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$750,000,000
CREDIT AGREEMENT
dated as of
September 28, 2001
among
FEDEX CORPORATION,
as Borrower,
CITICORP USA, INC. and BANK OF AMERICA, N.A.,
as Co-Syndication Agents,
BANK ONE, NA, COMMERZBANK A.G.,
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
and THE ROYAL BANK OF SCOTLAND PLC
as Co-Documentation Agents,
The Several Lenders Party Hereto,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
-----------------------
J.P. MORGAN SECURITIES INC.,
as Lead Arranger and Bookrunner
===============================================================================
<Page>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..........................................................1
SECTION 1.01. Defined Terms.............................................1
SECTION 1.02. Classification of Loans and Borrowings ..................14
SECTION 1.03. Terms Generally..........................................14
SECTION 1.04. Accounting Terms; GAAP...................................15
ARTICLE II THE CREDITS........................................................15
SECTION 2.01. Commitments..............................................15
SECTION 2.02. Loans and Borrowings.....................................15
SECTION 2.03. Requests for Borrowings..................................16
SECTION 2.04. Funding of Borrowings....................................16
SECTION 2.05. Interest Elections.......................................17
SECTION 2.06. Termination and Reduction of Commitments.................18
SECTION 2.07. Repayment of Loans; Evidence of Debt.....................19
SECTION 2.08. Prepayment of Loans......................................19
SECTION 2.09. Fees.....................................................20
SECTION 2.10. Interest.................................................20
SECTION 2.11. Alternate Rate of Interest...............................21
SECTION 2.12. Increased Costs..........................................21
SECTION 2.13. Break Funding Payments...................................22
SECTION 2.14. Taxes....................................................23
SECTION 2.15. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs......................................24
SECTION 2.16. Mitigation Obligations; Replacement of Lenders...........25
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................26
SECTION 3.01. Organization; Powers.....................................26
SECTION 3.02. Authorization; Enforceability............................26
SECTION 3.03. Governmental Approvals; No Conflicts.....................26
SECTION 3.04. Financial Statements.....................................27
SECTION 3.05. Taxes....................................................27
SECTION 3.06. Litigation and Environmental Matters.....................27
SECTION 3.07. Subsidiaries.............................................27
SECTION 3.08. ERISA....................................................27
SECTION 3.09. Accuracy of Information..................................28
SECTION 3.10. Regulation U.............................................28
SECTION 3.11. Compliance with Laws and Agreements......................28
SECTION 3.12. Properties; Liens........................................28
SECTION 3.13. Investment and Holding Company Status....................28
SECTION 3.14. Citizenship..............................................28
SECTION 3.15. Status as Air Carrier....................................29
SECTION 3.16. Pari Passu...............................................29
ARTICLE IV CONDITIONS.........................................................29
SECTION 4.01. Effective Date...........................................29
SECTION 4.02. Each Credit Event........................................30
<Page>
ARTICLE V AFFIRMATIVE COVENANTS...............................................31
SECTION 5.01. Financial Statements and Other Information...............31
SECTION 5.02. Use of Proceeds..........................................32
SECTION 5.03. Notice of Material Events...............................32
SECTION 5.04. Existence; Conduct of Business...........................32
SECTION 5.05. Citizenship and Regulatory Certificates..................32
SECTION 5.06. Payment of Taxes.........................................32
SECTION 5.07. Compliance with Laws.....................................33
SECTION 5.08. Maintenance of Properties; Insurance.....................33
SECTION 5.09. Books and Records; Inspection Rights.....................33
SECTION 5.10. Leverage.................................................33
SECTION 5.11. Fixed Charge Coverage....................................33
SECTION 5.12. Guarantee Agreement......................................33
ARTICLE VI NEGATIVE COVENANTS.................................................34
SECTION 6.01. Liens....................................................34
SECTION 6.02. Restricted Investments...................................36
SECTION 6.03. Merger and Consolidation.................................36
SECTION 6.04. Sales of Assets..........................................37
SECTION 6.05. Loans, Advances and Investments..........................38
SECTION 6.06. Contingent Liabilities...................................38
SECTION 6.07. Negative Covenants in Subsidiary Agreements..............39
SECTION 6.08. Sales of Unrestricted Margin Stock.......................39
SECTION 6.09. Subsidiary Indebtedness..................................40
ARTICLE VII EVENTS OF DEFAULT.................................................40
ARTICLE VIII THE AGENTS.......................................................42
SECTION 8.01. Appointment..............................................42
SECTION 8.02. Delegation of Duties.....................................43
SECTION 8.03. Exculpatory Provisions...................................43
SECTION 8.04. Reliance by Administrative Agent.........................43
SECTION 8.05. Notice of Default........................................43
SECTION 8.06. Non-Reliance on Agents and Other Lenders.................44
SECTION 8.07. Indemnification..........................................44
SECTION 8.08. Agent in Its Individual Capacity.........................44
SECTION 8.09. Successor Administrative Agent...........................45
SECTION 8.10. Documentation Agent and Syndication Agent................45
ARTICLE IX MISCELLANEOUS......................................................45
