to such extent that, in the opinion of the Lessee, the Lessee is or will be thereby prevented from carrying on its normal operations at the Special Facilities for a period of six consecutive months. (b) The Lessee shall direct the Authority and the Trustee in writing as to which of the ways specified in this Section the Lessee elects to have the condemnation award applied. Any balance of the Net Proceeds of the award in such eminent domain proceedings in an amount necessary to redeem the then Outstanding Bonds shall be paid into the Bond Fund. If the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the provisions of the Indenture), all Net Proceeds will be apportioned between the Authority and the Lessee, with the Authority receiving the same portion of such proceeds as the then expired portion of the Agreement term bears to the term of the Agreement, plus ten (10) years, and the Lessee receiving the balance, provided, however, that if any Bonds have been previously redeemed or provision for their payment has been made pursuant to Subsection 304(d) of the Indenture, prior to any such apportionment the Lessee shall receive Net Proceeds in an amount 42 (determined on the date of the receipt of such Net Proceeds) that would have been necessary to redeem such Bonds to the next practicable redemption date, but not less than the actual amount paid by the Lessee. (c) Any moneys held by the Trustee under the provisions of the preceding paragraph shall, at the written request of the Lessee, be invested or reinvested by the Trustee in Investment Obligations in accordance with the provisions of the Indenture. The Lessee shall forthwith pay to the Trustee the amount of any net losses with respect to principal on such investments. (d) Within this Section 1102, "Net Proceeds" means the gross proceeds derived from the condemnation award with respect to which that term is used after payment of all expenses (including attorney's expenses and any extraordinary expenses of the Trustee) incurred in connection with the collection of such gross proceeds. (e) The Authority shall cooperate fully with the Lessee in the handling and conduct of any prospective or pending condemnation proceedings with respect to the Special Facilities or any part thereof and will, to the extent it may lawfully do so, permit the Lessee to litigate in any such proceedings in the name and behalf of the Authority. In no event will the Authority voluntarily settle, or consent to the settlement of, any prospective or pending condemnation proceeding with respect to the Special Facilities or any part thereof without the written consent of the Lessee. Section 1103. DESTRUCTION OR CONDEMNATION OF EXCLUDED PERSONAL PROPERTY OR LESSEE IMPROVEMENTS. The Lessee shall also be entitled to the net proceeds of any insurance or condemnation award or portion thereof made for damages to or takings of the Excluded Personal Property or any portion thereof, the Lessee Improvements or any portion thereof, as well as any portion of the Leased Premises that at one time was Lessee Improvements. Section 1104. TAKING OR CONDEMNATION BY THE AUTHORITY. In the event the Authority requires the Facilities for expansion, improvement, development of the Airport or in the event the Authority exercises its right of condemnation or eminent domain with respect to all or substantially all of the Facilities for the purposes set forth in Section 801 hereof, the Authority reserves the right, on six (6) months notice, to relocate or replace the Facilities in substantially similar form at another comparable location on the Airport. The Authority shall identify the comparable location by appending to this Agreement revised Exhibits A and B and adjust the ground rental with respect thereto as provided in Subsection 501(c) hereof. The new location shall constitute thereafter the Land and the facilities or improvements located thereon shall constitute the Facilities for purposes of this Agreement. The relocation of the Facilities shall be at no cost to the Lessee and the new Facilities must be ready for occupancy by the Lessee prior to the date of required relocation. 43 If the Authority complies with the provisions of this Section, such remedies shall be in lieu of any remedies the Lessee may have pursuant to law or equity with respect to the actions taken by the Authority in condemning or relocating the Facilities. Section 1105. DESTRUCTION OR CONDEMNATION OF LEASED PREMISES OTHER THAN SPECIAL FACILITIES OR FORMER LESSEE IMPROVEMENTS. The Lessee shall direct the Authority to apply the net proceeds of any insurance or condemnation award (other than condemnation by the Authority) or any portion thereof made for damages or takings of Leased Premises (other than Special Facilities or former Lessee Improvements) to restore such Leased Premises to substantially the same condition as existed prior to such damage or condemnation or acquire, by construction or otherwise, other improvements of similar character suitable for the Lessee's operations. To the extent that such net proceeds are insufficient to effect the foregoing, the Lessee shall: (i) pay all costs in excess of the net proceeds required for such redemption; (ii) develop Plans and Specifications which can accomplish such restoration with the net proceeds available therefor; or (iii) terminate this Agreement with respect to those Leased Premises condemned or destroyed, in which case, such net proceeds shall be retained by the Authority. Any excess net proceeds shall be retained by the Authority. 44 ARTICLE XII ADDITIONAL BONDS Section 1201. ADDITIONAL BONDS. If the Lessee is not in default hereunder, the Authority will, on request of the Lessee, from time to time, use its best efforts to issue pursuant to the Indenture the amount of Additional Bonds specified by the Lessee to provide funds to pay or to reimburse the Lessee for costs incurred by the Lessee for any one or more of the following: (a) the costs of completing the Special Facilities, (b) the costs of the issuance and sale of the Additional Bonds and other costs reasonably related to the financing as shall be agreed upon by the Lessee and the Authority and (c) the refunding of Outstanding Bonds; provided that: (i) the terms of such Additional Bonds, the purchase price to be paid therefor, and the manner in which the proceeds therefrom are to be disbursed, shall have been approved in writing by the Lessee; (ii) the Lessee and the Authority shall have entered into a Supplemental Agreement to provide for additional rent in an amount at least sufficient to pay principal of, interest, and premium, if any, on the Additional Bonds when due; (iii) the Authority shall have otherwise complied with the provisions of the Indenture with respect to the issuance of such Additional Bonds; and (iv) the Lessee shall provide to the Trustee an opinion of Bond Counsel to the effect that the issuance of such Additional Bonds shall not adversely affect the exemption from gross income for federal income tax purposes of interest on the Outstanding Tax Exempt Bonds. 45 ARTICLE XIII TERMINATION OF AGREEMENT BY THE LESSEE Section 1301. TERMINATION BY THE LESSEE. So long as no Bonds remain Outstanding under the Indenture, the Lessee may terminate this Agreement and terminate its obligations hereunder at any time that the Lessee is not in default in the payment of ground rentals and other amounts payable to the Authority hereunder by giving the Authority sixty (60) days advance written notice to be served as hereinafter provided, and by surrender of the Leased Premises, upon or after the happening of any one of the following events: (a) The issuance by any court of competent jurisdiction of an injunction in any way preventing or restraining the use of the Airport, so as to substantially affect the Lessee's use of the system at the Airport, and the remaining in force of such injunction for a period of at least ninety (90) days; provided, however, that such injunction is not due solely to the Lessee's violation of this Agreement. (b) Failure by the Authority to observe and perform any covenant, condition or agreement on its part to be observed or performed, for a period of sixty (60) days after written notice to the Authority, specifying such failure and requesting that it be remedied, given to the Authority by the Lessee, unless the Lessee shall agree in writing to an extension of such time prior to its expiration. If a failure under this Subsection is such that it cannot be corrected within the applicable period, the Lessee shall not terminate this Agreement if corrective action is instituted by the Authority within the applicable period and diligently pursued until the failure is corrected. (c) The assumption by the United States Government or any authorized agency thereof of the operation, control, or use of the Airport or the Facilities, or any substantial part or parts thereof, in a manner which substantially restricts the Lessee for a period of at least ninety (90) days from full use of the Facilities. The provisions of this Section 1301 shall be subject to the provisions of Section 1806 hereof. 46 ARTICLE XIV EVENTS OF DEFAULT Section 1401. EVENTS OF DEFAULT. The following shall constitute Events of Default: (a) the failure to pay any installment of rent then due (with interest) under Section 501 hereof within thirty (30) days after receipt by the Lessee of written notice to pay such rent; (b) the failure of the Lessee to pay any installment of Special Facilities Rentals pursuant to Section 502 hereof when due; (c) the filing by the Lessee of a voluntary petition in bankruptcy or the making of an assignment of all or any part of the Lessee's assets for the benefit of creditors; (d) the adjudication of the Lessee as a bankrupt pursuant to any involuntary bankruptcy proceedings; (e) the taking of jurisdiction by a court of competent jurisdiction of the Lessee or its assets pursuant to proceedings brought under the provisions of any Federal reorganization act; (f) the: (i) appointment of a receiver or a trustee of the Lessee's assets by a court of competent jurisdiction or (ii) the filing of an involuntary petition in bankruptcy and, in each case, the failure of the Lessee within ninety (90) days to dismiss the same or reach a voluntary agreement with Lessee's creditors; (g) (i) failure by the Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed pursuant to Sections 201 or 611 hereof, or (ii) any violation of a Federal Aviation Administration or United States Department of Transportation regulation that (A) deprives the Authority of the use of or the power to operate all or a portion of the Airport or (B) prevents the Authority from obtaining an airport development grant in aid from the United States Government, where such occurrence set forth in (i) or (ii) shall continue for a period of sixty (60) days after written notice to the Lessee specifying such failure and requesting that it be remedied, given to the Lessee by the Authority, unless the Authority shall agree in writing to an extension of such time prior to its expiration. If a failure under this Subsection is such that it cannot be corrected within the applicable period, it shall not constitute an Event of Default if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the failure is corrected; or (h) (i) failure by the Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in Subsections (a) through (g) above, for a period of sixty (60) days after written notice to the Lessee, specifying 47 such failure and requesting that it be remedied, given to the Lessee by the Authority, unless the Authority shall agree in writing to an extension of such time prior to its expiration. If a failure under this Subsection is such that it cannot be corrected within the applicable period, it shall not constitute an Event of Default if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the failure is corrected, or (ii) election of the Authority to declare an Event of Default as provided in Subsection 605(e) hereof. The provisions of Subsections (g) and (h) shall be subject to the provisions of Section 1806 hereof. Section 1402. REMEDIES OF THE TRUSTEE FOR CERTAIN EVENTS OF DEFAULT. Upon the occurrence of any Event of Default described in Subsections 1401(b)-(f), the Trustee may in its discretion and shall upon the direction of the Owners of at least twenty-five percent (25%) of the principal amount of Bonds Outstanding, join in or separately initiate whatever action at law or in equity as may appear necessary or desirable to collect the Special Facilities Rentals due and owing and any other amounts then due to the Trustee under this Agreement. No waiver by the Authority of an Event of Default described in Subsections 1401 (b)-(f) shall adversely affect the Trustee's rights under this Section 1402. Section 1403. REMEDIES OF THE AUTHORITY ON DEFAULT. (a) If any Event of Default shall have occurred, the Authority may, in its own name and for its own account, without impairing the ability of the Authority to pursue any other remedy provided for in this Agreement or now or hereafter existing at law or in equity or by statute, institute such action against the Lessee as may appear necessary or desirable to collect such rentals and any other amounts then due under this Agreement, or to enforce performance and observance of such covenant, condition or obligation of the Lessee hereunder, or to recover damages for the Lessee's nonpayment, non-performance or non-observance of the same. (b) Upon the occurrence of any Event of Default described in Subsections 1401(a) or (c)-(g), the Authority may (i) by giving the Lessee written notice upon the occurrence of any Event of Default described in Subsections 1401(a) and (g) and without giving the Lessee notice upon the occurrence of an Event of Default described in Subsections 1401(c)-(f), declare this Agreement to be terminated, except for the Lessee's continuing obligation pursuant to Subsection 1404(a) hereof to make payments due hereunder, (ii) exclude the Lessee from possession of the Leased Premises and reenter the same; and (iii) take whatever action at law or in equity as may appear necessary or desirable to collect the rentals and any other amounts then due, to enforce performance and observance of any covenant, condition or obligation of the Lessee hereunder, or to recover damages for the Lessee's non-payment, nonperformance or non-observance of the same; provided that the Authority shall be required to mitigate its damages to the extent required by law and Subsection 1404(b) hereof. 48 (c) The Lessee shall pay all of the Authority's reasonable fees and expenses, including reasonable attorneys' fees, in enforcing any covenant to be observed by the Lessee or pursuing any remedy upon an Event of Default. Such amounts shall for all purposes of this Agreement be considered additional rent due under Section 501 hereof. Section 1404. THE LESSEE TO REMAIN LIABLE FOR PAYMENTS; RELETTING. (a) Notwithstanding the exercise by the Authority of its remedies pursuant to Section 1403 hereof or the exercise by the Trustee of its remedies pursuant to Section 1402 hereof or the Indenture, the Lessee shall continue to be liable for the payment of all rentals payable under Article V hereof and other amounts payable under this Agreement and the Lessee shall make such payments at the same times and in the same manner as provided in this Agreement, except as provided in Subsection 1404(b) hereof. (b) Whether or not any Bonds are Outstanding, the Authority shall use reasonable efforts to relet the Leased Premises for the maximum rental it may reasonably obtain, provided, however, that the Authority shall have no obligation to relet the Leased Premises to any person who will not use the Leased Premises for aviation related purposes requiring airfield access. Any such rentals received prior to the stated termination date of this Agreement shall be applied first to the payment of expenses incurred by the Authority in connection with such reletting, second, to the payment of the ground rent that would have been due to the Authority had this Agreement not been terminated, third to the Lessee in an amount equal to the sum of the principal amount of the Bonds Outstanding on the date of such termination and the principal amount and any premium paid on Bonds no longer Outstanding, and fourth to the Authority. All such rentals paid to the Authority after the stated termination date of this Agreement should be retained by the Authority. Section 1405. DISPOSITION OF EXCLUDED PERSONAL PROPERTY. If there shall remain any Excluded Personal Property upon the Authority's reentry of the Leased Premises, the Authority may, but without any obligation to do so, remove such property and hold it for the Lessee and the Lessee shall reimburse the Authority for any expense incurred by the Authority in connection with such removal and storage of such property. The Authority shall have the right to sell or rent such Excluded Personal Property; provided that it shall give to the Lessee not less than thirty (30) days' prior written notice that it intends to conduct such a sale or rental. The proceeds of such sale or letting shall be applied first, to the cost of such sale, second, to the payment of the charges for storage, third, to the payment of any other amounts which may then be due from the Lessee to the Authority under this Agreement, except Sections 502 hereof, fourth, so long as any Bonds are Outstanding, to the payment, redemption, purchase in the open market or defeasance of such Bonds, and the balance, if any, shall be paid to the Lessee. 49 Section 1406. NO REMEDY EXCLUSIVE. No remedy herein conferred upon the Authority is intended to be exclusive of any other available remedy or remedies, and each such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default granted under this Agreement shall impair any right or power or shall be construed to be a waiver thereof, and any such right or power may be exercised from time to time and as often as may be deemed expedient, and the exercise of any one right or remedy shall not impair the right of the Authority to any or all other remedies under this Agreement. Section 1407. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER; CONSENTS TO WAIVER. The waiver of either party of any breach by the other party of any covenant, condition or obligation under this Agreement shall not operate as a waiver of any subsequent breach of the same or a waiver of any breach of any other covenant, condition or obligation under this Agreement, nor shall any forbearance by the non-defaulting party not breaching to seek a remedy for any breach by the other party be a waiver by such non-defaulting party not breaching any of its rights and remedies with respect to such breach or any subsequent breach of the same or with respect to any other breach. Section 1408. SUSPENSION OF AGREEMENT. During the time of war or national emergency, the Authority shall have the right to lease the landing area or any part thereof to the United States Government for military use. If any such lease is executed, any provisions of this instrument which are inconsistent with the provisions of the lease to the Government shall be suspended; provided that the term of this Agreement shall be extended by the amount of the period of suspension; provided that such shall not affect the Lessee's obligations to pay Special Facilities Rentals pursuant to Section 502 and provided that the Authority obtains an opinion of Bond Counsel that such extension does not affect the exemption from gross income of interest on the Series 1994 Bonds for federal income tax purposes. Section 1409. DELAY NOT A WAIVER. No delay or omission by the Authority of the exercise of any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or any acquiescence therein, and every power or remedy given by this Agreement to the Authority may be exercised from time to time and as often as may be deemed expedient. The Authority may waive any Event of Default which in its opinion has been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of this Agreement or before the completion of the enforcement of any other remedies under this Agreement. No such waiver shall extend to or affect any other existing or subsequent Event of Default or impair any rights or remedies consequent thereon. 