SECTION 9.01. Amendments and Waivers...................................45
SECTION 9.02. Notices..................................................46
SECTION 9.03. No Waiver; Cumulative Remedies...........................47
SECTION 9.04. Survival of Representations and Warranties...............47
SECTION 9.05. Payment of Expenses and Taxes............................47
SECTION 9.06. Successors and Assigns; Participations and Assignments...48
SECTION 9.07. Adjustments; Set-off.....................................51
SECTION 9.08. Counterparts.............................................51
<Page>
SECTION 9.09. Severability.............................................51
SECTION 9.10. Integration..............................................52
SECTION 9.11. GOVERNING LAW............................................52
SECTION 9.12. Submission To Jurisdiction; Waivers......................52
SECTION 9.13. Acknowledgements.........................................52
SECTION 9.14. Release of Guarantors....................................53
SECTION 9.15. Confidentiality..........................................53
SECTION 9.16. WAIVERS OF JURY TRIAL....................................53
SECTION 9.17. Waiver...................................................53
SECTION 9.18. Interest Rate Limitation.................................53
SECTION 9.19. Headings.................................................54
<Page>
SCHEDULES:
----------
Schedule 2.01 - Lenders and Commitments
Schedule 3.06 - Disclosed Matters
Schedule 3.07 - Significant Subsidiaries
Schedule 5.01(c) - Compliance Calculations
Schedule 5.12 - Subsidiary Guarantors
EXHIBITS:
---------
Exhibit A - Form of Borrowing Request
Exhibit B - Form of Interest Election Request
Exhibit C - Form of Guarantee Agreement
Exhibit D - Form of Opinion of Borrower's General Counsel
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Exemption Certificate
<Page>
FIVE-YEAR CREDIT AGREEMENT dated as of September 28, 2001, among FEDEX
CORPORATION, the LENDERS party hereto, THE CHASE MANHATTAN BANK, as
Administrative Agent, CITICORP USA, INC. and BANK OF AMERICA, N.A., as
Co-Syndication Agents and BANK ONE, NA, COMMERZBANK A.G., BANK OF
TOKYO-MITSUBISHI TRUST COMPANY and THE ROYAL BANK OF SCOTLAND PLC, as
Co-Documentation Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADJUSTED NET INCOME" means, for any period on a consolidated basis in
accordance with GAAP, the income (loss) before income taxes of the Borrower and
its consolidated Subsidiaries for such period MINUS, to the extent included in
determining such income (loss) for such period, any net loss or gain realized in
connection with any sale or disposition of any asset (other than in the ordinary
course of business).
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders hereunder.
"AFFILIATE" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGENTS" means the collective reference to the Co-Syndication Agents,
the Co-Documentation Agents and the Administrative Agent.
"AGGREGATE EXPOSURE": with respect to any Lender at any time, an
amount equal to (a) until the Effective Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the amount of such
Lender's Commitment then in effect or, if the Commitments have been terminated,
the amount of such Lender's Loans then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
<Page>
2
"AGREEMENT" means this Five-Year Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the higher of (a) the Prime Rate in effect on such day or (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"APPLICABLE RATE" means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
"ABR Spread", Eurodollar Spread" or "Facility Fee Rate", as the case may be,
based upon the ratings by Moody's and S&P, respectively, applicable on such date
to the Index Debt:
<Table>
<Caption>
================================================================================================================
ABR EURODOLLAR FACILITY FEE
CATEGORY INDEX DEBT RATINGS SPREAD SPREAD RATE
-------- ------------------ ------ ------ ----
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CATEGORY 1 Rating GREATER THAN OR EQUAL TO A- from S&P
or GREATER THAN OR EQUAL TO A3 from Moody's 0% 0.275% 0.100%
-----------------------------------------------------------------------------------------------------------------
Rating = BBB+ from S&P
CATEGORY 2 or = Baa1 from Moody's 0% 0.375% 0.125%
-----------------------------------------------------------------------------------------------------------------
Rating = BBB from S&P
CATEGORY 3 or = Baa2 from Moody's 0% 0.475% 0.150%
-----------------------------------------------------------------------------------------------------------------
Rating = BBB- from S&P
CATEGORY 4 or = Baa3 from Moody's 0% 0.800% 0.200%
-----------------------------------------------------------------------------------------------------------------
Rating < BBB- from S&P
CATEGORY 5 and < Baa3 from Moody's 0.125% 1.125% 0.250%
=================================================================================================================
</Table>
For purposes of the foregoing, (i) if the ratings established or
deemed to have been established by Moody's and S&P for the Index Debt shall be
changed (other than as a result of a change in the rating system of Moody's or
S&P), such change shall be effective as of the date on which it is first
announced by the applicable rating agency; (ii) if the ratings established or
deemed to have been established by Moody's and S&P for the Index Debt shall fall
within different Categories, the Applicable Rate shall be based on the higher of
the two ratings unless one of the two ratings is two or more Categories lower
than the other, in which case the Applicable Rate shall be determined by
reference to the Category next below that of the higher of the two ratings; and
(iii) if either Moody's or S&P shall not have in effect a rating for the Index
Debt (other than by reason of the circumstances referred to in the last sentence
of this definition), then such rating agency shall be
<Page>
3
deemed to have established a rating in Category 5. Each change in the Applicable
Rate shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change. If the rating system of Moody's or S&P shall change, the
Borrower and the Lenders shall negotiate in good faith to amend this definition
to reflect such changed rating system and, pending the effectiveness of any such
amendment, the Applicable Rate shall be determined by reference to the rating
most recently in effect prior to such change.