50 ARTICLE XV DEFAULT BY THE AUTHORITY Section 1501. DEFAULT BY THE AUTHORITY; REMEDIES OF THE LESSEE. The Authority shall in no event be in default in the performance of any of its obligations hereunder unless and until the Authority shall have failed to perform such obligation within thirty (30) days, or such additional time as is reasonably required in the opinion of the Lessee and the Trustee, to correct any such default, after notice by the Lessee to the Authority and, so long as any of the Bonds are outstanding, to the Trustee, properly specifying wherein the Authority has failed to perform any such obligation; but, so long as any of the Bonds are Outstanding, neither the occurrence nor existence of any default by the Authority shall relieve the Lessee of any of its obligations hereunder, including, without limitation, its obligation to pay Special Facilities Rentals under Section 502 hereunder or to provide insurance under Sections 902 and 903 hereof; provided, however, the Lessee may institute such action against the Authority as the Lessee may deem necessary to compel performance or recover its damages for non-performance. The Lessee shall have the right, to the extent permitted by law, to perform the obligations of the Authority hereunder if the Authority does not so perform and any costs associated therewith and not reimbursed by the Authority, shall be abated against the ground rental payable under this Agreement. The Lessee shall have the right in addition to instituting any such action, to terminate this Agreement upon sixty (60) days' notice to the Authority and the Trustee, and upon payment to the Trustee of that amount which, together with any monies available for that purpose under the provisions of the Indenture, will be sufficient to pay or redeem, or provide for such payment or redemption of, the Bonds then Outstanding on the first practicable retirement or redemption date thereof, including principal, premium, if any, and interest to the redemption date, this Agreement shall forthwith cease and determine and the parties hereto shall be released and discharged of and from all further obligations hereunder, without prejudice, however, to any claim which may have accrued prior thereto in favor of either party against the other. 51 ARTICLE XVI RIGHTS UPON TERMINATION Section 1601. FIXED IMPROVEMENTS. It is the intent of this Agreement that the Leased Premises shall be and remain the property of the Authority during the entire term of this Agreement and thereafter. Section 1602. EXCLUDED PERSONAL PROPERTY. Upon termination of this Agreement, the Lessee shall remove all Excluded Personal Property from the Leased Premises within thirty (30) days (or such longer period as shall be reasonably necessary) after the effective date of the termination and make all necessary or appropriate repairs to the Leased Premises resulting from such removal so as to restore the Leased Premises to proper operating condition, ordinary wear and tear and damage by casualty or condemnation excepted. If the Lessee fails to remove all or any portion of the Excluded Personal Property, the Authority may thereafter elect to remove the Excluded Personal Property (or any part thereof) at the Lessee's expense or elect to deem such Excluded Personal Property or any part thereof as abandoned by the Lessee to the Authority. 52 ARTICLE XVII ASSIGNMENT AND SUBLETTING Section 1701. SUCCESSORS AND ASSIGNMENTS. Except as provided in Section 611 hereof, but subject to the provisions of Section 1703 hereof, the Lessee shall not assign this Agreement or any part thereof in any manner whatsoever or assign any of the privileges recited herein without the prior written consent of the Authority. Such consent shall not be unreasonably withheld, having in mind the particular requirements of the Authority in maintaining its public service air transportation facilities. No such consent shall be granted unless the Leased Premises shall be continued to be used for aviation related purposes requiring airfield access. In the event of such assignment, the Lessee shall remain liable to the Authority for the remainder of the term of the Agreement to pay to the Authority or the Trustee the rentals provided for in Sections 501 and 502 hereof and to otherwise comply with the provisions of the Agreement for the term of this Agreement and the Lessee's assignee shall agree to comply with the applicable provisions of this Agreement. Said assignee shall not further assign its interest in this Agreement except with the prior written approval of the Authority and the Lessee; and any assignment by the Lessee shall contain a clause to this effect. Any assignment in violation of this Section 1701 shall be void. Section 1702. SUBLETTING. Except as otherwise provided herein, but subject to the provisions of Section 1703 hereof, the Lessee shall not sublease or permit any part of the Leased Premises to be occupied by others without the prior written consent of the Authority. No such consent shall be granted unless the Leased Premises shall be continued to be used for aviation related purposes requiring airfield access. Such consent shall not be unreasonably withheld, having in mind the particular requirements of the Authority in maintaining its public service air transportation facilities. In the event of such sublease, the Lessee shall remain liable to the Authority and the Trustee for the remainder of the term of this Agreement to pay to the Authority and the Trustee the rentals provided for in Section 501 and 502 hereof and to otherwise comply with the provisions of this Agreement for the term of this Agreement and the sublessee shall agree to comply with the applicable provisions of this Agreement. Said sublessee shall not further sublease its interest in this Agreement except with the prior written approval of the Authority and the Lessee; and any sublease shall contain a clause to this effect. Any subletting in violation of this Section 1702 shall be void. Section 1703. OPINION OF BOND COUNSEL REQUIRED. No assignment of this Agreement or sublease of the Special Facilities will be effective unless, in the opinion of Bond Counsel delivered to the Trustee, such assignment or sublease will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on any Tax Exempt Bonds received by any Owner. 53 ARTICLE XVIII GENERAL PROVISIONS Section 1801. NON-INTERFERENCE WITH OPERATION OF AIRPORT. The Lessee, by accepting this Agreement, expressly agrees for itself and its successors and assigns that it will not make use of the Leased Premises in any manner which might interfere with the landing and taking off of aircraft at the Airport or otherwise constitute a hazard. In the event the aforesaid covenant is breached, the Authority reserves the right to enter upon the Leased Premises and cause the abatement of such interference at the expense of the Lessee. The Authority shall maintain and keep in repair the Airport landing areas, including taxiways and aircraft parking apron located outside the Leased Premises and shall have the right to direct and control all activities of the Lessee in this regard. Section 1802. ATTORNEY'S FEES. In any action brought by any party to this Agreement or the Trustee for the enforcement of the provisions hereof, the prevailing party shall be entitled to recover interest and its reasonable attorney's fees. Section 1803. TAXES. The Lessee shall pay any property taxes which may be assessed against equipment, merchandise, or other personal property included in or located on the Land or other permitted portions of the Airport, including without limitation the Excluded Personal Property. The Land and Special Facilities are owned by the Authority and are exempt from ad valorem taxes. The parties recognize that the proposed use of the Land and Special Facilities is reasonably necessary to carry out the public purpose of the Authority as defined by the Act and that as such the leasehold interest of the Lessee of the Land and Special Facilities is exempt from taxation. The value of such exemption was considered in establishing the rental rates. In the event an ad valorem tax shall be levied on the leasehold interest of the Lessee in the Land and paid by the Lessee such payment shall be a credit against the ground rent due under Section 501 hereof. This credit shall be allowed only if the Lessee shall promptly forward to the Authority all notices and demands pertaining to such a tax levy and cooperate with the Authority and its attorneys in defense. Such cooperation shall include the execution of all documents, giving depositions and testimony and court appearances, including appeals. Litigation expenses of the Lessee shall not be a rent credit. Section 1804. LICENSE FEES AND PERMIT. The Lessee shall obtain and pay for all licenses, permits, fees or other authorization or charges as required under federal, State or local laws and regulations insofar as they are necessary to comply with the requirements of this Agreement and the privileges extended hereunder. Section 1805. AMENDMENTS TO THIS AGREEMENT. If at any time that Bonds are then Outstanding (including if provisions have been made for the payment thereof in accordance with 54 the provisions of the Indenture), and the Lessee and the Authority shall wish to amend, modify, change, alter or terminate this Agreement by execution of a Supplemental Agreement, and pursuant to Article XII of the Indenture the consent of the Trustee to such Supplemental Agreement is necessary, such alteration, amendment, change, modification or termination shall become effective only upon the prior written consent of the Trustee obtained in accordance with the provisions of Article XII of the Indenture. The Lessee and the Authority specifically reserve the right to execute a Supplemental Agreement, without the consent of the Trustee, (i) to provide for additional rental payments to secure future obligations undertaken by the Authority on behalf of the Lessee, provided that such additional payments shall be payable on a parity basis or subordinate to the Special Facilities Rental, or (ii) to exclude certain Land from the Leased Premises, provided that, giving effect to such exclusion, the operating utility or productive capacity of the remaining Leased Premises is not materially less than the operating utility or productive capacity of the Leased Premises prior to such exclusion. Section 1806. FORCE MAJEURE. Neither the Authority nor the Lessee shall be deemed to be in breach of this Agreement and no default shall arise hereunder by reason of failure to perform any of its obligations hereunder, if, while, and to the extent that such failure is due to strikes, boycotts, labor disputes, embargoes, shortages of materials, acts of God, acts of the public enemy, acts of superior governmental authority, weather conditions, floods, riots, rebellion, sabotage, or any other circumstances for which it is not responsible, and which are not within its control. This provision shall not apply to failures by the Lessee to pay rents, fees, or other charges, or to make any other money payments required by this Agreement. This provision shall not prevent the Authority from exercising its rights upon the occurrence of an Event of Default described in Subsections 1401(a)-(f) hereof. Section 1807. REFERENCES TO BONDS, TRUSTEE AND THE INDENTURE INEFFECTIVE WHEN BONDS ARE NO LONGER OUTSTANDING. From and after such time as there are no longer any Bonds Outstanding, and all fees and charges of the Trustee and any paying agents for the Bonds have been paid or provided for, to their respective satisfaction, all references in this Agreement to the Bonds, the Trustee and the Indenture shall be ineffective and neither the Trustee nor the Owners of any of the Bonds shall thereafter have any rights hereunder, saving and excepting those that shall have theretofore vested. Section 1808. MODIFICATIONS HEREOF AND OF INDENTURE; INDENTURE SUBORDINATE TO AGREEMENT. So long as an Event of Default shall not have occurred and be continuing hereunder, the Authority will not, without the written consent of the Lessee, agree with the Trustee to effectively amend, supplement, change, modify or alter the Indenture in any manner. The Lessee shall provide the Trustee with an executed copy of any instrument altering, amending, modifying, or rescinding this Agreement. So long as no Event of Default has occurred hereunder, the Indenture shall be subordinate in all respects to the provisions of this Agreement. 55 Section 1809. PARAGRAPH HEADINGS. The paragraph headings contained herein are for convenience in reference and are not intended to define or limit the scope of any provision of this Agreement. Section 1810. INTERPRETATIONS. This Agreement shall be interpreted in accordance with the laws of the State. Section 1811. NOTICES. Whenever any notice or payment is required by this Agreement to be made, given or transmitted to the parties hereto, such notice or payment shall be enclosed in an envelope with sufficient postage attached to insure delivery and deposited in the United States Mail or Federal Express Priority Overnight delivery, addressed to the Authority: Airport Director Indianapolis Airport Authority Indianapolis International Airport Box 100 2500 S. High School Road Indianapolis, Indiana 46241 to the Lessee to: Vice President - Property and Facilities Federal Express Corporation 2003 Corporate Avenue Memphis, Tennessee 38132 to the Trustee to: NBD Bank, N.A. One Indiana Square Indianapolis, Indiana 46266 Attn: Corporate Trust Department or such places as either party shall by written directive designate in the manner herein provided. Section 1812. PARTY'S CONSENT. Whenever any provision of this Agreement requires the approval, consent or exercise of discretion of any party to this Agreement, such action shall not be unreasonably withheld, conditioned, delayed or exercised. Section 1813. RESTORATION OF EXISTING FACILITY. Upon the expiration or earlier termination of either this Agreement or the Amended and Restated Lease (the "Existing Lease"), dated August 20, 1993, between the Lessee and the Authority, at the direction of the Authority, 56 the Lessee shall make such changes to the buildings, structures and improvements located on the premises described in the Existing Lease and to any of the Facilities as shall be necessary for the Authority to occupy or lease the premises of the Existing Lease or the Leased Premises as the case may be, separate from any remaining property leased to the Lessee under either the Existing Lease or this Agreement whichever shall not then be terminating. The provisions of this Section 1813 shall not apply if the Lessee and the Authority enter into a new lease providing for the letting of the facilities described in the terminating Existing Lease or this Agreement whichever shall not then be terminating. Section 1814. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 57 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the date first above mentioned at Indianapolis, Indiana. INDIANAPOLIS AIRPORT AUTHORITY By: /s/MICHAEL W. WELLS Michael W. Wells, President By: /s/ GORDON ST. ANGELO Gordon St. Angelo, Vice President By: /s/ BETTY J. JOHNSON Betty J. Johnson, Secretary By: /s/ LAWRENCE A. O'CONNOR, JR. Lawrence A. O'Connor, Jr. By: /s/ MURVIN S. ENDERS Murvin S. Enders FEDERAL EXPRESS CORPORATION By: /s/GILBERT MOOK Title: Vice President Properties and Facilities Date of Execution: 10-26-94 This instrument prepared by Philip C. Genetos, Esq., Ice Miller Donadio & Ryan, One American Square, Box 82001, Indianapolis, Indiana 46282-0002. 58 EXHIBIT A Property Description PARKING LAND A part of the Southeast quarter of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion County, Indiana, described as follows: Commencing at a bronze disk found at the Northeast corner of the Southeast quarter of said Section 26; thence South 00 degrees 04 minutes 04 seconds East (all bearings are based on the Indiana State Plane Coordinate system, East Zone (NAD83)) along the East line of said Southeast quarter 1338.76 feet to the Southeast corner of the North half of said Southeast quarter; thence South 89 degrees 09 minutes 40 seconds West along the South line of said North half, 320.01 feet to the Point of Beginning; thence continuing along said South line, South 89 degrees 09 minutes 40 seconds West 1002.51 feet to the Southwest corner of the Northeast quarter of the Southeast quarter of Section 26; thence South 89 degrees 09 minutes 40 seconds West along the South line of the Northwest quarter of the Southeast Quarter of Section 26, 104.00 feet; thence South 00 degrees 17 minutes 09 seconds East 516.09 feet; thence South 89 degrees 08 minutes 35 seconds West 93.42 feet; thence South 00 degrees 49 minutes 43 seconds East 83.11 feet; thence South 89 degrees 09 minutes 40 seconds West 665.24 feet; thence North 00 degrees 50 minutes 20 seconds West 1220.21 feet; thence North 89 degrees 09 minutes 40 seconds East 2138.52 feet to the West line of High School Road; thence South 00 degrees 04 minutes 04 seconds East along said West line 487.45 feet; thence South 89 degrees 09 minutes 40 seconds West 260.00 feet; thence South 00 degrees 04 minutes 04 seconds East 133.60 feet to the Point of Beginning. Containing 39.91785 acres, or 1,738,822 square feet, of land, more or less. [This portion of the page intentionally left blank] A - 1 PRIMARY LAND A part of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion County, Indiana, described as follows: Commencing at a bronze disk found at the Southeast corner of the Northeast quarter of said Section 26; thence North 00 degrees 11 minutes 02 seconds West (all bearings are based on the Indiana State Plane Coordinate system, East Zone (NAD83)) along the East line of said Northeast quarter 384.43 feet to the Point of Beginning; thence South 83 degrees 26 minutes 05 seconds West 1347.35 feet; thence South 63 degrees 52 minutes 43 seconds West 381.02 feet; thence South 55 degrees 41 minutes 47 seconds West 65.22 feet; thence South 07 degrees 35 minutes 44 seconds East 342.34 feet; thence South 82 degrees 22 minutes 11 seconds West 647.59 feet to the beginning of a curve concave southerly having a central angle of 28 degrees 03 minutes 52 seconds, a radius of 1986.84 feet and whose chord bears South 68 degrees 20 minutes 42 seconds West 963.49 feet; thence westerly along said curve to the left an arc distance of 973.19 feet; thence North 37 degrees 16 minutes 18 seconds West 80.20 feet; thence South 52 degrees 59 minutes 41 seconds West 163.02 feet; thence South 37 degrees 16 minutes 18 seconds East 80.20 feet; thence South 52 degrees 43 minutes 42 seconds West 1421.56 feet; thence North 45 degrees 03 minutes 18 seconds West 1038.57 feet; thence North 44 degrees 56 minutes 42 seconds East 2638.12 feet; thence North 64 degrees 58 minutes 06 seconds East 364.41 feet; thence North 44 degrees 56 minutes 42 seconds East 261.80 feet; thence South 45 degrees 03 minutes 18 seconds East 535.34 feet; thence North 44 degrees 56 minutes 42 seconds East 321.00 feet; thence South 45 degrees 03 minutes 18 seconds East 300.82 feet; thence North 44 degrees 56 minutes 42 seconds East 494.35 feet; thence South 45 degrees 03 minutes 18 seconds East 673.93 feet; thence North 44 degrees 56 minutes 42 seconds East 1234.77 feet; thence South 45 degrees 03 minutes 18 seconds East 458.28 feet; thence South 00 degrees 11 minutes 02 seconds East 902.48 feet to the Point of Beginning. Containing 145.84 acres, or 6,352,790 square feet, of land, more or less. [This portion of page intentionally left blank] A - 2 PARKING OPTION LAND A part of the Southwest Quarter of Section 26 and part of the Southeast Quarter of Section 26, Township 15 North, Range 2 East, Decatur Township, Marion County, Indiana described as follows: Commencing at the Southeast Corner of the Southwest Quarter of Section 26, Township 15 North, Range 2 East; thence North 00 degrees 30 minutes 14 seconds West (all bearings are based on the Indiana State Plane Coordinate system, East Zone (NAD83)) 670.29 feet along the East Line of said Southwest Quarter to the Southeast Corner of the North Half of the South Half of said Southwest Quarter and the POINT OF BEGINNING of this description; thence South 89 degrees 29 minutes 26 seconds West along the South Line of the North Half of the South Half of said Southwest Quarter, 660.00 feet; thence South 00 degrees 30 minutes 15 seconds East to the South line of said Section 26 a distance of 669.03 feet; thence South 89 degrees 35 minutes 59 seconds West along said South line 1051.51 feet; thence North 00 degrees 36 minutes 21 seconds West 15.00 feet; thence South 89 degrees 35 minutes 59 seconds West 102.72 feet to a corner of the right-of- way created with the Interstate 70 right-of-way plans; thence the following four courses with said right-of-way for Interstate 70: (1) North 79 degrees 05 minutes 19 seconds West 101.97 feet; (2) North 84 degrees 22 minutes 54 seconds West 583.66 feet; (3) North 52 degrees 44 minutes 11 seconds East 2447.30 feet to the beginning of a curve to the right having a central angle of 28 degrees 22 minutes 03 seconds, a radius of 2176.83 feet, and whose chord bears North 66 degrees 55 minutes 12 seconds East 1066.79 feet; (4) thence northeasterly 1077.77 feet along said curve; thence South 00 degrees 50 minutes 20 seconds East 1230.84 feet; thence North 89 degrees 09 minutes 40 seconds East 665.24 feet to the western line of a 2.349 acre tract of land described in instrument #90 93290 in the office of the Recorder of Marion County, Indiana, the next two courses are along the boundary of said 2.349 acre tract of land; (1) South 00 degrees 49 minutes 43 seconds East 441.88 feet; (2) thence North 89 degrees 08 minutes 35 seconds East 192.46 feet to the southeastern corner of said 2.349 acre tract of land on the East Line of the West Half of said Southeast Quarter which is along the southwestern corner of a 6.092 acre tract of land described in instrument #90 120938 in said Recorder's office; thence North 89 degrees 08 minutes 35 seconds East 505.46 feet along the southern boundary of said 6.092 acre tract of land to its southeastern corner on the western line of the 80-foot wide ingress and egress easement described in an INGRESS AND EGRESS EASEMENT AGREEMENT recorded as instrument #92 106542 in said Recorder's office; thence South 00 degrees 17 minutes 09 seconds East 298.38 feet to the South Line of said Southeast Quarter; thence South 89 degrees 07 minutes 09 seconds West 1822.89 feet along the South Line of said Southeast Quarter to the Southeast Corner of the Southwest Quarter of Section 26; thence North 00 degrees 30 minutes 14 seconds West 220.00 parallel with the West Line of said Southeast Quarter; thence North 89 degrees 07 minutes 09 seconds East 203.00 feet parallel with the South Line of said Southeast Quarter; thence North 00 degrees 30 minutes 14 seconds West 102.00 feet parallel with the West Line of said Southeast Quarter; thence South 89 degrees 07 minutes 09 seconds West 203.00 feet parallel with the South Line of said Southeast Quarter to the West Line of said Southeast Quarter A - 3 and the East Line of said Southwest Quarter; thence North 00 degrees 30 minutes 14 seconds West 348.29 feet along the East Line of said Southwest Quarter to the Point of Beginning. Containing 83.22238 acres, or 3,625,167 square feet, of land, more or less. [This portion of the page intentionally left blank] A - 4 EXHIBIT B Special Facilities The Special Facilities, which will be financed from the proceeds of the sale of the Series 1994 Bonds, will consist of an automated sort system, five buildings, an aircraft ramp with underground utility services, fueling/glycol distribution systems, an employee parking lot, equipment staging area and an expansion of the Company's existing facilities at the Airport and may include other structures, improvements and equipment permitted by the Act and the Code. B - 1 EXHIBIT C INSURANCE FORM (Requirements) - -------------------------------------------------------------------------------- DESCRIPTIVE SCHEDULE - -------------------------------------------------------------------------------- LIMITS OF LIABILITY KIND OF INSURANCE OF NOT LESS THAN ----------------- ---------------- ------------------------------------------------------------ Aircraft Liability: $120,000,000 Single Limit (PL, PD & PASS) ------------------------------------------------------------ Public Liability: $120,000,000 Single Limit (Bodily Injury, Death, Property Damage) - Premises/Operations - Contractual Liability - Independent Contractors - Products/Completed Operations - Personal Injury ------------------------------------------------------------ Automobile $2,000,000 ------------------------------------------------------------ Workers Compensation As required by law C - 1 EXHIBIT D Minimum Standards for Installation of Aircraft Fueling System D - 1 Indianapolis International Airport Minimum Standards for Installation of Aircraft Fueling Systems Indianapolis Airport Authority January, 1992 HNTB HOWARD NEEDLES TAMMEN & BERGENDOFF ARCHITECTS ENGINEERS PLANNERS MINIMUM STANDARDS FOR INSTALLATION OF AIRCRAFT FUELING SYSTEMS INDIANAPOLIS INTERNATIONAL AIRPORT Prepared for: INDIANAPOLIS AIRPORT AUTHORITY TABLE OF CONTENTS PAGE I. INTENT 1 II. REGULATORY REQUIREMENTS 2 III. STORAGE 3 IV. MATERIALS 5 V. SPILL MANAGEMENT 5 Vl. LEAKING MONITORING 7 VII. SAFETY 7 VIII. OPERATIONS PLANS 9 IX. REVIEW PROCESS 9 X. PUBLIC APPROVALS 15 XI. CONSTRUCTION 15 XII. PERIODIC INSPECTIONS 16 XIII. INSURANCE 17 TABLE OF CONTENTS (continued) I. APPENDIX A INSTALLATION OF UNDERGROUND STORAGE TANKS AND PIPING II. APPENDIX B STRUCTURAL AND IMPROVEMENT LOCATION PERMIT APPLICATION III. APPENDIX C APPLICATION FOR WORK PERMIT IV. APPENDIX D METROPOLITAN PLAN COMMISSION ORDINANCE V. APPENDIX E RESOLUTION NO. 9-1990 I. INTENT A. Introductory These standards implement the Indianapolis Airport Authority Fuel and Hazardous Liquid Policy adopted by the Board of Directors as Resolution No 9-1990 on June 20, 1990. The standards stated are minimum standards. These standards are to be followed in the design and installation of new aircraft fueling facilities. If conflicting requirements are set forth by applicable codes or regulations, the most stringent requirements shall apply. It is important that design of facilities be entrusted to those engineers with a thorough knowledge of the handling of hydrocarbon fuels and the specific requirements of aircraft refueling. B. Storage Location Location of fuel storage facilities requires careful consideration. Factors to be taken into consideration shall include safety, flight patterns, ground movements of aircraft traffic, accessibility of roads, location of storm and sanitary sewers, proximity of fire protection, proximity of property lines and buildings, geotechnical information, future expansion of the airport, and aesthetics. C. Environment The design of the fuel facilities will be controlled by the effects on the environment, such as air, water, or soil. Protection shall be provided to meet applicable codes and standards including need for vapor balance and oil\water separators where applicable. -2- II. REGULATORY REQUIREMENTS A. All standards shall be the latest edition. B. Installation shall meet the requirements of FAA Advisory Circular 150/5230-4. Aircraft Fuel Storage/Handling and Dispensing on Airports. C. Installation shall meet the requirements of the following NFPA requirements: NFPA 407 Standard for Aircraft Servicing NFPA 30 Flammable and Combustible Liquids Code NFPA 70 National Electric Code NFPA 78 Lighting Protection Code NFPA 77 Static Electricity NFPA 415 Aircraft Fueling Ramp Drainage D. Installation shall meet the requirements of the Indiana Flammable Liquids Code 675, IAC 22-2. E. Installation shall meet the requirements of 40 CFR 280 and 281 stated in "Underground Storage Tanks - Environmental Protection Agency Regulations." F. Installation shall meet the requirements of 150/5320-5B "Airport Drainage" for spill containment design. G. Installation of above ground tanks shall meet the requirements of 40 CFR 112 "Oil Pollution Prevention - Environmental Protection Agency Regulations." -3- H. lnstallation shall meet the requirements of the following bulletins published by the American Petroleum Institute. Bulletin 650 Welded Steel Tanks for Oil Storage Bulletin 1500 Storage and Handling of Aviation Fuel at Airports Bulletin 1523 Fueling Turbine-Powered Aircraft Bulletin 1542 Aircraft Equipment, Marking for Fuel Identification Bulletin 1581 Specification and Qualifications Procedures for Aviation Jet Fuel Filter Separators Bulletin 1800 Corrosion Control Bulletin RP2003 Recommend Practice for Protection Against Ignitions Arising Out of Static, Lightning, and Stray Currents I. Installation shall meet the design guidelines stated in "Development Guidelines for Airside and Corporate Village," published by the Indianapolis Airport Authority. -4- III. STORAGE A. General 1. All fuel shall be stored in aboveground tanks. 2. The use of underground storage tanks will only be permitted if extenuating circumstances prohibit the use of aboveground tanks. Special permission of the Indianapolis Airport Authority must be obtained. If approval is granted, the installation must comply with the requirements indicated in Appendix A. 3. Location of unloading facilities for the delivery of fuel to the storage tanks shall be so arranged that the delivery tank truck does not enter the secure area of the airport. Under no circumstances will unauthorized vehicles or personnel be allowed on the airport grounds. B. Tank Capacities 1. Fuel shall be stored in tanks with a maximum capacity of 20,000 gallons in any one tank. 2. Where the aggregate fuel storage capacity for any lessee at a location exceeds 100,000 gallons, the concept shall be reviewed and approved by the Indianapolis Airport Authority prior to beginning design. -5- C. Tank Capacities 1. All above ground tanks for the storage of fuel shall be constructed of steel, in accordance with the requirement of U.L. 142 for horizontal tanks or APl 650 for vertical tanks. 2. Tanks shall have constructed around and under them a secondary containment system. If dikes are used, they shall conform to NFPA 30. The secondary containment system including the area under the tanks shall be impervious to the fuels stored. In addition, any part of tanks that rest on or in the soil shall be coated and cathodically protected for a minimum or 30 years life. The cathodic protection design, installation and tests shall be supervised by corrosion professionals. -6- IV. MATERIALS A. Piping 1. All piping shall be located aboveground, or located underground in double wall containment piping with an approved leak detection system. 2. All piping shall be designed for the maximum pressures that can be encountered and be compatible with materials used. 3. All piping shall be designed to withstand physical abuse and fire. 4. All piping shall be capable of withstanding ultraviolet radiation. B. Miscellaneous Materials 1. All materials shall be designed for the handling of fuels. 2. All materials shall bear the seal of a recognized national testing organization. -7- V. SPILL MANAGEMENT A. Spill Prevention 1. All fueling systems shall have safety devices to prevent the accidental discharge of fuel. 2. Systems shall incorporate dead man controls into the normal operation of the fueling system. B. Spill Containment 1. Area around the tank truck unloading shall be diked and/or sloped to contain any leakage. 2. Area around filters, pumps, etc. that have a tendency to leak or that require periodic maintenance where fuel can discharge from the system shall be diked and/or sloped to contain any leakage. 3. Stormwater `from areas where containment is required shall be directed to an oil/water separator where any oil or hydrocarbons in the stormwater shall be separated and contained. 4. Capacity of containment vessel shall be adequate to hold the largest volume of a tank truck that is used to deliver fuel to the site and/or used at the site. 5. Alarms shall be provided to indicate that a spill has occurred and that the containment vessel can no longer accept the full volume of an additional accidental discharge. -8- C. Overflow Control 1. Alarms shall be provided on each storage tank to indicate when the tank is filled to 90% and 95% of capacity as required by regulations. 2. A separate alarm and control shall be provided on each storage tank to stop the filling operation and isolate the storage tank prior to the tank being filled beyond its capacity. 3. A report of any accidental discharge of fuel shall be sent to the Indianapolis Airport Authority within 24 hours of the spill. Report shall indicate the amount of the spill, the cause of the spill, and what corrective action has been taken. -9- VI. LEAK MONITORING A. A weekly visual inspection shall be made by the lessee's qualified personnel to detect the presence of any accidental discharge from the system. B. Lessee shall report to the Indianapolis Airport Authority in writing within 24 hours whenever any leaks have been detected, the cause of the leak and the action taken. C. An alarm system shall be operable twenty-four hours a day with indication in the lessee's facility with visual indication to the Indianapolis Airport Authority police and fire dispatch. -10- VII. SAFETY A. Fire Protection 1. Aircraft fueling systems shall be located so as not to endanger building and public access in the event of a fire. 2. Water/foam spray monitors shall be provided for all storage tank installations where tanks are located within 50 feet of the property line or 100 feet of an important building or a property line that can be built on. 3. Provisions shall be made for adequate access to water supplies for use in fire fighting. 4. Fire extinguishers shall be provided at all dispensing and unloading stations. 5. Static electricity control on delivery systems and equipment shall meet the requirements of U.L. B. Inspection 1. Final inspection by the Indiana Fire Prevention and Building Safety shall be made prior to any fuel being placed in the system. 2. The Indianapolis Airport Authority shall inspect and approve the installation prior to any fuel being placed in the system. 3. Written documentation of all required approvals shall be submitted to the Indianapolis Airport Authority. -11- C. Testing 1. All tanks shall be pressure tested in accordance with the appropriate codes and regulations. 2. All piping shall be pressure tested in accordance with the appropriate codes and regulations. 3. All electrical equipment shall be U.L. listed. 4. Copies of all test reports shall be submitted to the Indianapolis Airport Authority. 5. All containment piping and vessels shall be pressure tested after installation in accordance with the manufacturer's recommendations but at a pressure of not less than 1.5 times the design pressure. D. Miscellaneous Requirements 1. Area lighting shall be provided for the safe operation of the system at night. 2. Provisions shall be made for disposal of samples, waste fuel or recoverable fuel in compliance with applicable regulations. 3. Where aboveground tanks and/or piping can be isolated, adequate provisions shall be made to relive the pressure developed due to temperature variations within the system. If pressure relief valves are used, they shall discharge to a containment area. -12- VIII. OPERATION PLANS A. A spill prevention control and countermeasure (SPCC) plan shall be prepared in accordance with Federal Regulations before the facility is in operation with a copy of the plan provided to the Indianapolis Airport Authority two months prior to operation. B. A Standard Operating Procedure (SOP) shall be provided for use by fuel handling personnel. This shall be prepared following guidelines in FAA AC150/5230-4 paragraphs 16 and 17. A copy of this shall be provided to the Indianapolis Airport Authority one month prior to the facility being in operation. -13- IX. REVIEW PROCESS Approvals Mandatory Signed plan approval by the Indianapolis Airport Authority is required prior to the undertaking of any site improvements, construction or installation, including clearing, grading, paving, signs, structures, landscaping, building additions or alterations and subdivisions. Review should also be coordinated with state and local agencies to include the Indiana Department of Fire and Building Services and the Indianapolis Department of Metropolitan Development. Following is the step-by-step process required by the Indianapolis Airport Authority for obtaining approvals for any new building project: A. Obtain a Lease Agreement with the Indianapolis Airport Authority. B. Application for the Indianapolis Airport Authority Improvement Location Permit. See Appendix B. C. Schematic/preliminary review and approval of project by the Indianapolis Airport Authority. D. Final approval by Airport Authority Board of final plans and specifications. E. Submittal and approval of building project construction documents and Marion County review process. -14- F. Issuance of Work Permit by the Indianapolis Airport Authority. See Appendix C. Copies of required Indianapolis Airport Authority forms are in the Appendix of this document and are available at the office of the Indianapolis Airport Authority. Two-Step Process Plans shall be submitted to the Airport Authority at the completion of the following stages of planning and design: A. Schematic/Preliminary 1. Plans of proposed aircraft fueling system shall be submitted for review to the Indianapolis Airport Authority at the preliminary design phase. Signed approval shall be obtained prior to proceeding with final design. B. Construction Documents At each stage the following elements will be considered: 1. Site Plan 2. Building Design (if required) 3. Landscaping 4. Signage -15- i. Proposed easements j. Site drainage k. Grades, existing and proposed l. Truck loading and service areas m. Developed area in square feet as a percentage of total lease area n. Fencing and security plan, if applicable B. Building Design, if required for pumping processes 1. Elevations, in color or with color samples 2. Perspective rendering (optional) 3. Building materials 4. Description of proposed operation and estimate of maximum number of employees. C. Signage 1. In accordance with the requirements of the State of Indiana and the FAA. -16- D. Construction Documents Approval At the second review, engineering, architectural, site development and landscape working drawings and specifications shall be submitted to The Indianapolis Airport Authority for review. Three sets of plans shall be submitted for review. One set of plans with Airport comments will be returned for update and correction. Three sets of construction plans plus original marked up preliminary plans shall be returned for Airport Authority review. In addition, samples of all exterior material of texture and color shall be submitted for review and approval. A sample panel of exterior materials may be required. Approval will be granted or a set of plans returned to the lessee for revision. Plans shall be submitted to the Indianapolis Airport Authority for final review at least thirty (30) days prior to submission for the Improvement Location Permit and Building Permit required by Marion County. This will allow for a thirty (30) day review and approval, or disapproval process. If the Indianapolis Airport Authority does not approve the final plans and specifications within the thirty (30) day time period, they are to be deemed disapproved. Upon completion of the final design, the plans and specifications for the aircraft fueling system shall be submitted to the Indiana Fire Prevention and Building Services for approval. E. As-Built Drawings Within thirty (30) days following completion of the initial construction and any subsequent additions, alterations or improvements, Lessee shall present to the Indianapolis Airport Authority a complete set of reproducible (mylars) "record" drawings. This submittal shall include a copy of the specifications and shop drawings. As built drawings shall be mylar reproducible copies. In addition, complete specifications including all amendments and changes issued during construction shall be included. The exterior site and utilities as built -17- drawings shall also be provided in IAA AutoCAD Drawing File Standards format on computer disks. F. Basis for Approval Review and approval shall be based on standards set forth in this Minimum Standards. Plans shall be reviewed not only for the quality of the specific proposal, but also for the development's effect and impact on its neighbors and on the general surroundings. Evaluation shall be made of spatial relationships among buildings and between buildings and other surrounding elements. With the intent of minimizing detrimental visual impact, careful concern will be given to location and treatment of utility and service facilities. Site ingress and egress may be limited to permit efficient flow of traffic on abutting streets. G. Interpretation and Waiver The Indianapolis Airport Authority's interest