"ASSIGNEE" has the meaning assigned to such term in Section 9.06(c).
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.06), and accepted by the Administrative Agent, in the form
of EXHIBIT E.
"ASSIGNOR" has the meaning assigned to such term in Section 9.06(c).
"AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"BENEFICIAL OWNER" means a Person deemed the "Beneficial Owner" of any
securities as to which such Person or any of such Person's Affiliates is or may
be deemed to be the beneficial owner pursuant to Rule 13d-3 or l3d-5 under the
Securities Exchange Act of 1934 (as the same may from time to time be amended,
modified or readopted), as well as any securities as to which such Person or any
of such Person's Affiliates has the right to become such a beneficial owner
(whether such right is exercisable immediately or only after the passage of time
or the occurrence of a specified event) pursuant to any agreement, arrangement
or understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise. In determining the percentage of the
outstanding Voting Stock with respect to which a Person is the Beneficial Owner,
all shares as to which such Person is deemed the Beneficial Owner shall be
deemed outstanding.
"BENEFITTED LENDER" has the meaning assigned to such term in Section
9.07(a).
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States of America.
"BORROWER" means FedEx Corporation, a Delaware corporation.
"BORROWING" means Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"BORROWING REQUEST" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; PROVIDED that, when used in connection with a Eurodollar Loan,
the term "BUSINESS DAY" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
<Page>
4
"CAPITALIZED OPERATING LEASE VALUE" means the present value, using a
discount rate equal to 12.5%, of the Borrower's and the consolidated
Subsidiaries' future minimum lease payments for aircraft leases scheduled to
terminate more than 365 days after their respective dates of execution.
"CAPITALIZED LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases ("CAPITALIZED LEASE") on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CHANGE OF CONTROL" means any of the following: (a) any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
thereof) becoming the Beneficial Owner of Voting Stock of the Borrower having
more than 30 percent of the voting power of all of the then outstanding Voting
Stock of the Borrower or (b) individuals who are not Continuing Directors
constituting a majority of the Board of Directors of the Borrower.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITMENT" means, with respect to any Lender, the obligation of such
Lender, if any, to make Loans hereunder, in an amount not to exceed the amount
set forth under the heading "Commitment" opposite such Lender's name on SCHEDULE
2.01 or in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed form time to time pursuant to the terms
hereof. The aggregate original amount of the Commitments on the Effective Date
is $750,000,000.
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"CONDUIT LENDER" means any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
PROVIDED, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and PROVIDED,
FURTHER, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.12, 2.13, 2.14, 2.15 or 9.05 than the designating
Lender would
<Page>
5
have been entitled to receive in respect of the extensions of credit made by
such Conduit Lender or (b) be deemed to have any Commitment.
"CONSOLIDATED ADJUSTED NET WORTH" means, at any date as of which the
amount thereof is to be determined, (a) the sum of the amounts set forth as
preferred stock, common stock, capital in excess of par value or paid-in surplus
and retained earnings on a consolidated balance sheet of the Borrower and the
consolidated Subsidiaries prepared as of such date in accordance with GAAP,
minus (b) the sum of the amounts set forth on such consolidated balance sheet as
(i) the cost of any shares of the Borrower's common stock held in the treasury,
(ii) any surplus resulting from any write-up of assets after the date of this
Agreement and (iii) the aggregate value of all goodwill, all as determined in
accordance with GAAP.
"CONSOLIDATED ADJUSTED TOTAL ASSETS" means, at any date as of which
the amount thereof is to be determined, (a) the aggregate amount set forth as
the assets of the Borrower and the consolidated Subsidiaries on a consolidated
balance sheet of the Borrower and the consolidated Subsidiaries prepared as of
such date in accordance with GAAP, minus (b) the aggregate book value as of such
date of determination of all assets of the Borrower or any consolidated
Subsidiary subject on such date of determination to a Lien permitted by Section
6.01(j).
"CONSOLIDATED CASH FLOW" means, on a consolidated basis for the
Borrower and its consolidated Subsidiaries for any period, the sum of (i)
Adjusted Net Income plus (ii) Interest Expense plus (iii) Rent Expense, in each
case as determined in accordance with GAAP for such period.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
net loss) of the Borrower and the consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP and after giving
appropriate effect to any outside minority interests in the consolidated
Subsidiaries, excluding
(i) any aggregate net gain arising from the sale or other disposition
of any assets other than any such gain arising from the sale or other
disposition of assets (including aircraft) in the ordinary course of
business,
(ii) any gain arising from any write-ups of assets,
(iii) any unrealized capital gain or loss on any investment,
(iv) any portion of the earnings of any consolidated Subsidiary which
for any reason is unavailable for payment of dividends to the Borrower or
another consolidated Subsidiary,
(v) any amount representing the interest of the Borrower and the
consolidated Subsidiaries in the undistributed earnings of any other Person
(other than a consolidated Subsidiary),
(vi) the net income (or net loss) of any Person prior to the date it
became a consolidated Subsidiary, and
(vii) the effect of the application of Financial Accounting Standards
Board Statement No. 142.