in reviewing the above items is to assure that a high quality of compatible development and safety is consistently achieved. When questions of judgment or interpretation arise, the decision of the Indianapolis Airport Authority is final. All issues not covered specifically by these Minimum Standards will be resolved by the Airport Authority on a case-by-case basis. -18- In order to meet special situations which may not be foreseen, it will be desirable from time to time for the Airport Authority to allow variances of certain requirements. Any variance granted is made with the welfare of the overall development in mind and is not to be considered precedent setting. XI. CONSTRUCTION Construction activity shall commence after the review process and public approvals are completed. Proper submittal of construction schedules and coordination with the Indianapolis Airport Authority shall be completed, during, and prior to the start of activity. Periodic meetings shall be set as required by the Indianapolis Airport Authority and the lessee to install a fueling system to coordinate the construction and minimize problems to the existing facility operations. A. Upon completion of the final design, the plans and specifications for the aircraft fueling system shall be submitted to the Indiana Fire Prevention and Building Services for approval. B. Submit application for air, waste water and fuel storage tank permits as applicable to governing county, state and/or federal agencies. C. Upon approval of the Indiana Fire Prevention and Building Safety and other governing county, state and/or federal agencies, the plans and specifications shall be submitted to the Indianapolis Airport Authority for approval. No work shall commence until signed approval by the Indianapolis Airport Authority has been obtained. -19- D. Submit proof to the Indianapolis Airport Authority that the fuel system installer has been properly trained in the installation of such systems. Submit this information to the Indianapolis Airport Authority prior to commencement of installation. E. If removal of existing storage tanks or other utilities are required, obtain necessary permits and comply with applicable regulations. -20- XII. PERIODIC INSPECTIONS A. All tanks and piping shall be inspected annually to ensure the system is operating satisfactorily . B. Inspections shall be made by an independent organization that is qualified to make the inspections and is acceptable to the Indianapolis Airport Authority. C. Results of inspections in the form of a report shall be submitted to the Indianapolis Airport Authority within 20 days of the inspection. D. Any failure of the aircraft fueling system shall be corrected within 10 days of the date of the inspection or the system shutdown and all fuel removed from the system. E. If the fuel has been removed from the system, the lessee shall submit documentation of what corrective action has been taken and obtain written authorization from the Indianapolis Airport Authority before fuel is to be placed in the system. -21- APPENDIX A APPENDIX A INSTALLATION OF UNDERGROUND STORAGE TANKS AND PIPING Where it has been determined by the Indianapolis Airport Authority that underground storage tanks and/or piping can be used for an aircraft fueling system, the system shall be designed to meet these additional minimum criteria. A. Underground Tanks 1. Underground storage tanks shall be designed, constructed, and installed in accordance with the requirements of Federal Underground Storage Tank (UST) Regulations. 2. Underground storage tanks shall be a 30-year warranted, U.L. approved fiberglass reinforced plastic (FRP) tank, a 30-year limited warranty steel tank constructed in accordance with requirements of the Steel Tank Institute's sti-P3 standards or approved FRP laminated steel tank constructed in accordance with Underwriters Laboratory 58. 3. All tanks shall be of 360 degree double wall construction with all connections installed in manholes so that, in the event of a leak, all fuel is contained by the double wall containment vessel. 4. Cathodic protection shall be installed for all ferrous metal tanks. Design, installation and testing of cathodic protection system shall be performed by experienced and qualified personnel. Satisfactory proof of experience and certification shall be provided to IAA. 5. Tanks shall be installed in accordance with the manufacturer's instructions. 6. All underground tanks shall be installed with an approved anchoring method so designed to prevent the movement of an empty tank upon encountering a high water table. B. Underground Piping 1. All piping under ground shall be of double wall construction. The containment pipe shall be designed for the same pressures as the carrier pipe or measures taken so that the containment pipe will not be subjected to pressures greater than its pressure rating. A-1 2. All underground piping shall have cathodic protection. C. Leak Detection 1. Leak detection and alarm system shall be provided on all underground piping and underground tanks. 2. Leak detection, system shall continuously monitor the underground piping and tanks for the presence of water and hydrocarbon fuels. 3. Upon detection of a leak, the alarm shall be indicated in the lessee's facility and a visual indication to Indianapolis Airport Authority, police and fire dispatch. APPENDIX B STRUCTURAL & IMPROVEMENT LOCATION PERMIT APPLICATION Appendix B A. LOCATION OF IMPROVEMENT AIRPORT Indianapolis International Mt. Comfort Eagle Creek Metropolitan Speedway Heliport ADDRESS OF _______________________________________________________________ IMPROVEMENT Number Street City Zip Code B. AIRPORT TENANT INFORMATION NAME _______________________________________________________________ Lessee that has agreement with Airport Authority ADDRESS _______________________________________________________________ Number Street City Zip Code LEASE DATE ______________________ Telephone # of Lessee __________________ USE Is the proposed improvement permitted: 1. In the designated area of the airport layout plan? _____ _____ YES NO 2. In the Lease Agreement cited above? _____ _____ YES NO COST Estimated cost of improvements $_____________________________________ THE LESSEE HAS AUTHORIZED THE UNDERSIGNED TO SECURE THE IMPROVEMENT LOCATION PERMIT. INFORMATION CONTAINED ON THIS FORM AND ON THE SECURED PLOT PLAN IS COMPLETE AND ACCURATE. I UNDERSTAND THAT APPROVAL OF A PERMIT GRANTED UNDER THIS FORM DOES NOT ALLEVIATE' THE NEED TO COMPLY WITH APPLICABLE TERMS AND CONDITIONS OF THE LEASE AGREEMENT DATED ABOVE, INCLUDIGN SUBMITTAL FOR APPROVAL BY THE BOARD OF FINAL PLANS AND SPECIFICATIONS FOR THIS IMPROVEMENT, AND OBTAINING THE APPLICABLE PERMITS OR APPROVALS REQUIRED BY CITY/COUNTY ORDINANCES OR STATE LAW. __________________________________ Lessee __________________________________ Title __________________________________ Phone Number - - - - - - - AIRPORT USE ONLY BELOW THIS LINE - - - - - - - - - - C. IAA Permit # _______________________________ (1) DOT Driveway Permit # _______________________________ (1) DPW (Drainage) Permit # _______________________________ County Permit # _______________________________ State Building Commission Approval _______________________________ Sewer ____________________Septic System _______________________________ APPROVED WAIVED(2) Proposed use ___________________________ _____________ ____________ Building and right-of-way setbacks _____________ ____________ Maximum height _____________________MSL _____________ ____________ Lease area ______________________ sq. ft. _____________ ____________ Developed area sq. ft. ______________ % _____________ ____________ Drainage & Sediment Control Plan 24-1800 _____________ ____________ Utility locations and connections _____________ ____________ Security Plan _____________ ____________ Site Plan and Survey _____________ ____________ Sign location and size _____________ ____________ FAA Notice of Construction (Form 7460 _____________ ____________ Remarks: __________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ APPROVED ________________________________ _________________________________________ Daniel C. Orcutt, Executive Director (1) Manon County only (2) List separately reasons and date Board waiver given. B-1 APPENDIX C Appendix C APPLICATION FOR WORK PERMIT --------------------------- DATE_______________________ Indianapolis Airport Authority - Indianapolis International Airport EXECUTIVE DIRECTOR - DANIEL C. ORCUTT ORGANIZATION REQUESTING PERMIT________________INDIANAPOLIS, INDIANA 46241-(317) 248-9594 CABLE WORLDPORT - INDIANAPOLIS STREET ADDRESS OR P.O. BOX #___________________________________________________ CITY______________________________,STATE______________ZIP______________________ PHONE (INCLUDING AREA CODE)____________________________________________________ PERSON TO CONTACT WITH QUESTIONS________________________PHONE__________________ LOCATION OF PROPOSED WORK______________________________________________________ COMPLETE DESCRIPTION OF PROPOSED WORK__________________________________________ _______________________________________________________________________________ _______________________________ESTIMATED COST $________________________________ CONTRACTOR/VENDOR_____________________________PHONE____________________________ ADDRESS____________________________CITY_______________, STATE______ZIP_________ PROPOSED START DATE________________ESTIMATED COMPLETION________________________ - -------------------------DO NOT WRITE BELOW THIS LINE-------------------------- PLANS SUBMITTED_________________PROOF OF INS___________________ SPECS SUBMITTED_________________OTHER__________________________ APPROVED DISAPPROVED DATE EXECUTIVE DIRECTOR-------------------- __________ ____________ _________ MANAGING DIRECTOR ADMINISTRATION-------__________ ____________ _________ MANAGING DIRECTOR OPERATIONS-----------__________ ____________ _________ DIRECTOR PLANNING & DEVELOPMENT--------__________ ____________ _________ DIRECTOR BUILDING OPERATIONS-----------__________ ____________ _________ DIRECTOR AIRFIELD MAINTENANCE----------__________ ____________ _________ APPROVED_____RESUBMIT AS DIRECTED_______DENIED______PERMIT NO._________________ SIGNED________________________________________________DATE_____________________ RESTRICTIONS, IF ANY___________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ BOARD MEMBERS: JOHN M. VAUGHAN - GORDON ST. ANGELO - CECIL D. ROSS - PRESIDENT VICE PRESIDENT SECRETARY LAWRENCE A. O'CONNOR, JR.- JAMES L. TUOHY MEMBER MEMBER APPENDIX D Appendix D METROPOLITAN PLAN COMMISSION DOCKET NO. 61-A0-4 ORDINANCE BE IT ORDAINED by the Marion County Council of Marion County, Indiana, that Marion County Council Ordinance No. 8-1957, adopted by The Marion County Council on March 28, 1957, and subsequently amended pursuant to Section 85 of Chapter 283 of the Indiana General Assembly for 1955, as amended, and all zoning ordinances adopted as parts thereof, be amended by the addition of the following zoning district: SECTION 1.00 ESTABLISHMENT OF AIRPORT SPECIAL USE DISTRICT AIRPORT SPECIAL USE DISTRICT, which primary zoning district shall permit the following uses: PUBLIC AIRPORTS municipally owned or operated, including all necessary navigation and flight operation facilities, and accessory uses including, but not limited to, terminal, storage and servicing facilities for airplanes or other aircraft, air research laboratories and other accessory uses directly related to the operation of such airport and an integral part thereof, including, but not limited to, transportation, restaurant, hotel or motel facilities and similar related services for the comfort and accommodation of air passengers and the public; - subject to the following requirements: SECTION 2.00 AIRPORT SPECIAL USE DISTRICT REGULATIONS 1. No use permitted in the AIRPORT SPECIAL USE DISTRICT shall cause injury or damage to adjacent land uses, property or the public health, safety or welfare. Provided, however, that compliance by such public airport with all applicable safety and operational standards and regulations of the Federal Aviation Agency and other applicable federal aviation regulatory authorities shall be deemed compliance with this sub-section's requirements, as applied to navigation and flight operational uses. 2. All uses with the AIRPORT SPECIAL USE DISTRICT shall be served by and have access only from interior access roads located within said DISTRICT to carry vehicular traffic to and from major entrances and exits serving the airport, and designed and constructed in accordance with local street specifications of the Subdivision Control Ordinance of Marion County, Indiana, Ordinance 58-AC-13, as amended. 3. For each use permitted within the AIRPORT SPECIAL USE DISTRICT, adequate off-street parking area with concrete or bituminous paved surface shall provided. Such parking area shall not be located within one hundred (100) feet of any boundary of the AIRPORT SPECIAL USE DISTRICT, unless a compact hedge or row of shrubbery of at least four (4) feet in height is provided between such parking area and District boundary. In no case shall such parking area be located closer to a District boundary than ten (10) feet. 4. No building or structure, or part thereof, shall be located within one hundred (100) feet of any boundary of the AIRPORT SPECIAL USE DISTRICT, and such one hundred (100) foot buffer area shall be maintained in turf, plant material or as off-street parking area, as provided in sub-section (3) above. 5. Prior to improvement location permit issuance for any building or structure within the AIRPORT SPECIAL USE DISTRICT, the plot or site plan for such building or structure, in conformity with all applicable zoning requirements, shall be filed with the Metropolitan Planning Department of Marion County, Indiana. D-1 SECTION 3.00 ZONING MAPS DESIGNATION BE IT FURTHER ORDAINED that all land within said district shall be designated upon the applicable zoning maps (adopted as a part of said zoning ordinances and Ordinance No. 8-1957) by the symbol "A" superimposed in the approximate geographic center of such district, the boundaries of which district to be designated and outlined by a dashed line. BE IT FURTHER ORDAINED that an emergency exists for the passage of this ordinance, and that the same shall be in full force and effect from and after this date. Beurt R. SerVaas ------------------------------ Ronald E. Bingman ------------------------------ Wm. A. Brown ------------------------------ H. Norris Cottingham ------------------------------ James A. Buck ------------------------------ Edwin J. Koch ------------------------------ THE MARION COUNTY COUNCIL OF MARION COUNTY, INDIANA Date: January 7, 1963 ---------------------------- Attest: John T. Sutton by Charlotte Newman, Deputy ----------------------------------------------- AUDITOR OF MARION COUNTY, INDIANA D-2 APPENDIX E Appendix E RESOLUTION NO. 9-1990 WHEREAS, there are 82 underground hazardous liquid storage tanks on Indianapolis International Airport with a total capacity of 921,000 gallons of active underground storage; and WHEREAS, 850,000 gallons of hazardous liquid storage are stored in one (1) above-ground tank; and WHEREAS, there are federal, state, and local agencies involved in the regulation of the handling and storage of hazardous liquids which regulation imposes potential liability upon Authority as landowner for the acts or omissions of its tenants with respect to environmental impairment; and WHEREAS, the Indianapolis Airport Authority requested the Indianapolis Center for Advanced Research, Inc., to prepare recommendations on the Storage of Hazardous Liquids at Authority's airports; and WHEREAS, the Indianapolis Center for Advanced Research, Inc., has recommended that hazardous liquids be stored in as few geologically suitable locations as possible and that hazardous liquid storage and dispensing systems provide for leak detection and secondary containment; and, that hazardous liquid storage and dispensing systems be designed to minimize the total length of underground piping; and WHEREAS, the Indianapolis Airport Authority has developed a fuel and other hazardous liquid storage and dispensing policy to minimize its liability exposure for environmental impairment: E-1 NOW, THEREFORE, BE IT RESOLVED by the Board of the Indianapolis Airport Authority to adopt the following fuel and hazardous liquid policy: FUEL AND HAZARDOUS LIQUID POLICY A. Tenant fuel storage and fueling systems shall be limited to common carriers and fixed-based operators and owners of corporate hangars. B. Fuel storage and fueling systems shall be located only in those areas that are geologically suitable for natural containment of leaks. C. Fuel storage and fueling systems shall be limited to above- ground installations unless space or critical safety requirements require underground installation. D. Fuel storage and fueling systems shall be designed to minimize total length of underground piping. All piping shall provide secondary containment. E. Fuel and other hazardous liquids shall be stored in as few different locations on the airport as possible. Fuel and other underground hazardous storage tanks shall not exceed 20,000 gallons in capacity. F. All fuel and other hazardous liquid storage and dispensing systems, either above ground or underground, shall provide for adequate secondary containment and for automated leak detection as approved by Authority and in compliance with all Federal, State, and local ordinances, rules and regulations. G. Tenant operating fuel storage and other hazardous liquid storage and dispensing systems shall comply with minimum insurance requirements as established by Federal or State law, which bonds and insurance shall designate Authority as an additional insured. E-2 H. Tenant's compliance with Federal, State and local laws or regulations shall be monitored by Authority by inspection and receipt of a copy of any report received by Tenant which may be issued by any Federal, State, or local agency charged with enforcement of regulatory standards for fuel or other hazardous liquid storage or dispensing equipment with respect to Tenant's compliance or non-compliance with such regulatory standards. Strict compliance with all environmental regulations by Tenant shall be required. I. The Staff is authorized to develop such procedures to implement the foregoing policy. Adopted this 22nd day of June, 1990. INDIANAPOLIS AIRPORT AUTHORITY /s/ JOHN M. VAUGHAN John M. Vaughan, President /s/ GORDON ST. ANGELO Gordon St. Angelo, Vice President /s/ LAWRENCE A. O'CONNOR, JR. Lawrence A. O'Connor, Jr., Secretary /s/ JAMES L. TUONY James L. Tuony, Member /s/ BETTY J. JOHNSON Betty J. Johnson, Member E-3 EXHIBIT E Development Guidelines for Airside and Corporate Village INDIANAPOLIS INTERNATIONAL AIRPORT DEVELOPMENT GUIDELINES FOR AIRSIDE AND CORPORATE VILLAGE INDIANAPOLIS AIRPORT AUTHORITY SEPTEMBER 1990 HOWARD NEEDLES TAMMEN & BERGENDOFF ARCHlTECTS ENGINEERS PLANNERS TABLE OF CONTENTS PAGE INTENT 1 INTRODUCTION 2 REVIEW PROCESS 4 PUBLIC APPROVALS 8 LAND USE RESTRICTIONS 9 SITE DEVELOPMENT STANDARDS 10 BUILDING DESIGN 23 UTILITY AND SERVICE REQUIREMENTS 25 SIGNAGE AND GRAPHIC REQUIREMENTS 26 SITE LIGHTING REQUIREMENTS 29 LANDSCAPE REQUIREMENTS 32 IRRIGATION 38 OTHER REQUIREMENTS 39 APPENDIX A. Structural & Improvement Location Permit Application A-1 B. Request for Work Permit B-1 C. FAA Form 7460 C-1 D. Ordinance D-1 E. Approved Plant List E-1 i LIST OF FIGURES FIGURES PAGE 1 Site Location Map 3 2 Site Development Criteria - Plan 11 3 Site Development Criteria - Section 12 4 Standard Curb Detail 14 5 Parking Lot Layout 15 6 Standard Handicap Parking Space 16 7 Fence Detail 21 8 Fence Gate Detail 22 9 Building Identification Sign 27 10 Lighted Bollard Detail 30 11 Unlighted Bollard Detail 31 12 Parking Lot Planting 34 13 Parking Lot Island Planting 35 14 Sideyard Landscape Treatment 36 15 Mounding and Mound Planting 37 ii INTENT All improvements constructed on the Airside and Corporate Village property are subject to the standards and requirements set forth in this document for the following purposes: a. to establish aesthetic values designed to complement and benefit all Airside and Corporate Village facilities; b. to develop the Airside and Corporate Village with a park-like character ensuring it is a continuing asset to the Indianapolis Metropolitan area and to the State of Indiana; c. to ensure proper, desirable use and appropriate development and improvement of each site within the airport; d. to protect lessees and/or tenants of buildings against improper and undesirable use of surrounding building sites which will depreciate the value of their properties; e. to guard against the erection of structures built of improper or unsuitable materials: f. to encourage the erection of attractive improvements with appropriate locations on building sites; g. to ensure and maintain proper setbacks from streets, highways, and adequate open spaces between structures which will ensure a park-like character; h. in general, to provide for high quality of improvements of said property; i. to protect the health, safety and welfare of the community utilizing these facilities; j. to conserve natural resources inherent in said property. -1- INTRODUCTION This document outlines the Indianapolis Airport Authority's developmental guidelines associated with the Airside and Corporate Village. Full compliance will be expected except in those cases where the provisions are not applicable. Any deviations from the regulations outlined herein must be approved by the Airport Authority. Authority reserves the right to make periodic inspections to ensure compliance with these provisions and to initiate appropriate corrective measures. The developmental guidelines, while generally designed to promote the harmonious aesthetics and appropriate development of the Properties as a whole as well as specific Parcels, may differ in content and applications depending on the approved use for a Parcel. Such development parameters for the Properties common to all Parcels may appear herein but may not be applicable to the specific Parcel hereby leased. Prospective lessees are encouraged to review and understand the criteria established within these developmental guidelines. Inquiries are advised to prevent needless and costly delays. -2- Figure 1 Site Location Map HNTB REVIEW PROCESS APPROVALS MANDATORY Signed plan approval by the Indianapolis Airport Authority is required prior to the undertaking of any site improvements, construction or installation, including clearing, grading, paving, signs, structures, landscaping, building additions or alterations, and subdivisions. Review should also be coordinated with state and local agencies to include the Indiana Department of Fire and Building Services and the Indianapolis Department of Metropolitan Development. Following is the step-by-step process required by the Indianapolis Airport Authority for obtaining approvals for any new building project: 1. Obtain a Lease Agreement with Indianapolis Airport Authority. 