<Page>
6
"CONTINGENT OBLIGATION" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, or take-or-pay contract.
"CONTINUING DIRECTOR" means an individual who is a member of the Board
of Directors of the Borrower on the date of this Agreement or who shall have
become a member of the Board of Directors of the Borrower subsequent to such
date and who shall have been nominated or elected by a majority of the other
Continuing Directors then members of the Board of Directors of the Borrower.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"CREDIT EXPOSURE" means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Loans at such time.
"CURRENT MATURITIES" means, as of any date with respect to the Long
Term Debt or the Capitalized Lease Obligations of any Person, any portion of
such Long Term Debt or Capitalized Lease Obligations, as the case may be, which
would in accordance with GAAP be classified as a current liability of such
Person.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in SCHEDULE 3.06.
"DOLLARS" or $" refers to lawful money of the United States of
America.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.01).
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened
<Page>
7
release of any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EURODOLLAR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in Article
VII.
"EXISTING REVOLVING CREDIT FACILITY" means the Credit Agreement dated
as of January 15, 1998 among the Borrower and Bank One, N.A. (formerly known as
The First National Bank of Chicago), individually and as agent, and certain
lenders.
"FAA" means the Federal Aviation Administration or any other
governmental agency succeeding to the jurisdiction thereof.
"FEDERAL AVIATION ACT" means the Federal Aviation Act of 1958, as
amended from time to time.
"FEDERAL EXPRESS CORPORATION" means Federal Express Corporation, a
Delaware corporation.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate
per annum equal to the weighted average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer, staff vice president and assistant treasurer or
controller of the Borrower.
"FLIGHT EQUIPMENT" means, collectively, aircraft, aircraft engines,
appliances and spare parts, all as defined in the Federal Aviation Act, and
related parts.
"FUNDED DEBT" means, as of any date of determination, any Indebtedness
(excluding items characterized as Indebtedness pursuant to clause (vii) of the
definition thereof other than Contingent Obligations in respect of Indebtedness
of Persons other than the Borrower or its consolidated Subsidiaries) of the
Borrower and its consolidated Subsidiaries that is outstanding on such date.
"GAAP" means generally accepted principles of accounting as in effect
from time to time in the United States of America.
<Page>
8
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE AGREEMENT" means that certain Guaranty of even date
herewith, executed by each Guarantor, substantially in the form of EXHIBIT C
attached hereto.
"GUARANTOR" means each Subsidiary that executes the Guarantee
Agreement in accordance with Section 5.12 hereof. The initial Guarantors are set
forth on Schedule 5.12 hereto.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGE AGREEMENT" means any interest rate swap, exchange or cap
agreement.
"INDEBTEDNESS" of a Person means, without duplication, such Person's
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from property now or hereafter owned or
acquired by such Person, (iv) obligations which are evidenced by notes,
acceptances, or other similar instruments, (v) Capitalized Lease Obligations,
(vi) net liabilities under Hedge Agreements, (vii) Contingent Obligations, and
(viii) obligations created through asset securitization financing programs.
"INDEX DEBT" means senior, unsecured, non-credit enhanced long-term
indebtedness for borrowed money of the Borrower.
"INSOLVENCY" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INTEREST ELECTION REQUEST" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.05.
"INTEREST EXPENSE" means, for any period, the gross interest expense
(without regard to any offsetting interest income or reduction for capitalized
interest) of the Borrower and its consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
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"INTEREST PERIOD" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; PROVIDED, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account (other than a demand deposit account maintained in the
ordinary course of business) or contribution of capital by such Person to any
other Person or any investment in, or purchase or other acquisition of, the
stock, partnership interests, notes, debentures or other securities of any other
Person made by such Person.
"LENDER AFFILIATE" means (a) any Affiliate of any Lender, (b) any
Person that is administered or managed by any Lender or any Affiliate of any
Lender and that is engaged in making, purchasing, holding or otherwise investing
in commercial loans and similar extensions of credit in the ordinary course of
its business and (c) with respect to any Lender which is a fund that invests in
commercial loans and similar extensions of credit, any other fund that invests
in commercial loans and similar extensions of credit and is managed or advised
by the same investment advisor as such Lender or by an Affiliate of such Lender
or investment advisor.
"LENDERS" means the Persons listed on SCHEDULE 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, each
reference herein to the Lenders shall be deemed to include any Conduit Lender.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO RATE" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
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"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or other security
agreement of any kind or nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale, Capitalized Lease or
other title retention agreement).
"LOANS" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"LOAN DOCUMENTS" means this Agreement, the Guarantee Agreement and the
Notes, if any.
"LOAN PARTIES" means the collective reference to the Borrower and each
Guarantor.
"LONG TERM DEBT" means, as of any date with respect to any Person, all
liabilities of such Person outstanding on such date which would in accordance
with GAAP be classified as long term debt of such Person.
"MARGIN STOCK" has the meaning assigned to such term in Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Administrative Agent or the Lenders thereunder.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans) of
any one or more of the Borrower and its consolidated Subsidiaries, in the case
of any single item of such Indebtedness, in excess of $20,000,000 (or the
equivalent thereof in any other currency) or, in the case of all such
Indebtedness, in an aggregate principal amount in excess of $60,000,000 (or the
equivalent thereof in any other currency).
"MATURITY DATE" means September 28, 2006, or if such date is not a
Business Day, the next succeeding Business Day.
"MOODY'S" means Moody's Investors Service, Inc., or, if Moody's shall
cease rating Indebtedness of the Borrower and its ratings business with respect
to Indebtedness of the Borrower shall have been transferred to a successor
Person, such successor Person; PROVIDED, HOWEVER, that if Moody's ceases rating
securities similar to Indebtedness of the Borrower and its ratings business with
respect to such securities shall not have been transferred to any successor
Person, then "Moody's" shall mean any other nationally recognized rating agency
(other than S&P) selected by the Borrower and reasonably satisfactory to the
Administrative Agent that rates any Indebtedness of the Borrower.
"MULTIEMPLOYER PLAN" means a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NON-EXCLUDED TAXES" has the meaning assigned to such term in Section
2.14(a).
"NON-U.S. LENDER" has the meaning assigned to such term in Section
2.14(d).
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"NOTES" means any promissory notes executed by the Borrower in favor
of a Lender party hereto pursuant to Section 2.07(e).
"OBLIGATIONS" means the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or to any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs or expenses (including all fees, charges
and disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Borrower pursuant hereto).
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PARTICIPANT" has the meaning assigned to such term in Section
9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED INVESTMENTS" means (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws of the
United States or any state thereof having combined capital and surplus of not
less than $250,000,000; (c) commercial paper of an issuer rated at least A-1 by
S&P or P-1 by Moody's, or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally, and maturing within
one year from the date of acquisition; (d) repurchase obligations of any Lender
or of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days, with respect to securities
issued or fully guaranteed or insured by the United States government; (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody's; (f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition; or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
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"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"PROPERTY" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned
or leased by such Person.
"REGISTER" has the meaning assigned to such term in Section 9.06(d).
"REGULATION U" means Regulation U of the Board as from time to time in
effect and any successor or other regulation or official interpretation of the
Board relating to the extension of credit by banks for the purpose of purchasing
or carrying Margin Stock applicable to member banks of the Federal Reserve
System.
"RENT EXPENSE" means, for any period, the rental expense of the
Borrower and its consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP excluding rental expense with respect
to leases of aircraft scheduled to terminate no more than 365 days after their
respective dates of execution.
"REORGANIZATION" means, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(c) of ERISA, other than those events for which the thirty day notice period
has been waived under the Regulations of PBGC.
"REQUIRED LENDERS" means, at any time, Lenders having Credit Exposures
and unused Commitments representing at least 51% of the sum of the total Credit
Exposures and unused Commitments at such time.
"REQUIREMENT OF LAW" means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESTRICTED INVESTMENT" means any Investment other than an Investment
permitted by Section 6.05.
"RESTRICTED MARGIN STOCK" means Margin Stock owned by the Borrower or
any Subsidiary which represents not more than 33-1/3% of the aggregate value
(determined in
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13
accordance with Regulation U), on a consolidated basis, of the Property and
assets of the Borrower and the Subsidiaries (other than Margin Stock) that is
subject to the provisions of Article 6 (including Section 6.01).
"SIGNIFICANT SUBSIDIARY" means, during each fiscal year of the
Borrower, any Subsidiary of the Borrower which had revenues (determined in
accordance with GAAP) for the immediately preceding fiscal year of the Borrower
in excess of 2.0% of the consolidated revenues (determined in accordance with
GAAP) of the Borrower and the consolidated Subsidiaries for such immediately
preceding fiscal year.
"SINGLE EMPLOYER PLAN" means any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or, if S&P shall cease rating Indebtedness of the Borrower
and its ratings business with respect to Indebtedness of the Borrower shall have
been transferred to a successor Person, such successor Person; PROVIDED,
HOWEVER, that if S&P ceases rating securities similar to Indebtedness of the
Borrower and its ratings business with respect to such securities shall not have
been transferred to any successor Person, then "S&P" shall mean any other
nationally recognized rating agency (other than Moody's) selected by the
Borrower and reasonably satisfactory to the Administrative Agent that rates any
Indebtedness of the Borrower.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of
the outstanding Voting Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its subsidiaries or
by such Person and one or more of its subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than 50% of the
ownership interests having power to direct the ordinary affairs thereof of which
shall at the time be so owned or controlled.
"SUBSIDIARY" means any subsidiary of the Borrower.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"364-DAY COMMITMENT" has the meaning attributed to the term
"Commitment" in the 364-Day Credit Agreement.
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"364-DAY CREDIT AGREEMENT" means the 364-Day Credit Agreement dated as
of the date hereof among the Borrower, the lenders party thereto and The Chase
Manhattan Bank, as administrative agent.
"364-DAY GUARANTEE AGREEMENT" means that certain Guaranty of the
obligations under the 364-Day Credit Agreement of even date herewith, executed
by each Guarantor, substantially in the form of EXHIBIT C attached hereto.
"364-DAY LOANS" has the meaning attributed to the term "Loans" in the
364-Day Credit Agreement.
"TRANSACTIONS" means the execution, delivery and performance by each
Loan Party of the Loan Documents to which it is a party, the borrowing of Loans
by the Borrower and the use of the proceeds thereof by the Borrower.