2. Application for Indianapolis Airport Authority Improvement Location Permit. See Appendix A. 3. Schematic/preliminary review and approval of project with Indianapolis Airport Authority. 4. Final approval by Airport Authority Board of final plans and specifications. 5. Submittal and approval of project construction documents and Marion County review process. 6. Issuance of Work Permit by Indianapolis Airport Authority. See Appendix B. Copies of required Indianapolis Airport Authority forms are in the Appendix of this document and are available at the office of the Indianapolis Airport Authority. TWO-STEP PROCESS Plans must be submitted to the Airport Authority at the completion of the following stages of planning and design: 1. Schematic/Preliminary 2. Construction Documents -4- At each stage the following elements will be considered: 1. Site Plan 2. Building Design 3. Landscaping 4. Signage 1. PRELIMINARY APPROVAL At the initial or schematic/preliminary review, three (3) sets of plans will be submitted to include: a. SITE PLAN (1) Site location including certified plat and legal description described from Airport Authority monumentation system and the establishment of state plane coordinates for all lease corners (2) Site topographic survey in accordance with Indiana Administrative Code, Title 864, Article 1.1, Chapter 13 (3) Building location, orientation, overall dimensions (4) Setbacks (5) Pedestrian and vehicular circulation (6) Landscape areas including quantity, location and type, i.e., ornamental tree or shrub, evergreen tree or shrub, deciduous tree or shrub, groundcover, annuals or perennials (7) Site lighting plan (8) Connections to existing utility lines (9) Proposed easements (10) Site drainage (11) Grades, existing and proposed (12) Number and location of employee and guest parking (13) Truck loading and service areas (14) Developed area in square feet as a percentage of total lease area (15) Fencing and security plan, if applicable (16) FAA Form 7460, "Notice of Construction" -5- b. BUILDING DESIGN (1) Elevations, in color or with color samples (2) Perspective rendering (optional) (3) Building materials (4) Description of proposed operation and estimate of maximum number of employees c. SIGNAGE 2. CONSTRUCTION DOCUMENTS APPROVAL At the second review, engineering, architectural, site development and landscape working drawings and specifications will be submitted for review. Three sets of construction plans plus original marked up preliminary plans will be returned for Airport Authority review. In addition, samples of all exterior material of texture and color will be submitted for review and approval. A sample panel of exterior materials may be required. Approval will be granted or a set of plans returned to the lessee for revision. Plans will be submitted to Airport Authority for final review at least thirty (30) days prior to submission for the Improvement Location Permit and Building Permit required by Marion County. This will allow for a thirty (30) day review and approval, or disapproval, process. If the Airport Authority does not approve the final plans and specifications within the thirty (30) day time period, they are to be deemed disapproved. 3. AS-BUILT DRAWINGS Within thirty (30) days following completion of the initial construction and any subsequent additions, alterations or improvements, lessee shall present to Authority a complete set of reproducible (mylars) "record" drawings. This submittal will include a copy of the specifications and shop drawings. In addition, this information will be presented on a computer diskette, using the AutoCAD format. BASIS FOR APPROVAL Review and approval will be based on standards set forth in these Development Guidelines. Plans will be reviewed not only for the quality of the specific proposal, but also for the development's effect and impact on its neighbors and on the general surroundings. Evaluation will be made of spatial relationships among buildings and between buildings and other surrounding elements. -6- With the intent of minimizing detrimental visual impact, careful concern will be given to location and treatment of utility and service facilities. Site ingress and egress may be limited to permit efficient flow of traffic on abutting streets. INTERPRETATION AND WAIVER The Airport Authority's interest in reviewing the above items is to assure that a high quality of compatible development is consistently achieved. When questions of judgment or interpretation arise, the decision of the Airport Authority is final. All issues not covered specifically by these Development Guidelines will be resolved by the Airport Authority on a case-by-case basis. In order to meet special situations which may not be foreseen, it will be desirable from time to time for the Airport Authority to allow variances of certain requirements. Any variance granted is made with the welfare of the overall development in mind and is not to be considered precedent setting. -7- PUBLIC APPROVALS All pertinent requirements of public agencies must be adhered to in the development of this property, and all plans must be routed through the typical permits procedures for the City of Indianapolis and State of Indiana, i.e., drainage, improvement location, driveway, building, etc. Prior to development, each lessee must verify the current code requirements as they may be amended. These Development Guidelines may be more restrictive than local land use, site development standards, landscape requirements, or in other matters. In every case in which these guidelines are at variance with public agency requirements, the more restrictive regulations will govern. -8- LAND USE RESTRICTIONS Permitted uses for the Airside and Corporate Village are established by the Airport Authority subject to any limitations in Ordinance 61-A0-4, as amended. See Appendix D. The Airside and Corporate Village is zoned Airport Special Use, and restrictions are as indicated in that ordinance. Certain land uses are prohibited, and they are as follows: - Heavy manufacturing/industrial. - Storage of any hazardous animate or inanimate materials or objects. - Storage or transport of Class-A explosives, as defined in 49 CFR Part 107.3. - Storage, manipulation, or transport of any materials which would adversely affect the insurance coverage of the premises required of any tenants. -9- SITE DEVELOPMENT STANDARDS 1. BUILDING HEIGHT: Will be restricted in accordance with Airport requirements and FAA regulations. 2. LOT COVERAGE: Must provide yards as specified herein, and parking must respect setbacks and other criteria set forth in Figures 2 and 3. If the leased area is less than 15 acres, development shall not exceed 75% of the leased area; and if the leased area is more than 15 acres, development shall not exceed 85% of the leased area. 3. MINIMUM BUILDING SETBACK REQUIREMENTS: All yards will be as required as follows: a. FRONT YARD WITH STREET FRONTAGE: 70 feet from lease line. b. SIDE YARD WITH STREET FRONTAGE: 70 feet from lease line. c. SIDE AND REAR YARD WITHOUT STREET FRONTAGE: 50 feet from lease line. 4. MINIMUM LANDSCAPE REQUIREMENTS WITHIN BUILDING SETBACK: The basic plant materials to provide overall landscape continuity are trees, shrubbery, groundcover, and lawn. As a rule, all trees should be of the minimum size indicated on the Approved Plant List at the time of planting. See Appendix E. The basic lawn plantings will be supplemented by appropriate trees, shrubs, and groundcovers selected from the Approved Plant List also. Plants will be arranged to highlight building entries, soften and provide scale to building masses and site development. Landscape easements may be required of parcels adjacent to the entries to ensure an adequate buffer. a. STREET FRONTAGE: First 25 feet beyond lease line will be a landscaped area along all roadways. b. SIDE AND REAR YARD: First 5 feet along property line will be fully landscaped. If a parking area is located in the side or rear yards, the minimum landscaped area will be 15 feet. No landscaping is required on the taxiway side of a building. c. GREEN SPACE BETWEEN PARKING AND BUILDING: A minimum of 10 feet landscaped area or lawn will be provided on all sides of the building. These areas need not be uniform in shape as long as the required amount of square footage is landscaped. d. PARKING AND DRIVES: With the exception of entrance drives, parking and drives may not be located within any required landscaped areas. -10- Figure 2 Site Development Criteria Plan HNTB Section A-A Buildings in the Airside and Corporate Village Figure 3 Site Development Criteria Plan HNTB e. SIDEWALKS: Sidewalks may be located within landscape area between pavement and building but will not occupy the entire area on any side of a building. f. TRUCK DOCKS AND BUILDING ENTRIES: No landscape area will be required at access points to the building. 5. VEHICULAR AND PEDESTRIAN CIRCULATION: Vehicular and pedestrian circulation within all parcel developments will be designed to function in a safe and efficient manner. The number of vehicular access points per site will be based upon size of development and its relationship to public health, safety, and welfare. In all instances, access points will be kept to a minimum. Curb cuts along the lease line of lots will be at least 200 feet from a street intersection and a minimum of 24 feet wide. Joint cuts may be developed to serve abutting parcels. In addition, multiple entry drives will not be located closer than 150 feet and will be aligned with other drive entries directly across and sharing the same street right-of-way. All distances will be measured from centerline to centerline. All access and entrances must be approved by the Indianapolis Airport Authority. 6. CURBS: All roads provided in the Airside and Corporate Village will have a concrete roll curb and gutter. See Figure 4. Expansion joints will be located along the curbs every 10 feet (+). - It will be the responsibility of the lessee to remove the curbs for their entrance drives at expansion joints to accommodate the drive and necessary turning radii. The lessee will replace the same style of curbs up to these expansion joints. No sawcutting of curbs will be allowed. Proposed entrance drives will match existing road pavement grades, and adequate drainage will be provided by the lessee in this area. 7. PARKING: The overall parking layout will be designed to function in a safe and efficient manner in accordance with the requirements of the Indianapolis Airport Authority. Additional requirements may be added by Indianapolis Airport Authority on a case-by-case basis. The minimum allowable stall dimensions will be 180 square feet, 9 feet by 20 feet, with a minimum auto circulation aisle width of 24 feet adjacent to parking stalls. All parking lot striping and other markings will be white. Landscaped islands will be a minimum of 20 feet wide and provided every 15 parking spaces in an alternating pattern. See Figure 5. Parking islands along the perimeter of the parking lot will be provided every 15 parking spaces. -13- Figure 4 Standard Curb & Gutter Detail HNTB Figure 5 Parking Lot Layout HNTB Figure 6 Standard Handicapped Parking Space HNTB All separator island parking areas and drives must be curbed. Parking space for the physically handicapped will be provided in proximity to building entrances. The parking requirements and related curb cuts and ramps for the physically handicapped will comply with the Indiana Handicapped Accessibility Code. See Figure 6. 8. PAVING: a. Parking lots, drives, roads, and areas of this category as a minimum shall consist of (1) 1" Hot Asphaltic Concrete Surface Type "B" (2) 2" Hot Asphaltic Concrete Binder (3) 4" Hot Asphaltic Concrete Base or (1) 1" Hot Asphaltic Concrete Surface Type "B" (2) 4" Hot Asphaltic Concrete Base (3) 8" Crushed Limestone Base with Prime Coat (4) Will be approved only if proper subgrade drainage is installed b. Service, loading, and all other paving shall consist of Portland cement that complies with the "Standard Specifications for Portland Cement," ASTM Designation C-150 (latest edition), Concrete Aggregates that conform to the "Standard Specifications for Concrete Aggregates", ASTM Designation C-33 (latest revision), Metal Reinforcement that conforms to latest ASTM Specification No. A 615, and water. Any pavement areas which are planned to receive transport aircraft or vehicles shall be designed and constructed in compliance with the Federal Aviation Administration's "Standards for Specifying Construction of Airports," AC 150-5370-10, dated October 24, 1974, and subsequent amendments. All other design criteria (for each project) shall be developed and specified by Authority. 9. LOADING. SERVICE. AND OUTSIDE STORAGE: a. OFF-STREET: Each site development plan will provide sufficient on-site loading facilities to accommodate site activities. All loading movements, including turn-arounds, will be made off the right-of-way. b. VISIBILITY: Loading docks will be located and screened so as to minimize the visibility from any street or building entrance area. Dumpsters, trash receptacles, compactors, condensers, and like items must also be screened. -17- c. SCREENING: Screening of service area dumpsters and like items may consist of an approved combination of architectural elements and materials mounds and landscaping. d. OUTSIDE STORAGE: No materials, supplies, or equipment will be permitted to remain outside any building. e. RUBBISH AND GARBAGE: Rubbish and garbage facilities will be screened so as not to be visible from any street, adjacent lot, or building entrances. 10. SITE GRADING: a. Site grading will be planned to address the following objectives: (1) Satisfactory drainage of open areas. (2) Minimum soil erosion and siltation. b. The following measures are recommended to reduce soil erosion and sediment deposits in downstream areas: (1) Remove no more vegetation than necessary. (2) Install temporary mulching on areas to be left bare of plant material for an extended period of time. (3) Provide de-silting basins to remove sediment from runoff water during development. (4) Straw bales and other erosion control measures must be removed within 12 months of placement. (5) Install permanent landscaping as soon as practical. 11. DRAINAGE AND STORM WATER MANAGEMENT: Development of Airport Authority land is intended to achieve a high degree of water management through the use of internal storm sewers. A drainage plan must be submitted for each site as part of the Preliminary Plan Review Process. The storm water management shall be designed in accordance with 'The Storm Water Management Plan" for Indianapolis International Airport, May 1981, by HNTB and subsequent amendments in accordance with the Department of Public Works, Marion County, Indiana. Swales and storm sewers are constructed to convey the storm runoff to the specified drainage basins. Easements are established to provide access to the drainage basins by all building sites. -18- The major drainage easements are along the access road rights-of-way. The basic concept for individual site design is to provide storm sewers for drainage as opposed to open ditches, with downstrearn sites providing capacity for upstream sites. 12. SITE FURNISHINGS REQUIREMENTS: It is the intent that street furnishings will be coordinated throughout the Airside and Corporate Village. This section establishes the standards for the street furnishings which will include, but not limited to, benches, trash receptacles, planters, drinking fountains, and picnic tables. a. STREET FURNISHINGS STANDARDS AND SELECTIONS: The following are the approved styles and models for street furnishings and site furniture to be used in the Airside and Corporate Village: Architectural Precast, Inc. 2021 Longwood Avenue P.O.Box 23110 Columbus, Ohio 43223 Telephone: (614) 875-0963 (1) BENCHES: Architectural Precast, Inc. Models: BE-8416, BE-72, BE-60, BE4816 Smooth Finish (2) TABLES: Architectural Precast, Inc. Models TA-8433, TA-7233, TA-6033, TA-4833 Smooth Finish (3) TRASH RECEPTACLES: Architectural Precast, Inc. Models: TR-27-RC, TR-22-S, TR-22-RC Smooth Finish (4) TREE GRATES: Neenah R8611 or approved equivalent Indianapolis Airport Authority retains the right to approve location of said furnishings. -19- b. MAINTENANCE: All of the above street or site furnishings will be maintained in a safe and attractive manner so as to preserve the aesthetic qualities established for the Airside and Corporate Village. In the event street or site furnishings are not maintained and become in need of repair, a notice of said disrepair will be delivered to the responsible lessee. If repair is not initiated within seven (7) days, the Indianapolis Airport Authority will undertake repairs at lessee's expense. 13. FENCING: a. SECURITY FENCING: Each development will have security fencing separating the taxiway and aprons from all parking areas, public access areas, and other developments. Security fencing will conform with Federal Aviation Administration "Standards for Specifying Construction of Airports," publication number Ac 150-5370-10, dated October 24, 1974, plus all subsequent amendments. b. ORNAMENTAL FENCING: In addition to security fencing, each development in the corporate village only will provide ornamental fencing as part of its overall development plan. Ornamental fencing will be required along all lease lines where security fencing is not required. Fencing material will be steel, with corrugated poles, manufactured by Fortress Fence Company, or approved equivalent. Minimum fence height will be 6 feet; fence color will be black, brown, or green; painted or polyester coated (see Figures 7 and 8). -20- Figure 7 Fence Detail Map HNTB Figure 8 Fence Gate Details HNTB BUILDING DESIGN 1. INTRODUCTION: All buildings will convey a character of high technology and quality materials. Compliance with this image will be reviewed and approved by the Indianapolis Airport Authority. 2.. DESIGN: a. Ancillary building areas (e.g., office areas, storage buildings, equipment rooms, etc.) will be integrated with the overall building character. There will be no noticeable attachments or appendages to the primary building, with the exception of screen walls for loading docks, dumpsters or ground-mounted mechanical equipment. b. Generally, there shall be no out buildings, with the exception of those requested and approved. c. All screen walls for such items as ground-mounted mechanical equipment, loading docks, dumpsters, etc., will be attached to the building and integrated with the overall building character. d. Building-mounted signage and/or "super graphics" are prohibited in the Corporate Village. Building-mounted signs are permitted in the airside development area, but the surface of any sign shall be limited to 50% or 300 square feet, whichever is less. Reference Signage and Graphic Requirements. e. Site lighting and loading dock lighting, building mounted or otherwise, will be shielded to eliminate glare and spillage. 3. MATERIALS: a. Materials for building facades will be limited in number to three, one of which will be the predominant material. b. Glass will not be used as the predominant exterior wall material on any given structure. c. Glass will be tinted glass with an outdoor reflectance of not more than 20%. -23- d. Exterior building materials not permitted include painted or stained wood, light gauge steel, aluminum or vinyl siding, metal facia or simulated materials such as plastic or metal siding, roofing tiles, or adhesive-applied brick. Preformed steel and aluminum panel systems shall be permitted upon an individual product basis by Indianapolis Airport Authority. Example exterior wall panel systems are: (1) Inryco; PS; M, IW and deep-rib. (2) Bally Engineered Structures; Alply System, Ballywall. (3) Smith Construction Products: Formwall; "V"-Panel; "B"-Panel; Varispan, "D"-Panel Systems. e. All materials used will reflect a high degree of quality, durability, and craftsmanship. f. Building coloration will consist predominantly of a neutral overall color that compliments the building's surroundings. Accent colors are encouraged and will be reviewed by Indianapolis Airport Authority along with the overall building color scheme. 4. ROOF AND ROOF APPURTENANCES: a. Sloping roofs will be screened by flat parapets and sloped to interior drains. Exterior gutters and downspouts will not be permitted except on pitched roofs. b. All roof appurtenances projecting above the roof, such as exhaust fans, heating and air conditioning units, condensers, electrical equipment, plumbing vents and stacks, will be screened from view. Such screening may be achieved by extending exterior walls above the roof to form a parapet or through the use of other opaque walls to be constructed of materials compatible in texture, color, and quality with exterior walls of the building. -24- UTILITY AND SERVICE REQUIREMENTS INTRODUCTION This section will establish the standards pertaining to utilities and services. LOCATION OF LINES AND CONNECTIONS The Indianapolis Airport Authority has or will have installed underground primary feeder lines and other utility lines which the Indianapolis Airport Authority may approve for service. All utility lines will be located underground in a systematic manner. All transformers, air conditioning equipment, meters, and other necessary equipment will be screened from public view. SECURITY Utility lines, connections, and related functions will be designed and constructed with regard to public safety, health, and welfare. MAINTENANCE All of the above utility and service requirements will be maintained in a safe and attractive condition so as to preserve the aesthetic qualities established for the Airside and Corporate Village. In the event utility services are not maintained and become in need of repair, a notice of said disrepair will be delivered to the lessee. If repair is not initiated within seven (7) days, the Indianapolis Airport Authority will undertake repairs at the lessee's expense. -25- SIGNAGE AND GRAPHIC REQUIREMENTS INTRODUCTION This section will establish the guidelines for the design of signage and graphics within the Airside and Corporate Village. In general, signage and graphics will be designed with a total sense of continuity and an additional unifying element within the overall development. Only those signs as addressed within this section will be allowed in the Airside and Corporate Village, unless otherwise approved. No sign will be erected until plans, elevations, sections, details and specifications have been reviewed and approved. 1. OVERALL DESIGN a CONCEPT: All signs in the Airside and Corporate Village will be ASI 1073 or an equivalent. b. MATERIAL: Fiberglass. c. COLOR AND TEXTURE: Dark travertine/white graphics. d. FORM: Signs will be low, with horizontal wording. No vertical signs and no diagonal or vertical wording. e. LIGHTING: Ground-mounted building identification signs shall be internally illuminated. f LANDSCAPING: If any. 2. LOCATION AND CHARACTER: A hierarchy of signs will be established as follows: a. SPECIAL ENTRY SIGNS: These signs will be installed by the Indianapolis Airport Authority and maintained as a part of the common area of the Airside and Corporate Village. b. BUILDING IDENTIFICATION SIGN: Each building in the Corporate Village, assuming one building per parcel, will have one (1) identification sign (see Figure 9). If the building houses several businesses, a building identification sign will be allowed, with additional identification for each business to be considered on an individual basis. Building-mounted signs are permitted in the airside development area, but the surface of any sign shall be limited to 5% or 300 square feet whichever is less. -26- Figure 9 Building Identification Sign HNTB It is recognized that many businesses have their corporate identities expressed in signage and graphics; information allowed on the identification sign will be the name of the business and the identifying corporate symbol and colors. In no case will the corporate identity or logo occupy more than 10% of the total sign area. c. TEMPORARY SIGNS AND LOCATIONS: Each parcel may have one (1) sign designated for leasing or project construction identification, as applicable. d. OTHER SIGNS: Traffic signs such as Stop, One Way, Speed Limit, and other similar signs will be incorporated, designed, and provided by the Indianapolis Airport Authority as a part of the overall signage concept. 3. MANUFACTURING AND INSTALLATION STANDARDS: All signs will be manufactured and installed by competent professionals. Graphics will be accomplished in a professional manner. Under no circumstances will conduits, ballasts, transformers, and manufacturer labels be located within public view. Upon completion of installation, the affected construction site will be restored to a finish condition. 4. MAINTENANCE: All of the above signage requirements will be maintained in a safe and attractive condition so as to preserve the aesthetic qualities established for the Airside and Corporate Village. In the event that signage is not maintained and becomes in need of repair, a notice of said disrepair will be delivered to the lessee. If repair is not initiated within seven (7) days, the Indianapolis Airport Authority will undertake repair at the lessee's expense. -28- SITE LIGHTING REQUIREMENTS INTRODUCTION The following section will provide guidelines in reference to site lighting. The overall use of site lighting will be designed as a unifying and aesthetic element in terms of lighting fixture style and lighting levels. LIGHTING STANDARDS AND SELECTIONS 1. CONCEPT: Site lighting is intended to be low-key. Exterior building lights may be used to accent entrances and special features. Overall high levels of light are not desired; intensity should be no greater than required for automobile and pedestrian safety. To minimize the number of lighting standards, overflow light from inside the building should be used wherever possible. Only discrete floodlighting of buildings will be permitted. All aircraft apron lighting shall be designed and constructed in accordance with the Federal Aviation Administration's "Standards for Specifying Construction of Airports," AC 150-5370-10, dated October 24, 1974, and subsequent amendments. 2. FIXTURES: Fixtures will be a height of 25 feet and located in such a manner as to minimize potential vehicular damage; lighting poles in parking lots will be located within parking medians or islands. The fixture shall be surface mounted to an appropriate concrete base flush with the existing grade. The lighting fixture will be manufactured by "Kim Lighting, Inc.", EKG501, Finish: NA-NE, or equivalent. Lamps will be 250 watt, high pressure sodium. A minimum of one-foot candle will be maintained within parking lots and along pedestrian access ways to building. All other pedestrian circulation lighting will be a minimum of 1/2-foot candle. Pedestrian circulation lighting will use a bollard type light unit (see Figure 10). Signage lighting, when utilized, will be by internal illumination. 3. MAINTENANCE: The site lighting will be maintained in a safe and attractive manner so as to preserve the aesthetic qualities established by the Airside and Corporate Village. In the event site lighting is not maintained and becomes in need of repair, a notice of said disrepair will be delivered to the lessee. If repair is not initiated within seven (7) days, the Indianapolis Airport Authority will undertake repairs at the lessee's expense. -29- Figure 10 Lighted Bollard HNTB Figure 11 Unlighted Bollard HNTB LANDSCAPING REQUIREMENTS INTRODUCTION The following section will provide guidelines for the use of plant materials within the Airside and Corporate Village. 1. DESIGN CONCEPT: The overall intention is the creation of a simple, strong landscape setting, in scale with the large buildings, wide streets and broad parking areas. This result can be achieved through the use of a limited plant palette, with skillfully arranged massing of similar plant materials, especially along street frontages and at vehicular entries. Except within internal courtyards, small scale, residential garden landscaping will not be acceptable. 2. LANDSCAPE CONTINUITY: Because a wide variety in architectural design is permitted, it is necessary that the landscape design approach be consistent in order to maintain overall visual continuity throughout the Airside and Corporate Village. All open unpaved space including, but not limited to, front, side, and rear yard setback areas will be planted and landscaped according to an approved plan. 3. PLANT MATERIAL: The basic plant materials to provide overall landscape continuity are trees, shrubbery, groundcover, and lawn. As a rule, all trees should be of the minimum size indicated on the Approved Plant List at the time of planting. See Appendix E. The basic lawn plantings will be supplemented by appropriate trees, shrubs, and groundcovers selected from the Approved Plant List also. Plants will be arranged to highlight building entries, soften and provide scale to building masses and site development. Landscape easements may be required of parcels adjacent to the entries to ensure an adequate buffer. 4. SHADE TREES: A designated shade tree will be planted at a minimum height and spread of 12 feet by 6 feet, according to the Approved Plant List. 5. INFORMAL TREE MASSING: Trees fronting a drainage basin will be planted informally. The planting scheme will be in a loose arrangement to allow views through them from buildings and roads. See Figure 14. -32- 6. RESPONSIBILITY OF RIGHT-OF-WAY LANDSCAPING: Roadside landscaping from the road to the property lease line will be installed by the Indianapolis Airport Authority and maintained by the lessee. All landscape installation within the individual parcels is the responsibility of the lessee. 7. PARKING AREAS: Parking lot entries consist of single road or divided road driveways. Intended landscape character is shown on Figure 13. The parking lot layout requirement is shown on Figure 12. 8. SIDE YARD LANDSCAPING: Typical side yard landscaping will consist of accent framing or screening, depending on specific circumstances. See Figure 14. Truck access side or rear yard areas will consist of informal tree planting of approved species. A 6-foot screen on the property line is required, through the use of a combination of shrubs of approved species and mounding. See section on Loading, Service and Outside Storage for screening treatments of these areas. 9. LANDSCAPE MOUNDING: Where mounding or earth contouring is required, smooth transitions with soft natural forms are desired. See Figure 15. Trees are not to be planted directly on top of mounds in a formal straight line. 10. SUGGESTED PLANT MATERIALS: To maintain continuity and a sense of order, the Approved Plant List (Appendix D) will comply with the American National Standards Institute (ANSI) Z60.1 Nursery Stock design as established by the American Association of Nurserymen. 11. EDGING: Where mulches abutt grass areas, steel edging or an approved equivalent will be installed in order to maintain a proper materials separation. Plastic or aluminum edging will not be acceptable. 12. LANDSCAPE MAINTENANCE: Lessee will maintain, at lessee's expense, all individual parcels within the Airside and Corporate Village including, but not limited to, irrigation (if applicable), lawn mowing, tree and shrub trimming (including replacement of dead trees or shrubs), fertilization, and weed and insect control. -33- Figure 12 Parking Lot Planting HNTB Figure 13 Parking Lot Island Planting HNTB Figure 14 Sideyard Landscape Treatment HNTB Figure 15 Mounding and Mound Planting HNTB IRRIGATION It is the responsibility of the individual lessee in the Corporate Village to provide irrigation for all planting areas within the leased area. The irrigation system will provide 100% coverage and will use water which will not cause rust staining on paving, walls, etc. In landscape areas adjacent to roadways, it is the responsibility of the lessee to install the sprinkler irrigation and relate it to the adjoining lessee irrigation systems. By doing this, a complete and uniform irrigation system will be installed for the roadways throughout the Corporate Village. -38- OTHER REQUIREMENTS The operation of all ground equipment, mobile or stationary, required for construction, repair, or any other purpose within the limits of the airfield shall be governed as follows: 1. All equipment and materials when not in use or about to be installed shall be left in spaces approved for this purpose by the Executive Director. All equipment on the field, when in use or not in use, shall be properly marked with yellow, or orange and white checkered flags of a size not less than 2 feet square during the day and with amber electric flasher lights at night. No equipment shall be parked within 750 feet of the centerline of any runway or within 250 feet of the centerline of any taxiway, unless specifically authorized by the Executive Director. Equipment parked on the airfield area shall be kept to an absolute minimum and restricted to equipment actually used in the work under progress. 2. Nothing shall be placed on the airfield without the permission of the Executive Director. 3. Parking areas for Contractor equipment, supplies, materials, and employee vehicles will be as established by the Executive Director or as indicated on the plans. 4. Neither equipment nor personnel shall use any runway, taxiway, or apron for the purpose of hauling materials or access to the work, unless approved by the Executive Director. Authorized equipment operating on any hard surfaces is limited to that equipment with pneumatic tires. Prior to use of any hard surface, permission shall be obtained from the Executive Director. All drivers shall be instructed to be alert for aircraft and to follow routes designated for vehicular traffic. All vehicles will be clearly marked to identify owner. No privately-owned vehicle will be operated on runway or taxiways. 5. Prior to initiation of operations which will require the crossing of any hard surface used by aircraft, the Contractor shall assure himself that a signalman, with visual or radio contact with the air traffic control tower, is on duty at the site of the crossing to regulate traffic. Moving aircraft have priority over all other traffic on the field. Only equipment equipped with pneumatic tires shall be allowed to cross paved areas. It shall be the responsibility of the Contractor to keep paved surfaces free of any material at all times that might drop from moving vehicles while crossing paved areas. 6. Contractor shall conform to the requirements of the Executive Director as to the placement, type and service of special barricades, obstruction and hazard making and lighting devices used to identify danger areas to aircraft. -39- 7. Hauling across clear zones of any runway will not be permitted, unless authorized by the Executive Director. 8. Contractor must agree to permit only his bona fide employees and those of his subcontractors access and use of the airfield during actual hours of work. The lessee shall require lessee's contractor's doing work on airport to have the following insurance coverage: CONTRACTOR'S LIABILlTY INSURANCE A. Lessee shall demand that each Contractor shall take out and maintain insurance of such types and in such amounts as are necessary to cover his responsibilities and liabilities on all projects, and shall require all his subcontractors to carry similar insurance. (1) The Airport Authority will accept, in lieu of all subcontractors carrying similar insurance, an "Owner's and Contractor's Protective Liability Policy" paid for by the Contractor and written in the name of the Airport Authority for the amounts specified hereinafter including all the special coverages. Said policy must protect the Airport Authority for all claims for bodily injury and/or property damage arising out of operations for the named insured by said Contractor, or any subcontractor of said Contractor. B. No Contractor or Subcontractor shall commence work under this contract until he has obtained all insurance required under this Section and such insurance has been approved by the Airport Authority. C. Each Contractor shall file, with the Airport Authority and Architect, a Certificate of Insurance. Any certificate submitted and found to be altered or incomplete will be returned as unsatisfactory. D. If requested by the Airport Authority, Contractor shall furnish the Airport Authority with true copies of each policy required of him or his subcontractors. Said policies will not be canceled or materially altered, except after ten (10) days advance written notice to the Airport Authority and Architect, mailed to the addresses indicated herein. E. Insurance under this Section, as a minimum, shall include the following coverages: -40- (1) Workers' Compensation and Employer's Liability Insurance: a. The Contractor agrees to procure and maintain at its expense, insurance of the kind and in the amount hereinafter provided, by companies authorized to do such business in the State of Indiana, covering all operations under this Contract whether performed by them or by an approved Subcontractor. Before commencing the work, the Contractor shall furnish to the Airport Authority a certificate, or certificates, in a form satisfactory to the Airport Authority, showing that they have complied with this paragraph, which certificate, or certificates, shall designate the Airport Authority as an additional named insured. b. The kinds of amounts of insurance required as follows: Policy covering the obligations of the Contractor in accordance with the provisions of Indiana's Workers' Compensation Law. (2) Comprehensive General Liability Insurance covering: Policies of bodily injury, liability and property damage liability insurance, of the types hereinafter specified, each with limits of liability of not less than $500,000.00 for all damages arising out of bodily injury, including death, at any time resulting therefrom sustained by one person in any one accident, and not less than $500,000.00 for all damages arising out of injury to or destruction of property. The required types of coverages are listed below commencing with (a). Umbrella liability coverage with the limit of $5,000,000.00 at Indianapolis International