"TRANSFEREE" means any Assignee or Participant.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UNFUNDED LIABILITIES" means the sum of the amount (if any) by which
the present value of the accrued benefits under each Single Employer Plan
exceeds the fair market value of such Plan assets allocable to such benefits,
aggregating all such Plans in which benefits exceed the value of such assets,
all determined as of the then most recent valuation date for such Plans.
"UNRESTRICTED MARGIN STOCK" means any Margin Stock owned by the
Borrower or any Subsidiary which is not Restricted Margin Stock.
"UTILIZATION FEES" has the meaning set forth in Section 2.09(b).
"VOTING STOCK" means all outstanding shares of capital stock of a
Person entitled to vote generally in the election of directors.
"WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any subsidiary all of
the outstanding voting securities (other than directors' qualifying shares and
other de minimis local ownership required by law) of which shall at the time be
owned or controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any Person 100% of the
ownership interests (other than directors' qualifying shares and other de
minimis local ownership required by law) having ordinary voting power of which
shall at the time be so owned or controlled. Unless otherwise specified herein,
references to "Wholly-Owned Subsidiaries" herein shall be deemed to refer to
Wholly-Owned Subsidiaries of the Borrower.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Type (E.G., a
Eurodollar Loan") and Borrowings also may be classified and referred to by Type
(E.G., a Eurodollar Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any
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pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (a) such Lender's Credit Exposure exceeding such Lender's Commitment
or (b) the sum of the total Credit Exposures exceeding the total Commitments.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Loans.
SECTION 2.02. LOANS AND BORROWINGS. (a)Each Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in accordance
with their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; PROVIDED that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.11, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Lender Affiliate
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to make such Loan; PROVIDED that any exercise of such option shall not affect
the obligation of the Borrower to repay such Loan in accordance with the terms
of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000; PROVIDED that an
ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. Borrowings of more than one Type may be
outstanding at the same time; PROVIDED that there shall not at any time be more
than a total of 15 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, at least three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City
time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in the form
of EXHIBIT A. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.04.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately
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available funds by 12:00 noon, New York City time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the
case of the Borrower, the interest rate applicable to ABR Loans. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
SECTION 2.05. INTEREST ELECTIONS. (a) Each Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in
the form of EXHIBIT B.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
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(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.06. TERMINATION AND REDUCTION OF COMMITMENTS. Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
(a) The Borrower may at any time terminate, or from time to time
reduce, the Commitments; PROVIDED that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $10,000,000 and not less
than $20,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.08, the Credit Exposures of the Lenders would exceed
the total Commitments.
(b) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (a) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; PROVIDED that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
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SECTION 2.07. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan on the
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.06) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.08. PREPAYMENT OF LOANS. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (b) of this Section.
(b) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; PROVIDED that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.06, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.06. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Partial prepayments of
Loans shall be in an aggregate principal
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amount of $5,000,000 or a whole multiple thereof. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.10.
SECTION 2.09. FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates;
PROVIDED that, if such Lender continues to have any Credit Exposure after its
Commitment terminates, then such facility fee shall continue to accrue on the
daily amount of such Lender's Credit Exposure from and including the date on
which its Commitment terminates to but excluding the date on which such Lender
ceases to have any Credit Exposure. Accrued facility fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof; PROVIDED that any facility fees accruing
after the date on which the Commitments terminate shall be payable on demand.
All facility fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(b) If on any day the sum of the aggregate outstanding principal
amount of all Loans and all 364-Day Loans exceeds the sum of (i) the product of
(A) one-third (1/3) TIMES (B) the Commitment and (ii) the product of (A)
one-third (1/3) TIMES (B) the 364-Day Commitment, then the Borrower shall pay to
the Administrative Agent, for the pro rata benefit of each Lender, a fee (the
"UTILIZATION FEE") of 0.125% per annum on the sum of the Borrower's outstanding
Loans and outstanding 364-Day Loans. Accrued Utilization Fees shall be payable
in arrears on the last day of March, June, September and December of each year
(as well as on the Maturity Date and on any day that the Commitment is reduced).
All Utilization Fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent. Fees paid shall not be
refundable under any circumstances.
SECTION 2.10. INTEREST. (a) The Loans comprising each ABR Borrowing
shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2%
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plus the rate otherwise applicable to such Loan as provided above or (ii) in the
case of any other amount, 2% plus the rate applicable to ABR Loans as provided
above.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; PROVIDED that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any Eurodollar
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion and (iv)
all accrued interest shall be payable upon termination of the Commitments.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.11. ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.12. INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
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and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section, setting forth in
reasonable detail the calculations upon which such Lender determined such
amount, shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 15 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; PROVIDED that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than six months prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
PROVIDED FURTHER that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.
SECTION 2.13. BREAK FUNDING PAYMENTS. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
under Section 2.08(b) and is revoked in accordance herewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.16, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, the loss to any Lender attributable to any such event shall be
deemed to include an amount determined by such Lender to be equal to the excess,
if any, of (i) the amount of interest that such Lender would pay for a deposit
equal to the principal amount of such Loan for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the duration of the Interest Period that would have resulted from
such borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for such Interest Period, over (ii)
the amount of interest that such Lender would earn on such principal amount for
such period if such Lender were to invest such principal amount
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for such period at the interest rate that would be bid by such Lender (or an
Affiliate of such Lender) for dollar deposits from other banks in the eurodollar
market at the commencement of such period. A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower, setting forth in reasonable
detail the calculations upon which such Lender determined such amount, and shall
be conclusive absent manifest error. The Borrower shall pay such Lender the
amount shown as due on any such certificate within 15 days after receipt
thereof.