and $2,000,000.00 at the Satellite Airports and Heliport. (a) Operations -- Premises Liability: including, but not limited to, Bodily Injury, including death at any time resulting therefrom, to any person or Property Damage resulting from execution of the work provided for in this contract, or due to or arising in any manner from any act or omission or negligence of the Contractor and any Subcontractor, their respective employees or agents. -41- (b) Elevator Liability: including, but not limited to, Bodily Injury, including death at any time resulting therefrom, to any person or Property Damage resulting from operation or use of any elevator or hoist, if either or both are operated or used in connection with execution of this contract. (c) Contractor's Protective Liability: including, but not limited to, Bodily Injury, including death at any time resulting therefrom, to any person or Property Damage arising from acts or omissions of any subcontractor, their employees or agents. (d) Products: including, but not limited to, Bodily Injury, including death at any time resulting therefrom to any person or Property Damage because of goods, products, materials, or equipment used or installed under this contract. (e) Contractual Liability: Each and every policy for liability insurance, carried by each Contractor and Subcontractor, as required by this Section shall specifically include Contractual Liability coverage with respect to Section F of this Division. (f) Special Requirements: The insurance required under paragraph (2) of this Section shall specifically include the following special hazards: Property Damage caused by conditions otherwise subject to exclusions "x,c,u" Explosion, Collapse, or Underground Damage. Broad Form Property Damage endorsement which has reference to property in the "care, custody, or control" of the insured. "Occurrence" Bodily Injury coverage in lieu of "caused by accident". "Occurrence" Property Damage coverage in lieu of "caused by accident". -42- (3) Comprehensive Automobile Liability covering: (a) All owned, hired, or non-owned vehicles including the loading or unloading thereof. (b) Special Requirements: The insurance required under paragraph (3) of this Section shall specifically include the following special hazards: "Occurrence" Bodily Injury in lieu of "caused by accident". "Occurrence" Property Damage in lieu of "caused by accident". (c) The insurance under paragraph (3) of this Section shall be written in the following limits of liability as a minimum: Automobile Bodily Injury Each Person $500,000.00 Each Occurrence $1,000,000.00 Automobile Property Damage Each Occurrence $250,000.00 F. Responsibilities for Claims and Liabilities: (1) The Contractor shall be responsible for all damage to life and property due to negligent activities of the Contractor, approved subcontractors, agents, or employees in connection with such services, and shall be responsible for all parts of their work, both temporary and permanent. (2) It is expressly understood the Contractor shall indemnify and save harmless the Airport Authority from all claims, suits, actions, damages, defense costs, including attorney's fees, and all other costs of every name and description arising out of or resulting from the negligent services of the Contractor under this Contract and such indemnity shall not be limited by reason of the enumeration of any insurance coverage hereinafter provided. -43- APPENDIX STRUCTURAL & IMPROVEMENT LOCATION Appendix A PERMIT APPLICATION A. LOCATION OF IMPROVEMENT AIRPORT Indianapolis International Mt. Comfort Eagle Creek Metropolitan Speedway Heliport ADDRESS OF _________________________________________________________________ IMPROVEMENT Number Street City Zip Code B. AIRPORT TENANT INFORMATION NAME _________________________________________________________________ Lessee that has agreement with Airport Authority ADDRESS _________________________________________________________________ Number Street City Zip Code LEASE DATE ________________________ Telephone # of Lessee ________________ USE Is the proposed improvement permitted: 1. In the designated area of the airport layout plan? _______ _______ YES NO 2. In the Lease Agreement cited above? _______ _______ YES NO COST Estimated cost of improvements $ ______________________________________ THE LESSEE HAS AUTHORIZED THE UNDERSIGNED TO SECURE THE IMPROVEMENT LOCATION PERMIT. INFORMATION CONTAINED ON THIS FORM AND ON THE SECURED PLOT PLAN IS COMPLETE AND ACCURATE. I UNDERSTAND THAT APPROVAL OF A PERMIT GRANTED UNDER THIS FORM DOES NOT ALLEVIATE THE NEED TO COMPLY WITH APPLICABLE TERMS AND CONDITIONS OF THE LEASE AGREEMENT DATED ABOVE, INCLUDING SUBMITTAL FOR APPROVAL BY THE BOARD OF FINAL PLANS AND SPECIFICATIONS FOR THIS IMPROVEMENT, AND OBTAINING THE APPLICABLE PERMITS OR APPROVALS REQUIRED BY CITY/COUNTY ORDINANCES OR STATE LAW. ___________________________________ Lessee ___________________________________ Title ___________________________________ Phone Number ------- AIRPORT USE ONLY BELOW THIS LINE ------- C. IAA Permit # ______________________________ (1) DOT Driveway Permit # ______________________________ (1) DPW (Drainage) Permit # ______________________________ County Permit # ______________________________ State Building Commission Approval ______________________________ Sewer __________________Septic System ______________________________ APPROVED WAIVED(2) Proposed use ____________________________ _____________ _____________ Building and right-of-way setbacks _____________ _____________ Maximum height ______________________MSL _____________ _____________ Lease area __________________ sq. ft. _____________ _____________ Developed area sq. ft. _______ % _____________ _____________ Drainage & Sediment Control Plan 24-1800 _____________ _____________ Utility locations and connections _____________ _____________ Security Plan _____________ _____________ Site Plan and Survey _____________ _____________ Sign location and size _____________ _____________ FAA Notice of Construction (Form 7460) _____________ _____________ Remarks: ______________________________________________________________________ ________________________________________________________________________________ APPROVED ___________________________________ Date _____________________________________________ Daniel C. Orcutt, Executive Director (1) Manon County only (2) List separately reasons and date Board waiver given. A-1 Appendix B INDIANAPOLIS AIRPORT AUTHORITY REQUEST FOR WORK PERMIT DATE_______________________ DATE: _____________ ORGANIZATION REQUESTING PERMIT:_________________________________________________ ADDRESS:______________________________________________PHONE:____________________ PERSON REQUESTING PERMIT:_____________________________PHONE:____________________ ADDRESS (if different from above):______________________________________________ LOCATION OF PROPOSED WORK:______________________________________________________ ________________________________________________________________________________ DESCRIPTION OF PROPOSED WORK ___________________________________________________ ________________________________________________________________________________ ________________________________________ESTIMATED COST:$________________________ CONTRACTOR/VENDOR:____________________________________PHONE:____________________ ADDRESS:______________________________________________PHONE:____________________ PROPOSED START DATE:__________________ESTIMATED COMPLETION DATE:________________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FOR IAA USE PLANS SUBMITTED:_________________ PROOF OF INSURANCE SUBMITTED:_______________ SPECS SUBMITTED:_________________ OTHER:______________________________________ APPROVED DISAPPROVED DATE EXECUTIVE DIRECTOR: __________ ____________ _________ MANAGING DIRECTOR ADMINISTRATION: __________ ____________ _________ MANAGING DIRECTOR OPERATIONS: __________ ____________ _________ DIRECTOR PLANNING & DEVELOPMENT: __________ ____________ _________ DIRECTOR BUILDING OPERATIONS: __________ ____________ _________ DIRECTOR AIRFIELD MAINTENANCE: __________ ____________ _________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- AUTHORIZATION APPROVED:_____RESUBMIT AS DIRECTED:_____DENIED:_____PERMIT NO:__________________ SIGNED:_______________________________________DATE:_____________________________ cfc: blue; file; pink; applicant; B-1 Exhibit C Before completing this form it is recommended that the following excerpts from the Federal Aviation Regulations, Part 77, Subchapter B Below be reviewed. USE BACK OF THIS SHEET AS WORKSHEET NOTICE OF PROPOSED CONSTRUCTION OR ALTERATION SECTION 77.13 CONSTRUCTION OR ALTERATION REQUIRING NOTICE. (a) Except as provided in Section 77.15, each sponsor who proposes any of the following construction or alteration shall notify the Administrator in the form and manner prescribed in Section 77.17. (1) Any construction or alteration of more than 200 feet in height above the ground level at its site. (2) Any construction or alteration of greater height than an imaginary surface extending outward and upward at one of the following slopes: (i) 100 to 1 for a horizontal distance of 20,000 feet from the nearest point of the nearest runway of each airport specified in subparagraph (5) of this paragraph with at least one runway more than 3,200 feet in actual length, excluding heliports. (ii) 50 to 1 for a horizontal distance of 10,000 feet from the nearest point of the nearest runway of each airport specified in subparagraph (5) of this paragraph with its longest runway no more than 3,200 feet in actual length, excluding heliports. (iii) 25 to 1 for a horizontal distance of 5,000 feet from the nearest point of the nearest landing and takeoff area of each heliport specified in subparagraph (5) of this paragraph. (3) Any highway, railroad, or other traverse way for mobile objects, of a height which, if adjusted upward 17 feet for an Interstate Highway that is part of the National System of Military and Interstate Highways where overcrossings are designed for a minimum of 17 feet vertical distance, 15 feet for any other public roadway, 10 feet or the height of the highest mobile object that would normally traverse the road, whichever is greater, for a private road, 23 feet for a railroad, and for a waterway or any other traverse way not previously mentioned, an amount equal to the height of the highest mobile object that would normally traverse it, would exceed a standard of subparagraph (1) or (2) of this paragraph. (4) When requested by the FAA, any construction or alteration that would be in an instrument approach area (defined in the FAA standards governing instrument approach procedures) and available indicates it might exceed a standard of Subpart C of this part. C-1 (5) Any construction or alteration on any of the following airports (including heliports): (i) An airport that is available for public use and is listed in the Airport Directory of the current Airman's Information Manual or in either the Alaska or Pacific Airman's Guide and Chart Supplement. (ii) An airport under construction, that is the subject of a notice or proposal on file with the Federal Aviation Administration, and except for military airports, it is clearly indicated that airport will be available for public use. (iii) An airport that is operated by an armed force of the United States. (b) Each sponsor who proposes construction or alteration that is the subject of a notice under paragraph (a) of this section and is advised by an FAA regional office that a supplemental notice is required shall submit that notice on a prescribed form to be received by the FAA regional office at least 48 hours before the start of the construction or alteration. (c) Each sponsor who undertakes construction or alteration that is the subject of a notice under paragraph (a) of this section shall, within 5 days after that construction or alteration reaches its greatest height, submit a supplemental notice on a prescribed form to the FAA regional office having jurisdiction over the area involved if ___ (1) The construction or alteration is more than 200 feet above the surface level of its site; or (2) An FAA regional office advises him that submission of the form is required. SECTION 77.15 CONSTRUCTION OR ALTERATION NOT REQUIRING NOTICE. No person is required to notify the Administrator for any of the following construction or alteration: (a) Any object that would be shielded by existing structures of a permanent and substantial character or by natural terrain or topographic features of equal or greater height, and would be located in the congested area of a city, town or settlement where it is evident beyond all reasonable doubt that the structure so shielded will not adversely affect safety in air navigation. (b) Any antenna structure of 20 feet or less in height except one that would increase the height of another antenna structure. (c) Any air navigation facility, airport visual approach or landing and, aircraft arresting device, or meteorological device, of a type approved by the Administrator, or an appropriate military service on military airports, the location and height of which is fixed by its functional purpose. (d) Any construction or alteration for which notice is required by any other FAA regulation. C-2 SECTION 77.17 FORM AND TIME OF NOTICE. (a) Each person who is required to notify the Administrator under Section 77.13 (a) shall send one executed form set of FAA Form 7460-1, Notice of Proposed Construction or Alteration, to the Manager, Air Traffic Division, FAA Regional Office having jurisdiction over the area within which the construction or alteration will be located. Copies of FAA Form 7460-1 may be obtained from the headquarters of the Federal Aviation Administration and the regional offices. (b) The notice required under Section 77.13(a)(1) through (4) must be submitted at least 30 days before the earlier of the following dates ___ (1) The date the proposed construction or alteration is to begin. (2) The date an application for a construction permit is to be filed. However, a notice relating to proposed construction or alteration that is subject to the licensing requirements of the Federal Communications Act may be sent to the FAA at the same time the application for construction is filed with the Federal Communications Commission, or at any time before that filing. (c) A proposed structure of an alteration to an existing structure that exceeds 2,000 feet in height above the ground will be presumed to be a hazard to air navigation and to result in an inefficient utilization of airspace and the applicant has the burden of overcoming that presumption. Each notice submitted under the pertinent provisions of Part 77 proposing a structure in excess of 2,000 feet above ground, or an alteration that will make an existing structure exceed that height must contain a detailed showing directed to meeting this burden. Only in exceptional cases, where the FAA concludes that a clear and compelling showing has been made that it would not result in an inefficient utilization of the airspace and would not result in a hazard to air navigation, will a determination of no hazard be issued. (d) In the case of an emergency involving essential public services, public health, or public safety, that requires immediate construction or alteration, the 30 day requirement in paragraph (b) of this section does not apply and the notice may be sent by telephone, telegraph, or other expeditious means, with an executed FAA Form 7460-1 submitted within five days thereafter. Outside normal business hours, emergency notices by telephone or telegraph may be submitted to the nearest FAA Flight Service Station. (e) Each person who is required to notify the Administrator by paragraph (b) or (c) of Section 77.13, or both, shall send an executed copy of FAA Form 7460-2. Notice of Actual Construction or Alteration, to the Manager Air Traffic Division, FAA Regional Office having jurisdiction over the area involved. C-3 ADDRESSES OF THE REGIONAL AND SAN JUAN OFFICES Alaska Region Central Region AK NE, IA, MO, KS ------------------------------- ----------------------------- Alaskan Regional Office Central Regional Office Air Traffic Division AAL-530 Air Traffic Division ACE-530 701 "C" Street 601 East 12th Street Anchorage, AK 99513 Kansas City, MO 64106 Mail Address: Tel. 816-374-3408 701 "C" Street, Box 14 Anchorage, AK 99513 Tel. 907-271-5892 Northwest Mountain Region Eastern Region WA, OR, MT, ID, WY, UT, CO NY, PA, WV, VA, DC, MD, DE, NJ ------------------------------- ----------------------------- Northwest Mountain Regional Office Eastern Regional Office Air Traffic Division ANM-530 Air Traffic Division AEA-530 17900 Pacific Hwy. South JFK International Airport C-68968 Fitzgerald Federal Building Seattle, WA 98168 Jamaica, NY 11430 Tel. 206-431-2530 Tel. 718-917-1228 Great Lakes Region New England Region ND, WI, MI, SD, IL, OH, MN, IN MA, NH, VT, RI, CT, ME ------------------------------- ----------------------------- Great Lakes Regional Office New England Regional Office Air Traffic Division AGL-530 Air Traffic Division ANE-530 2300 East Devon Avenue 12 New England Executive Park Des Plaines, IL 60018 Burlington, MA 01803 Tel. 312-694-7458 Tel. 617-273-7141 C-4 Western-Pacific Region Southern Region HI, CA, NV, AZ, GU KY, TN, NC, SC, GA, AL, MS, FL ------------------------------- ------------------------------ Western-Pacific Regional Office Southern Regional Office Air Traffic Division AWP-530 Air Traffic Division ASO-530 15000 Aviation Boulevard 3400 Norman Berry Drive Hawthorne, CA 90260 East Point, GA 30344 Mail Address: Mail Address: AWP-530 P. O. Box 20636 P. O. Box 92007 Atlanta, GA 30320 Worldly Postal Center Tel. 404-763-7646 Los Angeles, CA 90009 Tel. 213-297-1182 Southwest Region San Juan Office NM, TX, OK, AR, LA VI, PR ------------------------------- ----------------------------- Southwest Regional Office DOT/FAA Air Traffic Division ASW-530 San Juan CERAP 4400 Blue Mound Road ATTN: ML & SO Fort Worth, TX 76106 GOP Section Mail Address: San Juan, PR 00936 P. O. Box 1689 Tel. 809-791-1615 Fort Worth, TX 76101 Tel. 817-877-2640 C-5 Appendix C DO NOT REMOVE CARBONS FORM APPROVED OMB NO. 2120-0001 - -------------------------------------------------------------------------------- Aeronautical Study Number NOTICE OF PROPOSED CONSTRUCTION OR ALTERATION U.S. Department of Transportation Federal Aviation Administration
________________________________________________________________________________________________________________________________ 1. NATURE OF PROPOSAL 2. COMPLETE DESCRIPTION OF STRUCTURE ________________________________________________________________________________________________________________________________ A. Type B. Class C. Work Schedules Dates A. Include effective radiated power and assigned frequency of __ New Construction __ Permanent Beginning ____________ all existing, proposed or modified AM, FM, or TV __ Alteration __ Temporary End________________ broadcast stations utilizing this structure. (Duration ___ months) B. Include size and configuration of power transmission lines and their supporting towers in the vicinity of FAA facilities and public airports. 3A. NAME AND ADDRESS OF INDIVIDUAL, COMPANY, CORPORATION, C. Include information showing site orientation, dimen- ETC. PROPOSING THE CONSTRUCTION OR ALTERATION. (NUMBER, sions, and construction materials of the proposed STREET, CITY, STATE AND ZIP CODE) structure. ( ) _____________________ AREA CODE TELEPHONE NUMBER -------- -------- | | | | | | | | | | -------- -------- (IF MORE SPACE IS REQUIRED, CONTINUE ON A SEPARATE SHEET.) B. Name, address and telephone number of proponent's representative if different than 3 above. ________________________________________________________________________________________________________________________________ 4. LOCATION OF STRUCTURE 5. HEIGHT AND ELEVATION (COMPLETE TO NEAREST FOOT) A. Coordinates B. Nearest City or Town C. Name of nearest airport, A. Elevation of site above mean sea (TO NEAREST SECOND) and State heliport, flightpark, or sea- level. plane base. ____________________ _____________________ __________________________ ______________________________________ Degrees ' " (1) Distance to 4B (1) Distance from structure B. Height of Structure including all ________ ____ ____ ____________ Miles to nearest point of nearest appurtenances and lighting (if any) Latitude runway. above ground, or water if so situated. ________________________ ______________________________________ (2) Direction to 4B (2) Direction from structure to C. Overall height above mean sea level Degrees ' " airport. (A + B) ________ ____ ____ _____________________ ________________________ ______________________________________ Longitude
C-6 - -------------------------------------------------------------------------------- D. Description of location of site with respect to highways, streets, airports, prominent terrain features, existing structures, etc. Attach a U.S. Geological Survey quadrangle map or equivalent showing the relationship of construction site to nearest airport(s). (IF MORE SPACE IS REQUIRED, CONTINUE ON A SEPARATE SHEET OF PAPER AND ATTACH TO THIS NOTICE). - -------------------------------------------------------------------------------- NOTICE IS REQUIRED BY PART 77 OF THE FEDERAL AVIATION REGULATIONS (14 C.F.R. PART 77) PURSUANT TO SECTION 1101 OF THE FEDERAL AVIATION ACT OF 1958, AS AMENDED (49 U.S.C. 1101). PERSONS WHO KNOWINGLY AND WILLINGLY VIOLATE THE NOTICE REQUIREMENTS OF PART 77 ARE SUBJECT TO A FINE (CRIMINAL PENALTY) OF NOT MORE THAN $500 FOR THE FIRST OFFENSE AND NOT MORE THAN $2,000 FOR SUBSEQUENT OFFENSES, PURSUANT TO SECTION 902(A) OF THE FEDERAL AVIATION ACT OF 1958, AS AMENDED [49 U.S.C. 1472(A)]. - -------------------------------------------------------------------------------- I HEREBY CERTIFY that all of the above statements made by me are true, complete, and correct to the best of my knowledge. In addition, I agree to obstruction mark and/or light the structure in accordance with established marking & lighting standards if necessary. - -------------------------------------------------------------------------------- Date Typed Name/Title of Person Filing Notice Signature - -------------------------------------------------------------------------------- FOR FAA USE ONLY - -------------------------------------------------------------------------------- THE PROPOSAL ___ Does not require a notice to FAA ___ Is not identified as an obstruction under any standard of FAR Part 77 Subpart C and would not be a hazard for air navigation. ___ Is identified as an obstruction under the standards of FAR Part 77 Subpart C, but would not be a hazard to air navigation. ___ Should be obstruction marked and lighted per FAA Advisory Circular 707460-1, Chapter(s) __________. ___ Obstruction marking and lighting are not necessary. Supplemental Notice of Construction FAA Form 7460-2 is required any time the project is abandoned for: ___ At least 8 hours before the start of construction ___ Within five days after the construction reaches its greatest height. This determination expires on ___________________________________ unless: (a) amended, revised or terminated by the issuing office; (b) the construction is subject to the licensing authority of the Federal Communication and application for a construction permit is made to the FCC on or before the above expiration date. In such case, the determination expires on the date prescribed by the FCC for completion of construction on the date the FCC denies the application. C-7 NOTE: Request for extension of the effective period of this determination must be postmarked or delivered to issuing office at _____???________ to the expiration date. If the structure is subject to the licensing authority of the FCC, a copy of this determination will be sent to this Agency. REMARKS: C-8 THIS IS YOUR WORKSHEET FORM APPROVED OMB NO. 2120-0001 - -------------------------------------------------------------------------------- Aeronautical Study Number NOTICE OF PROPOSED CONSTRUCTION OR ALTERATION U.S. Department of Transportation Federal Aviation Administration
________________________________________________________________________________________________________________________________ 1. NATURE OF PROPOSAL 2. COMPLETE DESCRIPTION OF STRUCTURE ________________________________________________________________________________________________________________________________ A. Type B. Class C. Work Schedules Dates A. Include effective radiated power and assigned frequency of __ New Construction __ Permanent Beginning ____________ all existing, proposed or modified AM, FM, or TV __ Alteration __ Temporary End________________ broadcast stations utilizing this structure. (Duration ___ months) B. Include size and configuration of power transmission lines and their supporting towers in the vicinity of FAA facilities and public airports. 3A. NAME AND ADDRESS OF INDIVIDUAL, COMPANY, CORPORATION, C. Include information showing site orientation, dimen- ETC. PROPOSING THE CONSTRUCTION OR ALTERATION. (NUMBER, sions, and construction materials of the proposed STREET, CITY, STATE AND ZIP CODE) structure. ( ) _____________________ AREA CODE TELEPHONE NUMBER -------- -------- | | | | | | | | | | -------- -------- (IF MORE SPACE IS REQUIRED, CONTINUE ON A SEPARATE SHEET.) B. Name, address and telephone number of proponent's representative if different than 3 above. ________________________________________________________________________________________________________________________________ 4. LOCATION OF STRUCTURE 5. HEIGHT AND ELEVATION (COMPLETE TO NEAREST FOOT) A. Coordinates B. Nearest City or Town C. Name of nearest airport, A. Elevation of site above mean sea (TO NEAREST SECOND) and State heliport, flightpark, or sea- level. plane base. ____________________ _____________________ __________________________ ______________________________________ Degrees ' " (1) Distance to 4B (1) Distance from structure B. Height of Structure including all ________ ____ ____ ____________ Miles to nearest point of nearest appurtenances and lighting (if any) Latitude runway. above ground, or water if so situated. ________________________ ______________________________________ (2) Direction to 4B (2) Direction from structure to C. Overall height above mean sea level Degrees ' " airport. (A + B) ________ ____ ____ _____________________ ________________________ ______________________________________ Longitude
C-9 - -------------------------------------------------------------------------------- D. Description of location of site with respect to highways, streets, airports, prominent terrain features, existing structures, etc. Attach a U.S. Geological Survey quadrangle map or equivalent showing the relationship of construction site to nearest airport(s). (IF MORE SPACE IS REQUIRED, CONTINUE ON A SEPARATE SHEET OF PAPER AND ATTACH TO THIS NOTICE). - -------------------------------------------------------------------------------- NOTICE IS REQUIRED BY PART 77 OF THE FEDERAL AVIATION REGULATIONS (14 C.F.R. PART 77) PURSUANT TO SECTION 1101 OF THE FEDERAL AVIATION ACT OF 1958, AS AMENDED (49 U.S.C. 1101). PERSONS WHO KNOWINGLY AND WILLINGLY VIOLATE THE NOTICE REQUIREMENTS OF PART 77 ARE SUBJECT TO A FINE (CRIMINAL PENALTY) OF NOT MORE THAN $500 FOR THE FIRST OFFENSE AND NOT MORE THAN $2,000 FOR SUBSEQUENT OFFENSES, PURSUANT TO SECTION 902(A) OF THE FEDERAL AVIATION ACT OF 1958, AS AMENDED [49 U.S.C. 1472(A)]. - -------------------------------------------------------------------------------- I HEREBY CERTIFY that all of the above statements made by me are true, complete, and correct to the best of my knowledge. In addition, I agree to obstruction mark and/or light the structure in accordance with established marking & lighting standards if necessary. - -------------------------------------------------------------------------------- Date Typed Name/Title of Person Filing Notice Signature ---------------------------------------------------------------- NOTICE TO PREPARER OF FORM ------------------------------------------------------- 1. Retain this Work Sheet as your copy. 2. Complete and return the remaining copies. Do not remove carbons. 3. Be sure all copies are legible. 4. Print or type all items. The address area will be used to return a copy of this form. (see above) 5. Notification to the FAA does not waive the requirements of any other Government Agency. 6. FAA will acknowledge this notice within approximately 30 days of its receipt. ________________________________________________________________________________ AA Form 7460-1 (8-85) THIS IS YOUR WORKSHEET C-10 13714.MEM2 Appendix D METROPOLITAN PLAN COMMISSION DOCKET NO. 61-AO-4 ORDINANCE BE IT ORDAINED by the Marion County Council of Marion County, Indiana, that Marion County Council Ordinance No. 8-1957, adopted by The Marion County Council on March 28,1957, and subsequently amended pursuant to Section 85 of Chapter 283 of the Acts of the Indiana General Assembly for 1955, as amended, and all zoning ordinances adopted as parts thereof, be amended by the addition of the following zoning district: SECTION 1.00 ESTABLISHMENT OF AIRPORT SPECIAL USE DISTRICT AIRPORT SPECIAL USE DISTRICT, which primary zoning district shall permit the following uses: PUBLIC AIRPORTS municipally owned or operated, including all necessary navigation and flight operation facilities, and accessory uses including, but not limited to, terminal, storage and servicing facilities for airplanes or other aircraft, air research laboratories and other accessory uses directly related to the operation of such airport and an integral part thereof, including, but not limited to, transportation, restaurant, hotel or motel facilities and similar related services for the comfort and accommodation of air passengers and the public; - subject to the following requirements: SECTION 2.00 AIRPORT SPECIAL USE DISTRICT REGULATIONS 1. No use permitted in the AIRPORT SPECIAL USE DISTRICT shall cause injury or damage - to adjacent land uses, property or the public health, safety or welfare. Provided, however, that compliance by such public airport with all applicable safety and operational standards and regulations of the Federal Aviation Agency and other applicable federal aviation regulatory authorities shall be deemed compliance with this sub-section's requirements, as applied to navigation and flight operational uses. 2. All uses within the AIRPORT SPECIAL USE DISTRICT shall be served by and have access only from interior access roads located within said DISTRICT to carry vehicular traffic to and from major entrances and exits serving the airport, and designed and constructed in accordance with local street specifications of the Subdivision Control Ordinance of Marion County, Indiana, Ordinance 58-AO-13, as amended. 3. For each use permitted within the AIRPORT SPECIAL USE DISTRICT, adequate off-street parking area with concrete or bituminous paved surface shall be provided. Such parking area shall not be located within one hundred (100) feet of any boundary of the Al AIRPORT SPECIAL USE DISTRICT, unless a compact hedge or row of shrubbery of at least four (4) feet in height is provided between such parking area and District boundary. In no case shall such parking area be located closer to a District boundary than ten (10) feet. 4. No building or structure, or part thereof, shall be located within one hundred (100) feet of any boundary of the AIRPORT SPECIAL USE DISTRICT, and such one hundred (100) foot buffer area shall be maintained in turf, plant material or as off-street parking area, as provided in sub-section (3) above. 5. Prior to improvement location permit issuance for any building or structure within the AIRPORT SPECIAL USE DISTRICT, the plot or site plan for such building or structure, in conformity with all applicable zoning requirements, shall be filed with the Metropolitan Planning Department of Marion County, Indiana. SECTION 3.00 ZONING MAPS DESIGNATION BE IT FURTHER ORDAINED that all land within said district snail be designated upon the applicable zoning maps (adopted as a part of said zoning ordinances and Ordinance No. 8-1957) by the symbol "A" superimposed in the approximate geographic center of such district, the boundaries of which district to be designated and outlined by a dashed line. BE IT FURTHER ORDAINED that an emergency exists for the passage of this ordinance, and that the same shall be in full force and effect from and after this date. Beurt R. SerVaas ----------------------------------- Ronald E. Bingman ----------------------------------- Wm. A. Brown ----------------------------------- H. Norris Cottingham ----------------------------------- James A. Buck ----------------------------------- Edwin J. Koch ----------------------------------- THE MARION C0UNTY COUNCIL OF MARION COUNTY, INDIANA Date: January 7, 1963 ----------------------------------------------- Attest: John T. Sutton by Charlotte Newman, Deputy --------------------------------------------- AUDITOR OF MARION COUNTY, INDIANA Appendix E APPROVED PLANT LIST BOTANICAL NAME COMMON NAME SIZE ___________________________________________________________________________ SHADE TREES: Acer platanoides Norway Maple 2-1/2" - 3" Acer rubrum Red Maple 2-1/2" - 3" Acer saccharum Sugar Maple 2-1/2" - 3" Fraxinus pennsylvanica Green Ash 2-1/2" - 3" Celtis occidentalis Hackberry 2-1/2" - 3" Liquidambar styraciflua Sweet Gum 2-1/2" - 3" Platanus occidentalis American Sycamore 2-1/2" - 3" Quercus alba White Oak 2-1/2" - 3" Quercus imbricaria Shingle Oak 2-1/2" - 3" Gleditsia triacanthos Honey Locust 2-1/2" - 3" ORNAMENTAL TREES: Acer ginnala Amur Maple 8' Ht. Acer griseum Paperbark Maple 8' Ht. Acer palmatum Japanese Maple 5' Ht. Acer tataricum Tatarian Maple 8' Ht. Cornus florida Flowering Dogwood 6' Ht. Crataegus phaenopyrum Washington Hawthorne 1-1/2" Cal. Magnolia ~ soulangiana Sancer MagnoLia 6' Ht. MagnoLia stellata Star MagnoLia 6' Ht. Malus floribunda Japanese Flowering Crabapple 6' Ht. Malus sargentii Sargent Crabapple 1-1/2" Cal. Malus x zumi Zumi Crabapple 1-1/2" Cal. Pyrus calleryana `Redspire' Redspire Pear 1-3/4" Cal. EVERGREEN TREES: Abies concolor White Fir 6' - 8' Ht. Picea abies Norway Spruce 6' - 8' Ht. Picea pungens Colorado Spruce 6' - 8' Ht. Pinus densiflora Japanese Red Pine 6' - 8' Ht. Pinus nigra Black Pine 6' - 8' Ht. Pinus resinosa Red Pine 6' - 8' Ht. Pinus strobus Eastern White Pine 6' - 8' Ht. Pinus sylvestris Scots Pine 6' - 8' Ht. E-1 BOTANICAL NAME COMMON NAME SIZE ___________________________________________________________________________ SHRUBS: Calycanthus floridus Carolina Allspice 18"-24" Cotoneaster apiculata Cranberry Cotoneaster 18"-24" Cotoneaster divaricata Spreading Cotoneaster 18"-24" Euonyrnus alata Burning Bush 18"-24" Juniperus chinensis Chinese Juniper 15" Juniperus horizontalis Creeping Juniper 12" Rhododendron catawbiense Catawba Rhododendron 18"-24" Spirea x bumalda Bumalda Spirea 18"-24" Taxus x media Intermediate Yew 18"-24" Viburnum x burkwoodii Burkwood Viburnum 30" Viburnum carlesii Korean Spice Viburnum 18"-24" Viburnum dentatum Arrowwood 30" Viburnum lantana Wayfaring Tree 30" Viburnum opulus European Cranberry Bush 30" Viburnum plicatum Japanese Snowball 36" GROUND COVERS: Enonymus fortunei Wintercreeper 2 - 1/2" Peat Pots Hedera helix English Ivy 2 - 1/2" Peat Pots Pachysandra terminalis Japanese Spurge 2 - 1/2" Peat Pots Vinca minor Periwinkle 2 - 1/2" Peat Pots RECOMMENDED SOD AND SEED MIXTURE: Will be addressed at final review as part of landscape plans. E-2 Appendix A to Exhibit 10.3 Narrative Description of Graphics Exhibit E. To Exhibit 10.3 Lease Agreement, contains 15 diagrams of site development details. The pages on which these diagrams appear are labeled "Figure 1" through "Figure 15" and contain a brief description of the relevant diagram. EX-11.1 5 EXHIBIT 11.1: COMPUTATION OF EARNINGS EXHIBIT 11.1 FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE Net income applicable to common and common equivalent shares and the weighted average number of shares used in the calculation of earnings per share for the three- and six-month periods ended November 30, 1994 and 1993 were as follows (in thousands, except per share amounts):
Three Months Six Months Ended November 30, Ended November 30, -------------------- -------------------- 1994 1993 1994 1993 -------- -------- -------- -------- Net income applicable to common and common equivalent shares . . . . $ 86,139 $ 59,691 $147,281 $ 92,542 -------- -------- -------- -------- -------- -------- -------- -------- Average shares of common stock outstanding. . . . . . . . . . . . . 55,943 55,143 55,924 54,965 Common Equivalent Shares: Assumed exercise of outstanding dilutive options . . . . . . . . . 2,177 3,353 2,513 2,667 Less shares repurchased from proceeds of assumed exercise of options . . . . . . . . . . . . (1,735) (2,646) (1,937) (2,114) -------- -------- -------- -------- Average common and common equivalent shares. . . . . . . . . . 56,385 55,850 56,500 55,518 -------- -------- -------- -------- Earnings per share . . . . . . . . . . $ 1.53 $ 1.07 $ 2.61 $ 1.67 -------- -------- -------- -------- -------- -------- -------- --------
The computation of the number of shares repurchased from the proceeds of the assumed exercise of outstanding dilutive options is based upon the average market price of the Company's common stock during the periods. Common equivalent shares are excluded in periods in which their assumed exercise would have an anti-dilutive effect. Fully diluted earnings per share are substantially the same as earnings per share. EX-12.1 6 EXHIBIT 12.1: RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1 FEDERAL EXPRESS CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Unaudited)
Six Months Ended Year Ended May 31, November 30, ------------------------------------------------------- -------------------- 1990 1991 1992 1993 1994 1994 1993 -------- -------- --------- -------- -------- -------- -------- (In thousands, except ratios) Earnings: Income (loss) before income taxes. . . . $218,423 $ 40,942 $(146,828) $203,576 $378,462 $258,387 $171,374 Add back: Interest expense, net of capitalized interest . . . . 199,237 196,982 176,321 168,762 152,170 71,692 78,145 Amortization of debt issuance costs . . . . . . . 2,989 1,634 2,570 4,906 2,860 1,327 1,504 Portion of rent expense representative of interest factor. . . . . . . 248,830 292,840 299,012 262,724 285,261 155,701 136,005 -------- -------- -------- -------- -------- -------- -------- Earnings as adjusted . . . . . . . . . . $669,479 $532,398 $ 331,075 $639,968 $818,753 $487,107 $387,028 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Fixed Charges: Interest expense, net of capitalized interest . . . . . . . . . $199,237 $196,982 $ 176,321 $168,762 $152,170 $ 71,692 $ 78,145 Capitalized interest . . . . . . . . . . 16,986 35,442 26,603 31,256 29,738 11,970 16,311 Amortization of debt issuance costs. . . 2,989 1,634 2,570 4,906 2,860 1,327 1,504 Portion of rent expense representative of interest factor. . . 248,830 292,840 299,012 262,724 285,261 155,701 136,005 -------- -------- -------- -------- -------- -------- -------- $468,042 $526,898 $504,506 $467,648 $470,029 $240,690 $231,965 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- Ratio of Earnings to Fixed Charges . . . 1.4 1.0 (A) 1.4 1.7 2.0 1.7 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- (A) Earnings were inadequate to cover fixed charges by $173.4 million for the year ended May 31, 1992.
EX-15.1 7 EXHIBIT 15.1: UNAUDITED INTERIM FINANCIAL STATMNTS EXHIBIT 15.1 December 13, 1994 Federal Express Corporation 2005 Corporate Avenue Memphis, Tennessee 38132 We are aware that Federal Express Corporation will be incorporating by reference in its previously filed Registration Statements No. 2-74000, 2-95720, 33-20138, 33-38041, 33-47176, 33-50013, 33-51623, 33-55055 and 33-56569 its Report on Form 10-Q for the quarter ended November 30, 1994, which includes our report dated December 13, 1994 covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933, that report is not considered part of these registration statements prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. Very truly yours, Arthur Andersen LLP EX-27.1 8 EXHIBIT 27.1: FDS
5 This schedule contains summary financial information extracted from the condensed consolidated balance sheets and condensed consolidated statements of operations on pages 3-5 of the Company's Form 10Q for the quarterly period ended November 30, 1994, and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS MAY-31-1995 JUN-01-1994 NOV-30-1994 245,965 0 1,186,924 34,245 174,816 1,745,900 7,234,678 3,701,073 6,052,012 1,508,700 1,470,463 5,596 0 0 2,075,719 6,052,012 0 4,589,892 0 4,270,531 0 0 63,449 258,387 111,106 0 0 0 0 147,281 2.61 2.61
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