SECTION 2.14. TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, PROVIDED, HOWEVER, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as defined
in Section 7701(a)(30) of the Code (a "NON-U.S. LENDER") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-
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8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
EXHIBIT F and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, PROVIDED that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 2.15. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or under Section 2.12, 2.13
or 2.14, or otherwise) prior to 12:00 noon, New York City time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York and except that payments pursuant to Sections 2.12, 2.13, 2.14
and 9.05 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, to pay interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii)
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second, to pay principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; PROVIDED that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(b) or 2.15(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.16. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If
any Lender requests compensation under Section 2.12, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.14, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. To the extent
reasonably possible, each Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to
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another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment would avoid the unavailability of
Eurodollar Loans under Section 2.11, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion.
The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) The Borrower shall, at its sole expense and effort, have the
right, by giving at least 15 Business Days' prior written notice to the affected
Lender and the Administrative Agent, at any time when no Default or Event of
Default has occurred and is continuing, to require any Lender to assign all of
its rights and obligations under the Loan Documents to any other Lender (other
than a Conduit Lender) approved by the Borrower. Such assignment shall be
substantially in the form of EXHIBIT E hereto or in such other form as may be
agreed to by the parties thereto but shall be on terms and conditions reasonably
satisfactory to the affected Lender. The Borrower shall remain liable to the
affected Lender for any indemnification provided under Section 2.13 with respect
to Loans of such Lender outstanding on the effective date of an assignment
required under this Section 2.16(b), as well as for all other Obligations owed
to such Lender under this Agreement as of such effective date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS. The Borrower and each of the
Significant Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY. The Transactions are
within the Borrower's and each of the Guarantors' corporate powers and authority
and have been duly authorized by all necessary corporate action. The Loan
Documents (i) have been duly executed and delivered by the Borrower and each of
the Guarantors and (ii) constitute legal, valid and binding obligations of the
Borrower and each of the Guarantors, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower, any Guarantor or any of the Significant Subsidiaries
or any order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, agreement or
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other instrument binding upon the Borrower, any Guarantor or any of the
Significant Subsidiaries or their assets, or give rise to a right thereunder to
require any payment to be made by the Borrower, any Guarantor or any of the
Significant Subsidiaries, and (d) will not result in the creation or imposition
of any Lien on any asset of the Borrower or any of the Significant Subsidiaries.
SECTION 3.04. FINANCIAL STATEMENTS. The Borrower has heretofore
furnished to the Lenders its consolidated balance sheet, related profit and loss
and reconciliation of surplus statements, and a statement of cash flows as of
and for the fiscal year ended May 31, 2001, reported on by Arthur Andersen LLP,
independent public accountants. Such financial statements present fairly, in all
material respects, the consolidated financial condition and operations of the
Borrower and its consolidated Subsidiaries as of such date and the consolidated
results of their operations for the periods then ended, in accordance with GAAP.
SECTION 3.05. TAXES. The Borrower and each of its Significant
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Borrower or such Significant
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Significant Subsidiaries (i)
that could reasonably be expected, individually or in the aggregate, to result
in a Material Adverse Effect (other than the Disclosed Matters listed on
SCHEDULE 3.06) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters listed on SCHEDULE 3.06 and
except with respect to any matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of its Significant Subsidiaries (i) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law, (ii) has become subject
to any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Other than any liability incident to the Disclosed Matters, the
Borrower and its Significant Subsidiaries have no material contingent
obligations not provided for or disclosed in the financial statements referred
to in Section 3.04. Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in a Material Adverse Effect.
SECTION 3.07. SUBSIDIARIES. SCHEDULE 3.07 hereto contains an accurate
list of all of the presently existing Significant Subsidiaries of the Borrower,
setting forth their respective jurisdictions of incorporation and the percentage
of their respective capital stock owned by the Borrower or other Subsidiaries.
All of the issued and outstanding shares of capital stock of such Significant
Subsidiaries have been duly authorized and issued and are fully paid and
non-assessable.
SECTION 3.08. ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has
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occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvency.
SECTION 3.09. ACCURACY OF INFORMATION. None of the reports, financial
statements, certificates or other information furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder by the Borrower (as
subsequently modified, superseded or supplemented by other information so
furnished), contains, when taken as a whole, any material misstatement of fact
or omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
SECTION 3.10. REGULATION U. Margin Stock constitutes less than 25% of
the aggregate value (determined in accordance with Regulation U), on a
consolidated basis, of the Property and assets of the Borrower and its
Subsidiaries that is subject to the provisions of Article 6 (including Section
6.01).
SECTION 3.11. COMPLIANCE WITH LAWS AND AGREEMENTS. The Borrower and
each of its Significant Subsidiaries is in compliance with all laws, regulations
and orders of any Governmental Authority applicable to it or its property and
all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. No
Default has occurred and is continuing.
SECTION 3.12. PROPERTIES; LIENS. The Borrower and each of the
Significant Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business, except for any such
defects that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, and none of such property is subject to
any Lien except as permitted by Section 6.01.
SECTION 3.13. INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Borrower nor any of its Subsidiaries is (a) an investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.14. CITIZENSHIP. Federal Express Corporation is a citizen of
the United States, as defined in 49 U.S.C. Section 40102(a)(15) (a "CITIZEN").
Each other Subsidiary that must
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be a Citizen in order to conduct its business as currently conducted is a
Citizen. Neither Federal Express Corporation nor any such other Subsidiary is a
national of any foreign country designated in Presidential Executive Order No.
8389 or 9193, as amended, and the regulations issued thereunder, as amended, or
a national of any foreign country designated in the Foreign Assets Control
Regulations or in the Cuban Assets Control Regulations of the United States
Treasury Department, 31 C.F.R., Chapter V, as amended.
SECTION 3.15. STATUS AS AIR CARRIER. Federal Express Corporation, and
each other Subsidiary that must be so authorized in order to conduct its
business as currently conducted, (i) is authorized to engage in all cargo
domestic and international air service under certificates issued pursuant to 49
U.S.C. Section 41103 and 49 U.S.C. Section 41102(a), respectively, and
(ii) is the holder of a valid and effective operating certificate issued by
the FAA pursuant to Part 119 of the regulations under the Federal Aviation
Act. Such certificates are in full force and effect and are adequate for the
conduct of the business of the Borrower and its Subsidiaries as now
conducted. There are no actions, proceedings or investigations pending or, to
the knowledge of the executive officers of the Borrower, threatened (or any
basis therefor known to the Borrower) to amend, modify, suspend or revoke any
such certificate in whole or in part, which would have any material adverse
effect on any such certificate or any of the operations of the Borrower or
its Subsidiaries.
SECTION 3.16. PARI PASSU. All the payment obligations of the Borrower
and the Guarantors arising under or pursuant to the Loan Documents will at all
times rank pari passu, with all other unsecured and unsubordinated payment
obligations and liabilities (including contingent obligations and liabilities)
of the Borrower and the Guarantors (other than those which are mandatorily
preferred by laws or regulations of general application).
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make
Loans shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.01):
(a) The Administrative Agent (or its counsel) shall have received (i)
from each party hereto either a counterpart of this Agreement signed on behalf
of such party or written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement and (ii)
the Guarantee Agreement, executed and delivered by each Guarantor.
(b) The Administrative Agent shall have received satisfactory evidence
that the Existing Revolving Credit Facility shall have been terminated and all
amounts thereunder shall have been paid in full.
(c) The Administrative Agent shall have received a written opinion
from counsel to the Borrower, substantially in the form of EXHIBIT D.
(d) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrower and
the domestic Significant Subsidiaries
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and the authorization of the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(e) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02.
(f) Since May 31, 2001, there has been no change in the business,
Property, prospects, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries taken as a whole which could reasonably be
expected to have a Material Adverse Effect and the Administrative Agent shall
have received a written representation and warranty by the Borrower as of the
Effective Date.
(g) The Administrative Agent shall have received (i) satisfactory
audited consolidated financial statements of the Borrower for the two most
recent fiscal years ended prior to the Effective Date as to which such financial
statements are available, and (ii) satisfactory unaudited interim consolidated
financial statements of the Borrower for each quarterly period ended subsequent
to the date of the latest financial statements delivered pursuant to clause (i)
of this paragraph as to which such financial statements are available.
(h) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.01) at or prior to 3:00 p.m., New York City time, on
October 15, 2001 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.02. EACH CREDIT EVENT. The obligation of each Lender to make
a Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Borrower set forth in
this Agreement shall be true and correct on and as of the date of such
Borrowing.
(b) At the time of and immediately after giving effect to such
Borrowing no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
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ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Borrower,
its audited consolidated balance sheet, related profit and loss and
reconciliation of surplus statements, and a statement of cash flows as of
the end of and for such year, setting forth in each case the figures for
the previous fiscal year, all reported on by Arthur Andersen LLP or other
independent public accountants of recognized national standing (without a
"going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit);
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, an unaudited consolidated
balance sheet and consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default or Event of Default has
occurred and, if a Default or Event of Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto and (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 5.10 and 5.11, substantially in the
form of SCHEDULE 5.01(c) hereto;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any Default
or Event of Default (which certificate may be limited to the extent
required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of all
regular and periodic reports, proxy statements and prospectuses filed by
the Borrower, any Guarantor or any Significant Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any
national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be; and
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(f) promptly following any request therefor, such other information
(including non-financial information) as the Administrative Agent or
any Lender may from time to time reasonably request.
SECTION 5.02. USE OF PROCEEDS. The proceeds of the Loans will be used
only for general corporate purposes, including commercial paper back-up and
acquisitions. No part of the proceeds of any Loan will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulation U.
SECTION 5.03. NOTICE OF MATERIAL EVENTS. The Borrower will, and will
cause each Subsidiary to, furnish to the Administrative Agent and each Lender
prompt written notice of the occurrence of any Default or Event of Default or
any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect. Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS. Except as permitted by
Sections 6.03 and 6.04, the Borrower will, and will cause each Significant
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporatio