Exhibit 10.1

 

 

$2,000,000,000

 

CREDIT AGREEMENT

 

dated as of

 

February 11, 2004

 

among

 

FEDEX CORPORATION,
as Borrower,

 

CITICORP USA, INC. and BANK OF AMERICA, N.A.,
as Co-Syndication Agents,

 

BANK ONE, NA,

BANK OF TOKYO-MITSUBISHI TRUST COMPANY,

COMMERZBANK A.G. and MERRILL LYNCH BANK USA,

as Co-Documentation Agents,

 

 

The Several Lenders Party Hereto,

 

and

 

JPMORGAN CHASE BANK,
as Administrative Agent

 

--------------------------------------------------------------------------------

 

J.P. MORGAN SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner

 

 

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TABLE OF CONTENTS

 

ARTICLE I  DEFINITIONS

 

 

 

 

 

 

 

 

SECTION 1.01.

Defined Terms

 

 

 

SECTION 1.02.

Classification of Loans and Borrowings

 

 

 

SECTION 1.03.

Terms Generally.

 

 

 

SECTION 1.04.

Accounting Terms; GAAP

 

 

 

 

 

 

 

ARTICLE II  THE CREDITS

 

 

 

 

 

 

 

 

SECTION 2.01.

Commitments

 

 

 

SECTION 2.02.

Loans and Borrowings

 

 

 

SECTION 2.03.

Requests for Borrowings

 

 

 

SECTION 2.04.

Funding of Borrowings

 

 

 

SECTION 2.05.

Interest Elections

 

 

 

SECTION 2.06.

Termination and Reduction of Commitments

 

 

 

SECTION 2.07.

Repayment of Loans; Evidence of Debt

 

 

 

SECTION 2.08.

Optional Prepayment of Loans

 

 

 

SECTION 2.09.

Mandatory Reduction of Commitments and Prepayment of Loans

 

 

 

SECTION 2.10.

Fees

 

 

 

SECTION 2.11.

Interest

 

 

 

SECTION 2.12.

Alternate Rate of Interest

 

 

 

SECTION 2.13.

Increased Costs

 

 

 

SECTION 2.14.

Break Funding Payments

 

 

 

SECTION 2.15.

Taxes

 

 

 

SECTION 2.16.

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

 

 

 

SECTION 2.17.

Mitigation Obligations; Replacement of Lenders

 

 

 

 

 

 

 

ARTICLE III   REPRESENTATIONS AND WARRANTIES

 

 

 

 

 

 

 

SECTION 3.01.

Organization; Powers

 

 

SECTION 3.02.

Authorization; Enforceability

 

 

SECTION 3.03.

Governmental Approvals; No Conflicts

 

 

SECTION 3.04.

Financial Statements

 

 

SECTION 3.05.

Taxes

 

 

SECTION 3.06.

Litigation and Environmental Matters

 

 

SECTION 3.07.

Subsidiaries

 

 

SECTION 3.08.

ERISA

 

 

SECTION 3.09.

Accuracy of Information

 

 

SECTION 3.10.

Regulation U

 

 

SECTION 3.11.

Compliance with Laws and Agreements

 

 

SECTION 3.12.

Properties; Liens

 

 

SECTION 3.13.

Investment and Holding Company Status

 

 

SECTION 3.14.

Citizenship

 

 

i

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SECTION 3.15.

Status as Air Carrier

 

 

SECTION 3.16.

Pari Passu

 

 

 

 

 

ARTICLE IV  CONDITIONS

 

 

 

 

 

 

SECTION 4.01.

Effective Date

 

 

SECTION 4.02.

Each Credit Event

 

 

 

 

 

ARTICLE V  AFFIRMATIVE COVENANTS

 

 

 

 

 

 

SECTION 5.01.

Financial Statements and Other Information

 

 

SECTION 5.02.

Use of Proceeds

 

 

SECTION 5.03.

Notice of Material Events

 

 

SECTION 5.04.

Existence; Conduct of Business

 

 

SECTION 5.05.

Citizenship and Regulatory Certificates

 

 

SECTION 5.06.

Payment of Taxes

 

 

SECTION 5.07.

Compliance with Laws

 

 

SECTION 5.08.

Maintenance of Properties; Insurance

 

 

SECTION 5.09.

Books and Records; Inspection Rights

 

 

SECTION 5.10.

Leverage

 

 

SECTION 5.11.

Fixed Charge Coverage

 

 

SECTION 5.12.

Guarantee Agreement

 

 

 

 

 

ARTICLE VI  NEGATIVE COVENANTS

 

 

 

 

 

 

SECTION 6.01.

Liens

 

 

SECTION 6.02.

Restricted Investments

 

 

SECTION 6.03.

Merger and Consolidation

 

 

SECTION 6.04.

Sales of Assets

 

 

SECTION 6.05.

Loans, Advances and Investments

 

 

SECTION 6.06.

Contingent Liabilities

 

 

SECTION 6.07.

Negative Covenants in Subsidiary Agreements

 

 

SECTION 6.08.

Sales of Unrestricted Margin Stock

 

 

SECTION 6.09.

Subsidiary Indebtedness

 

 

SECTION 6.10.

Pre-Funded Commercial Paper and Pre-Funded Loans

 

 

 

 

 

ARTICLE VII  EVENTS OF DEFAULT

 

 

 

 

 

ARTICLE VIII  THE AGENTS

 

 

 

 

 

 

SECTION 8.01.

Appointment

 

 

SECTION 8.02.

Delegation of Duties

 

 

SECTION 8.03.

Exculpatory Provisions

 

 

SECTION 8.04.

Reliance by Administrative Agent

 

 

SECTION 8.05.

Notice of Default

 

 

SECTION 8.06.

Non-Reliance on Agents and Other Lenders

 

 

SECTION 8.07.

Indemnification

 

 

SECTION 8.08.

Agent in Its Individual Capacity

 

 

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SECTION 8.09.

Successor Administrative Agent

 

 

SECTION 8.10.

Co-Documentation Agents and Co-Syndication Agents

 

 

 

 

 

ARTICLE IX  MISCELLANEOUS

 

 

 

 

 

 

SECTION 9.01.

Amendments and Waivers

 

 

SECTION 9.02.

Notices

 

 

SECTION 9.03.

No Waiver; Cumulative Remedies

 

 

SECTION 9.04.

Survival of Representations and Warranties

 

 

SECTION 9.05.

Payment of Expenses and Taxes

 

 

SECTION 9.06.

Successors and Assigns; Participations and Assignments

 

 

SECTION 9.07.

Adjustments; Set-off

 

 

SECTION 9.08.

Counterparts

 

 

SECTION 9.09.

Severability

 

 

SECTION 9.10.

Integration

 

 

SECTION 9.11.

GOVERNING LAW

 

 

SECTION 9.12.

Submission To Jurisdiction; Waivers

 

 

SECTION 9.13.

Acknowledgements

 

 

SECTION 9.14.

Release of Guarantors

 

 

SECTION 9.15.

Confidentiality

 

 

SECTION 9.16.

WAIVERS OF JURY TRIAL

 

 

SECTION 9.17.

Interest Rate Limitation

 

 

SECTION 9.18.

Headings

 

 

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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 Counsel

 

Exhibit E

–

Form of Assignment and Acceptance

 

Exhibit F

–

Form of Exemption Certificate

 

 

iv

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CREDIT AGREEMENT dated as of February 11, 2004, among FEDEX CORPORATION, the
LENDERS party hereto, JPMORGAN CHASE BANK, as Administrative Agent, CITICORP
USA, INC. and BANK OF AMERICA, N.A., as Co-Syndication Agents, and BANK ONE, NA,
BANK OF TOKYO-MITSUBISHI TRUST COMPANY, COMMERZBANK A.G. and MERRILL LYNCH BANK
USA, 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.

 

“Acquisition” means any acquisition by any means, in one transaction or a series
of related transactions, by the Borrower or any of its Subsidiaries of (a) the
Capital Stock of any Person so long as, after giving effect to such acquisition,
such Person becomes a Subsidiary of the Borrower, (b) all or substantially all
of the assets of any other Person or (c) all or substantially all of the assets
constituting a business unit or business of any other Person.

 

“Acquisition Agreement” means the Agreement and Plan of Merger, dated as of
December 29, 2003, among the Borrower, Kinko’s, Keyway, Inc. and the Principal
Stockholders named therein, as amended, supplemented or otherwise modified from
time to time, and all schedules, exhibits and annexes thereto and agreements and
other documentation affecting the terms thereof.

 

“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 JPMorgan Chase 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.

 

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“Aggregate Exposure” means, 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” means, 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.

 

“Agreement” means this 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 ½ 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 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:

 

Category

 

Index Debt Ratings

 

ABR
Spread

 

Eurodollar
Spread

 

Facility Fee
Rate

 

 

 

 

 

 

 

 

 

 

 

Category 1

 

Rating > A- from S&P
or > A3 from Moody’s

 

0

%

0.300

%

0.075

%

Category 2

 

Rating = BBB+ from S&P
or = Baa1 from Moody’s

 

0

%

0.400

%

0.100

%

Category 3

 

Rating = BBB from S&P
or = Baa2 from Moody’s

 

0

%

0.500

%

0.125

%

Category 4

 

Rating = BBB- from S&P
or = Baa3 from Moody’s

 

0

%

0.825

%

0.175

%

Category 5

 

Rating < BBB- from S&P
and < Baa3 from Moody’s

 

0.150

%

1.150

%

0.225

%

 

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

 

2

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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 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 13d-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.

 

“Capital Markets Transaction” means the issuance or sale by the Borrower or any
of its Subsidiaries in a registered public offering, Rule 144A/Regulation S
transaction or private placement of

 

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Capital Stock (including equity-linked securities) or notes, debentures,
instruments or other debt securities with a maturity in excess of one year, in
each case to the extent any such issuance or sale or series of related issuances
or sales results in Net Cash Proceeds to the Borrower and its Subsidiaries of at
least $25,000,000; provided that, any such issuance or sale of Capital Stock of
the Borrower pursuant to any equity compensation plans or arrangements shall not
constitute a “Capital Markets Transaction.”

 

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

 

“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.

 

“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.

 

“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 2.13(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.

 

“Co-Documentation Agents” means the institutions listed in the preamble as
Co-Documentation Agents.

 

“Co-Syndication Agents” means the institutions listed in the preamble as
Co-Syndication Agents.

 

“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 from time to time pursuant to the terms
hereof.  The aggregate original amount of the Commitments on the Effective Date
is $2,000,000,000.

 

4

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“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 2.13, 2.14, 2.15, 2.16 or 9.05 than the designating
Lender would 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,

 

5

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(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.

 

“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.

 

6

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“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 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 Credit Agreements” means, collectively, the 364-Day Credit Agreement
and the Five-Year Credit Agreement.

 

“Existing Guarantee Agreements” means, collectively, the 364-Day Guarantee
Agreement, the Five-Year Guarantee Agreement and the Letter of Credit Guarantee
Agreement.

 

“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.

 

“Five-Year Credit Agreement” means the Five-Year Credit Agreement, dated as of
September 28, 2001, among the Borrower, the lenders party thereto and JPMorgan
Chase Bank, as administrative agent, as amended, supplemented or otherwise
modified from time to time.

 

“Five-Year Guarantee Agreement” means that certain Guaranty of the obligations
under the Five-Year Credit Agreement dated as of September 28, 2001, as amended,
supplemented or otherwise modified from time to time.

 

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“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.

 

“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 Guarantors as of the date hereof 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.

 

“Insufficiency” means, with respect to any Plan, the amount, if any, by which
the present value of the benefits under such Plan exceeds the fair market value
of the assets of such Plan allocable to such benefits, as determined using such
reasonable actuarial assumptions and methods as are specified in the
accountant’s report attached to the most recent annual report (Form 5500 Series)
filed with respect to such Plan.

 

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“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.

 

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the seventh day
thereafter or on the numerically corresponding day in the calendar month that is
one, two or three 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) in the case of any Eurodollar Borrowing with an Interest Period of one, two
or three months, 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.

 

“Kinko’s” means Kinko’s, Inc., a Delaware corporation.

 

“Kinko’s Acquisition” means the Acquisition of Kinko’s pursuant to the terms of
the Acquisition Agreement, as a result of which Kinko’s will become a
Wholly-Owned Subsidiary of the Borrower.

 

“Kinko’s Acquisition Conditions” means

 

(a) the consummation of the Kinko’s Acquisition in accordance with the terms of
the Acquisition Agreement, for aggregate cash consideration of $2,400,000,000
(subject to adjustment as provided in the Acquisition Agreement);

 

(b) the satisfaction of the Administration Agent with any amendments or waivers
to the Acquisition Agreement which are materially adverse to the interest of the
Lenders and which became or becomes effective on or prior to the date on which
the conditions in this definition are otherwise satisfied; and

 

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(c) the receipt by the Administrative Agent of evidence reasonably satisfactory
to it that (i) the Kinko’s Senior Secured Credit Agreement and the Kinko’s
Shareholder Facilities have been terminated and all amounts owing thereunder
have been repaid in full and (ii) all Liens securing Kinko’s Senior Secured
Credit Agreement and the Kinko’s Shareholder Facilities have been released.

 

“Kinko’s Senior Secured Credit Agreement” means the Credit Agreement, dated as
of April 5, 2000, among Kinko’s, certain subsidiaries of Kinko’s named therein,
JPMorgan Chase Bank, individually and as administrative agent and certain
lenders named therein, as amended, supplemented or otherwise modified from time
to time.

 

“Kinko’s Shareholder Facilities” means the (i) Loan Purchase Agreement, dated as
of June 30, 2000, between JPMorgan Chase Bank, Bank of America, N.A. and
Kinko’s; (ii) Limited Guaranty, dated as of June 30, 2000, between Bank of
America, N.A., Kinko’s and certain subsidiaries of Kinko’s; and (iii) individual
loan agreements, pledge agreements and demand notes of each stockholder of
Kinko’s pursuant to the foregoing as applicable.

 

“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.

 

“Letter of Credit Agreement” means the Amended and Restated Letter of Credit
Agreement, dated as of November 15, 2002, among the Borrower, the banks party
thereto and SunTrust Bank, as administrative agent, as amended, supplemented or
otherwise modified from time to time.

 

“Letter of Credit Guarantee Agreement” means that certain Guaranty of the
obligations under the Letter of Credit Agreement, dated as of November 15, 2002,
as amended, supplemented or otherwise modified from time to time.

 

“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 August 11, 2004, or if such date is not a Business Day,
the preceding 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.

 

“Net Cash Proceeds” means, in connection with any Capital Markets Transaction,
the actual cash proceeds received from the related issuance or sale, net of
attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.

 

“Non-Excluded Taxes” has the meaning assigned to such term in Section 2.15(a).

 

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“Non-U.S. Lender” has the meaning assigned to such term in Section 2.15(d).

 

“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 any 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.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

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“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.

 

“Pre-Funded Commercial Paper” means commercial paper issued by the Borrower
prior to the consummation of the Kinko’s Acquisition for the specific purpose of
financing a portion of the Kinko’s Acquisition, which commercial paper shall not
have maturities longer than 14 days following the issuance thereof.

 

“Pre-Funded Commercial Paper Loans” means Loans the proceeds of which are used
to repay Pre-Funded Commercial Paper.

 

“Pre-Funded Loans” means Loans made to the Borrower prior to the consummation of
the Kinko’s Acquisition for the specific purpose of financing a portion of the
Kinko’s Acquisition.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase 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 outstanding.

 

“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.

 

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“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 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.

 

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“Termination Event” means (i) a Reportable Event, (ii) the distribution of a
notice of intent to terminate a Plan pursuant to Section 4041(c)(1) of ERISA or
the treatment of a Plan amendment as a termination under Section 4041(e) of
ERISA, (iii) the institution of proceedings to terminate a Plan by the PBGC
under Section 4042 of ERISA, or (iv) any other event or condition that, as
reasonably determined by the Borrower in good faith, is reasonably likely to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.

 

“364-Day Credit Agreement” means the Amended and Restated 364-Day Credit
Agreement, dated as of September 27, 2002, among the Borrower, the lenders party
thereto and JPMorgan Chase Bank, as administrative agent, as amended,
supplemented or otherwise modified from time to time.

 

“364-Day Guarantee Agreement” means that certain Guaranty of the obligations
under the 364-Day Credit Agreement, dated as of September 27, 2002, as amended,
supplemented or otherwise modified from time to time.

 

“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.

 

“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 2.10(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 PRONOUN SHALL INCLUDE THE CORRESPONDING
MASCULINE, FEMININE AND NEUTER FORMS.  THE WORDS “INCLUDE”,

 

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“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 2.12, 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 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

 

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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 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,

 

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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;

 

(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

 

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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.

 

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

 

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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.                 OPTIONAL 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 AMOUNT OF $5,000,000 OR A WHOLE
MULTIPLE THEREOF.  PREPAYMENTS SHALL BE ACCOMPANIED BY ACCRUED INTEREST TO THE
EXTENT REQUIRED BY SECTION 2.11.

 

SECTION 2.09.                 MANDATORY REDUCTION OF COMMITMENTS AND PREPAYMENT
OF LOANS.  (A)  IF THE BORROWER OR ANY OF ITS SUBSIDIARIES CONSUMMATES ANY
CAPITAL MARKETS TRANSACTION WHICH RESULTS IN THE RECEIPT BY THE BORROWER OR ANY
OF ITS SUBSIDIARIES OF NET CASH PROCEEDS WITH RESPECT THERETO:

 

(i)                                     the Borrower shall prepay, on the
Business Day next succeeding the day on which such Net Cash Proceeds are
received, any outstanding Loans, with the amount of such prepayment being equal
to the lesser of (A) the amount of such Net Cash Proceeds and (B) the aggregate
outstanding principal amount of such Loans; and

 

(ii)                                  the Commitments shall automatically be
reduced in an amount equal to the lesser of (A) the amount of such Net Cash
Proceeds and (B) the aggregate amount of such Commitments.

 

The reduction of Commitments pursuant to the immediately preceding clause (ii)
shall become effective 30 days after the day on which such Net Cash Proceeds are
received; provided that if, at any time during such 30-day period, the aggregate
outstanding principal amount of commercial paper issued by the Borrower and its
Subsidiaries is equal to or less than the unused commitments under the Existing
Credit Agreements, then such reduction of Commitments shall become effective on
the Business Day next succeeding such time.

 

In addition, it is also understood and agreed that at no time shall the
aggregate principal amount of outstanding Loans exceed the aggregate amounts of
Commitments (after giving effect to any reductions of Commitments pursuant to
the immediately preceding clause (ii)) and that the Borrower shall prepay Loans,
only if and to the extent necessary, to comply with this sentence.

 

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(B)                                 AMOUNTS TO BE APPLIED TO PREPAYMENTS OF
LOANS PURSUANT TO SECTION 2.09(A) SHALL BE APPLIED, WITHOUT DUPLICATION, FIRST,
TO PREPAY ABR BORROWINGS, IF APPLICABLE, AND, SECOND, TO PREPAY EURODOLLAR
BORROWINGS.  EACH PREPAYMENT OF THE LOANS UNDER THIS SECTION 2.09 SHALL BE
ACCOMPANIED BY PAYMENT OF ACCRUED INTEREST TO THE DATE OF SUCH PREPAYMENT ON THE
AMOUNT PREPAID.  EACH REDUCTION OF COMMITMENTS OR PREPAYMENT UNDER THIS
SECTION 2.09 SHALL BE APPLIED RATABLY AMONG THE LENDERS IN ACCORDANCE WITH THEIR
RESPECTIVE COMMITMENTS OR, IF THE COMMITMENTS HAVE BEEN TERMINATED, OUTSTANDING
LOANS HELD BY THEM.

 

SECTION 2.10.                 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 EXCEEDS THE PRODUCT OF ONE-THIRD (1/3)
TIMES THE COMMITMENTS, 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.  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 2.11.                 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% 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.

 

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(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 2.12.                 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 2.13.                 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;

 

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.

 

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(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 2.14.                 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 2.17, 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 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.

 

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SECTION 2.15.                 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-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

 

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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 2.16.                 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 2.13, 2.14
OR 2.15, 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 2.13, 2.14, 2.15
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) 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

 

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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 2.16(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 2.17.                 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. 
(A)  IF ANY LENDER REQUESTS COMPENSATION UNDER SECTION 2.13, 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 2.15, 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 2.13 OR 2.15, 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 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 2.12, 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 2.14 WITH RESPECT TO LOANS OF SUCH LENDER OUTSTANDING ON THE EFFECTIVE
DATE OF AN ASSIGNMENT REQUIRED UNDER THIS SECTION 2.17(B), AS WELL AS FOR ALL
OTHER OBLIGATIONS OWED TO SUCH LENDER UNDER THIS AGREEMENT AS OF SUCH EFFECTIVE
DATE.

 

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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 CONSUMMATION
OF THE KINKO’S ACQUISITION IS WITHIN THE BORROWER’S CORPORATE POWERS AND
AUTHORITY AND HAS BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION.  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 AND THE CONSUMMATION OF THE KINKO’S ACQUISITION (A) DO NOT REQUIRE
ANY CONSENT OR APPROVAL OF, REGISTRATION OR FILING WITH, OR ANY OTHER ACTION BY,
ANY GOVERNMENTAL AUTHORITY, EXCEPT (I) WITH RESPECT TO THE TRANSACTIONS, SUCH AS
HAVE BEEN OBTAINED OR MADE AND ARE IN FULL FORCE AND EFFECT, AND (II) WITH
RESPECT TO THE CONSUMMATION OF THE KINKO’S ACQUISITION, (A) SUCH AS HAVE BEEN
OBTAINED OR MADE AND ARE IN FULL FORCE OR EFFECT, (B) THE FILING OF A
CERTIFICATE OF MERGER WITH THE DELAWARE SECRETARY OF STATE AND APPROPRIATE
DOCUMENTS WITH THE RELEVANT AUTHORITIES OF OTHER STATES IN WHICH THE BORROWER IS
QUALIFIED TO DO BUSINESS, (C) COMPLIANCE WITH ANY APPLICABLE REQUIREMENTS OF THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976 AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE “HSR ACT”) AND OF LAWS, RULES AND
REGULATIONS ANALOGOUS TO THE HSR ACT EXISTING IN FOREIGN JURISDICTIONS,
INCLUDING JAPAN, SOUTH KOREA AND CHINA, (D) COMPLIANCE WITH ANY APPLICABLE
SECURITIES LAWS, AND (E) ANY CONSENTS, APPROVALS, REGISTRATIONS OR FILINGS, THE
ABSENCE OF WHICH WOULD NOT BE REASONABLY EXPECTED TO MATERIALLY IMPAIR THE
ABILITY OF THE BORROWER TO CONSUMMATE THE KINKO’S ACQUISITION; (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 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, 2003, REPORTED ON BY ERNST & YOUNG LLP,
INDEPENDENT PUBLIC ACCOUNTANTS.  SUCH FINANCIAL STATEMENTS (INCLUDING THE NOTES
THERETO) PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE CONSOLIDATED FINANCIAL
CONDITION AND OPERATIONS OF THE BORROWER

 

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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, THE TRANSACTIONS OR THE
KINKO’S ACQUISITION.

 

(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 AS OF THE DATE HEREOF NOT PROVIDED FOR OR
DISCLOSED IN THE FINANCIAL STATEMENTS (INCLUDING THE NOTES THERETO) 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 SIGNIFICANT SUBSIDIARIES OF THE BORROWER AS OF THE
DATE HEREOF, 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 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

 

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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.  TO
THE EXTENT ANY OF THE REPRESENTATIONS OR WARRANTIES IN THIS SECTION 3.09 RELATE
TO INFORMATION PROVIDED OR PREPARED BY KINKO’S ON OR PRIOR TO THE DATE OF
CONSUMMATION OF THE KINKO’S ACQUISITION, SUCH REPRESENTATIONS AND WARRANTIES
SHALL BE SUBJECT TO THE QUALIFICATION THAT THEY ARE MADE BY THE BORROWER SUBJECT
TO THE ACTUAL KNOWLEDGE OF ITS SENIOR FINANCIAL OFFICERS (IT BEING UNDERSTOOD
THAT IN GIVING SUCH REPRESENTATIONS AND WARRANTIES WITH RESPECT TO KINKO’S, THE
BORROWER IS NOT UNDERTAKING ANY DILIGENCE OR INQUIRY WITH RESPECT TO KINKO’S IN
ADDITION TO THAT CONDUCTED BY THE BORROWER IN DETERMINING TO ACQUIRE KINKO’S).

 

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. §40102(A)(15) (A
“CITIZEN”).  EACH OTHER SUBSIDIARY THAT MUST 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

 

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TO 49 U.S.C. §41103 AND 49 U.S.C. §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
A WRITTEN OPINION FROM COUNSEL TO THE BORROWER, SUBSTANTIALLY IN THE FORM OF
EXHIBIT D.

 

(C)                                  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 AND THE
AUTHORIZATION OF THE TRANSACTIONS, ALL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND ITS COUNSEL.

 

(D)                                 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.

 

(E)                                  SINCE MAY 31, 2003, 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
TO SUCH EFFECT BY THE BORROWER AS OF THE EFFECTIVE DATE.

 

(F)                                    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

 

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OF THE LATEST FINANCIAL STATEMENTS DELIVERED PURSUANT TO CLAUSE (I) OF THIS
PARAGRAPH AS TO WHICH SUCH FINANCIAL STATEMENTS ARE AVAILABLE.

 

(G)                                 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 February 27, 2004 (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 (WHICH ARE SET FORTH IN ARTICLE III OF THIS AGREEMENT) SHALL BE TRUE
AND CORRECT ON AND AS OF THE DATE OF SUCH BORROWING (EXCEPT TO THE EXTENT THAT
ANY SUCH REPRESENTATION OR WARRANTY EXPRESSLY RELATES TO A SPECIFIED EARLIER
DATE, IN WHICH CASE SUCH REPRESENTATION OR WARRANTY SHALL BE TRUE AND CORRECT AS
OF SUCH EARLIER DATE).

 

(B)                                 AT THE TIME OF AND IMMEDIATELY AFTER GIVING
EFFECT TO SUCH BORROWING NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING;
PROVIDED THAT A DEFAULT UNDER SECTION 7(D) (IN RESPECT OF A FAILURE TO COMPLY
WITH SECTION 5.01(F)) AND UNDER SECTION 7(P) SHALL NOT APPLY TO ANY PRE-FUNDED
COMMERCIAL PAPER LOANS THE PROCEEDS OF WHICH ARE USED TO REPAY PRE-FUNDED
COMMERCIAL PAPER ISSUED PRIOR TO THE OCCURRENCE OF SUCH DEFAULT.

 

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.

 

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 ERNST & YOUNG 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

 

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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;

 

(F)                                    ON THE DATE OF ISSUANCE THEREOF OR WITHIN
TWO BUSINESS DAYS THEREAFTER, NOTICE OF THE ISSUANCE OF ANY PRE-FUNDED
COMMERCIAL PAPER (INCLUDING THE PRINCIPAL AMOUNT AND MATURITY THEREOF); PROVIDED
THAT, SUCH NOTICE NEED ONLY BE FURNISHED TO THE ADMINISTRATIVE AGENT; AND

 

(G)                                 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 TO FINANCE A PORTION OF THE KINKO’S ACQUISITION AND TO PAY RELATED FEES
AND EXPENSES OR TO SUPPORT COMMERCIAL PAPER ISSUED BY THE BORROWER TO FINANCE A
PORTION OF THE KINKO’S ACQUISITION AND TO PAY RELATED FEES AND EXPENSES AND FOR
OTHER GENERAL CORPORATE PURPOSES, INCLUDING, BUT NOT LIMITED TO, THE REPAYMENT
OF INDEBTEDNESS OF KINKO’S IN CONNECTION WITH THE CONSUMMATION OF THE KINKO’S
ACQUISITION; PROVIDED THAT, PRIOR TO THE CONSUMMATION OF THE KINKO’S
ACQUISITION, THE PROCEEDS OF THE LOANS SHALL ONLY BE AVAILABLE EITHER (A) TO
REPAY PRE-FUNDED COMMERCIAL PAPER OR (B) FOR THE PURPOSE OF BORROWING PRE-FUNDED
LOANS (WHICH SHALL BE MAINTAINED IN CASH OR PERMITTED INVESTMENTS PURSUANT TO
SECTION 6.10) PENDING THE USE THEREOF TO FINANCE THE KINKO’S ACQUISITION AND TO
OTHERWISE SATISFY THE KINKO’S ACQUISITION CONDITIONS.  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

 

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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 INCORPORATION AND MAINTAIN ALL REQUISITE AUTHORITY TO CONDUCT
ITS BUSINESS IN EACH JURISDICTION IN WHICH ITS BUSINESS IS CONDUCTED AND WHERE
THE FAILURE TO HAVE SUCH REQUISITE AUTHORITY COULD REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.

 

SECTION 5.05.                 CITIZENSHIP AND REGULATORY CERTIFICATES.  THE
BORROWER WILL CAUSE FEDERAL EXPRESS CORPORATION AND EACH OTHER APPLICABLE
SUBSIDIARY TO CONTINUE TO BE (A) A CITIZEN OF THE UNITED STATES, AS DEFINED IN
49 U.S.C. §40102(A)(15), (B) AUTHORIZED TO ENGAGE IN ALL CARGO DOMESTIC AND
INTERNATIONAL AIR SERVICE UNDER CERTIFICATES ISSUED PURSUANT TO 49 U.S.C. §41103
AND 49 U.S.C. §41102(A), RESPECTIVELY, (C) THE HOLDER OF ALL OTHER CERTIFICATES,
RIGHTS, PERMITS, FRANCHISES AND CONCESSIONS FROM APPROPRIATE GOVERNMENTAL
AUTHORITIES NECESSARY OR APPROPRIATE TO ENABLE THE BORROWER AND ITS SUBSIDIARIES
TO CONDUCT THEIR BUSINESS IN ALL MATERIAL RESPECTS AS PRESENTLY BEING CONDUCTED,
AND (D) 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.  THE
BORROWER WILL, AND WILL CAUSE EACH OF ITS SUBSIDIARIES TO, USE ITS BEST EFFORTS
TO MAINTAIN, PRESERVE AND KEEP IN FULL FORCE AND EFFECT ITS MATERIAL
CERTIFICATES, RIGHTS, PERMITS, FRANCHISES AND CONCESSIONS FROM APPROPRIATE
GOVERNMENTAL AUTHORITIES AND USE ITS BEST EFFORTS FROM TIME TO TIME TO OBTAIN
APPROPRIATE RENEWALS OR REPLACEMENTS, PROVIDED, THAT NOTHING IN THIS
SECTION 5.05 SHALL PREVENT THE BORROWER OR ANY OF ITS SUBSIDIARIES FROM
ABANDONING, OR PERMITTING THE AMENDMENT, EXPIRATION OR TERMINATION OF, ANY SUCH
CERTIFICATE, RIGHT, PERMIT, FRANCHISE OR CONCESSION IF, IN THE OPINION OF THE
BORROWER, SUCH ABANDONMENT, AMENDMENT, EXPIRATION OR TERMINATION IS IN THE
INTEREST OF THE BORROWER AND NOT PREJUDICIAL IN ANY MATERIAL RESPECT TO THE
LENDERS.

 

SECTION 5.06.                 PAYMENT OF TAXES.  THE BORROWER WILL, AND WILL
CAUSE EACH SUBSIDIARY TO, PAY AND DISCHARGE ALL TAXES, ASSESSMENTS AND
GOVERNMENTAL CHARGES OR LEVIES IMPOSED UPON IT OR UPON ITS INCOME OR PROFITS, OR
UPON ANY PROPERTY BELONGING TO IT, AND ALL LAWFUL CLAIMS WHICH, IF UNPAID, WOULD
BECOME A LIEN, EXCEPT WHERE FAILURE TO DO ANY OF THE FOREGOING WOULD NOT HAVE A
MATERIAL ADVERSE EFFECT AND PROVIDED THAT NEITHER THE BORROWER NOR A SUBSIDIARY
SHALL BE REQUIRED TO PAY ANY SUCH TAX, ASSESSMENT, CHARGE, LEVY OR CLAIM THE
PAYMENT OF WHICH IS BEING CONTESTED IN GOOD FAITH AND BY APPROPRIATE
PROCEEDINGS; AND MAKE MONTHLY ACCRUALS OF ALL OF THE ESTIMATED LIABILITY OF THE
BORROWER AND SUBSIDIARIES FOR SUCH TAXES, ASSESSMENTS, CHARGES AND LEVIES,
DETERMINED IN ACCORDANCE WITH GAAP, AND ESTABLISH ADEQUATE RESERVES DETERMINED
IN ACCORDANCE WITH GAAP, FOR SUCH THEREOF AS MAY BE CONTESTED, AND REFLECT SUCH
ACCRUALS AND RESERVES IN ALL FINANCIAL STATEMENTS FURNISHED HEREUNDER.

 

SECTION 5.07.                 COMPLIANCE WITH LAWS.  THE BORROWER WILL, AND WILL
CAUSE EACH OF ITS SUBSIDIARIES TO, COMPLY WITH ALL LAWS, RULES, REGULATIONS AND
ORDERS OF ANY GOVERNMENTAL AUTHORITY APPLICABLE TO 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.

 

SECTION 5.08.                 MAINTENANCE OF PROPERTIES; INSURANCE.  THE
BORROWER WILL, AND WILL CAUSE EACH OF ITS SIGNIFICANT SUBSIDIARIES TO, (A) KEEP
AND MAINTAIN ALL PROPERTY MATERIAL TO THE CONDUCT OF ITS BUSINESS IN GOOD
WORKING ORDER AND CONDITION, ORDINARY WEAR AND TEAR EXCEPTED, EXCEPT WHERE
FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT AND (B) MAINTAIN, WITH FINANCIALLY SOUND AND REPUTABLE INSURANCE
COMPANIES, INSURANCE ON ITS PROPERTY IN SUCH

 

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AMOUNTS AND AGAINST SUCH RISKS AS ARE CONSISTENT WITH PRUDENT BUSINESS PRACTICE,
AND THE BORROWER WILL FURNISH TO ANY LENDER UPON REQUEST FULL INFORMATION AS TO
THE INSURANCE CARRIED.

 

SECTION 5.09.                 BOOKS AND RECORDS; INSPECTION RIGHTS.  THE
BORROWER WILL, AND WILL CAUSE EACH OF ITS SUBSIDIARIES TO, KEEP PROPER BOOKS OF
RECORD AND ACCOUNT IN WHICH FULL, TRUE AND CORRECT ENTRIES ARE MADE OF ALL
DEALINGS AND TRANSACTIONS IN RELATION TO ITS BUSINESS AND ACTIVITIES.  THE
BORROWER WILL, AND WILL CAUSE EACH OF ITS SUBSIDIARIES TO, PERMIT ANY
REPRESENTATIVES DESIGNATED BY THE ADMINISTRATIVE AGENT OR ANY LENDER, UPON
REASONABLE PRIOR NOTICE, TO VISIT AND INSPECT ITS PROPERTIES, TO EXAMINE AND
MAKE EXTRACTS FROM ITS BOOKS OF ACCOUNTS AND OTHER FINANCIAL RECORDS, AND TO
DISCUSS ITS AFFAIRS, FINANCES AND CONDITION WITH ITS OFFICERS AND INDEPENDENT
ACCOUNTANTS, ALL AT SUCH REASONABLE TIMES AND INTERVALS AS THE LENDERS MAY
DESIGNATE.

 

SECTION 5.10.                 LEVERAGE.  THE BORROWER WILL MAINTAIN AT ALL TIMES
A RATIO OF (I) THE SUM OF (A) THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF ALL
OUTSTANDING FUNDED DEBT, PLUS (B) CAPITALIZED OPERATING LEASE VALUE, TO (II) THE
SUM OF (A) THE ITEMS LISTED IN CLAUSE (I) ABOVE PLUS (B) CONSOLIDATED ADJUSTED
NET WORTH, OF NOT MORE THAN .70 TO 1.

 

SECTION 5.11.                 FIXED CHARGE COVERAGE.  THE BORROWER WILL, FOR
EACH PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS OF THE BORROWER ENDING AFTER
AUGUST 31, 2003, MAINTAIN A RATIO OF (A) CONSOLIDATED CASH FLOW FOR SUCH PERIOD
TO (B) THE SUM OF INTEREST EXPENSE AND RENT EXPENSE FOR SUCH PERIOD, IN AN
AMOUNT NOT LESS THAN 1.25 TO 1.

 

SECTION 5.12.                 GUARANTEE AGREEMENT.  (A)  WITHIN THIRTY DAYS
AFTER (A) ACQUIRING OR ESTABLISHING ANY SUBSIDIARY THAT CONSTITUTES A
SIGNIFICANT SUBSIDIARY OR (B) ANY SUBSIDIARY (OTHER THAN FEDERAL EXPRESS
INTERNATIONAL (FRANCE) SNC) GUARANTEEING THE EXISTING CREDIT AGREEMENTS OR ANY
PUBLIC DEBT SECURITIES ISSUED BY THE BORROWER, UPON ITS ACQUISITION OR
ESTABLISHMENT OR THE ISSUANCE OF ANY SUCH GUARANTEE, AS THE CASE MAY BE, THE
BORROWER SHALL CAUSE SUCH SUBSIDIARY TO EXECUTE THE GUARANTEE AGREEMENT PURSUANT
TO AN ADDENDUM THERETO IN THE FORM OF ANNEX I TO THE GUARANTEE AGREEMENT, AND TO
DELIVER DOCUMENTATION, TO THE EXTENT REQUESTED BY THE ADMINISTRATIVE AGENT,
SIMILAR TO THAT DESCRIBED IN SECTION 4.01(B) AND (C) RELATING TO THE
AUTHORIZATION FOR, EXECUTION AND DELIVERY OF, AND VALIDITY OF SUCH SIGNIFICANT
SUBSIDIARY’S OBLIGATIONS AS A GUARANTOR, SUCH DOCUMENTATION TO BE IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(B)                                 IF AT ANY TIME THE GUARANTORS DO NOT CONSIST
OF SUBSIDIARIES OF THE BORROWER WHICH, IN THE AGGREGATE, HAD REVENUES
(DETERMINED IN ACCORDANCE WITH GAAP) FOR THE IMMEDIATELY PRECEDING FISCAL YEAR
OF THE BORROWER IN EXCESS OF 90% OF THE CONSOLIDATED REVENUES (DETERMINED IN
ACCORDANCE WITH GAAP) OF THE BORROWER AND THE CONSOLIDATED SUBSIDIARIES FOR SUCH
IMMEDIATELY PRECEDING FISCAL YEAR AFTER GIVING EFFECT TO ANY ACQUISITIONS, THEN
THE BORROWER SHALL PROMPTLY CAUSE ONE OR MORE ADDITIONAL SUBSIDIARIES EACH TO
EXECUTE THE GUARANTEE AGREEMENT PURSUANT TO AN ADDENDUM THERETO IN THE FORM OF
ANNEX I TO THE GUARANTEE AGREEMENT, AND TO DELIVER DOCUMENTATION, TO THE EXTENT
REQUESTED BY THE ADMINISTRATIVE AGENT, SIMILAR TO THAT DESCRIBED IN
SECTION 4.01(B) AND (C) RELATING TO THE AUTHORIZATION FOR, EXECUTION AND
DELIVERY OF, AND VALIDITY OF SUCH SUBSIDIARY’S OBLIGATIONS AS A GUARANTOR, SUCH
DOCUMENTATION TO BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT, SO THAT THE AGGREGATE CONSOLIDATED REVENUES (DETERMINED IN
ACCORDANCE WITH GAAP) OF THE GUARANTORS FOR SUCH FISCAL YEAR EQUAL OR EXCEED 90%
OF THE CONSOLIDATED REVENUES (DETERMINED IN ACCORDANCE WITH GAAP) OF THE
BORROWER AND THE CONSOLIDATED SUBSIDIARIES FOR SUCH FISCAL YEAR.

 

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ARTICLE VI

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Borrower covenants and agrees with the Lenders that:

 

SECTION 6.01.                 LIENS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT
ANY CONSOLIDATED SUBSIDIARY TO, CREATE, INCUR, ASSUME OR SUFFER TO EXIST, ANY
LIEN ON, OR ENTER INTO, OR MAKE ANY COMMITMENT TO ENTER INTO, ANY ARRANGEMENT
FOR THE ACQUISITION OF, ANY PROPERTY (OTHER THAN UNRESTRICTED MARGIN STOCK)
THROUGH CONDITIONAL SALES, LEASE-PURCHASE OR OTHER TITLE RETENTION AGREEMENT,
EXCEPT:

 

(A)                                  LIENS WHICH MAY BE HEREAFTER CREATED TO
SECURE PAYMENT OF THE OBLIGATIONS;

 

(B)                                 LIENS INCURRED OR DEPOSITS OR PLEDGES, MADE
IN THE ORDINARY COURSE OF BUSINESS, TO SECURE PAYMENT OF WORKERS’ COMPENSATION,
UNEMPLOYMENT INSURANCE, OLD AGE PENSIONS OR OTHER SOCIAL SECURITY OBLIGATIONS;

 

(C)                                  LIENS INCURRED OR DEPOSITS OR PLEDGES, MADE
IN THE ORDINARY COURSE OF BUSINESS, TO SECURE PERFORMANCE OF BIDS, TENDERS,
CONTRACTS (OTHER THAN CONTRACTS FOR INDEBTEDNESS), LEASES, PUBLIC OR STATUTORY
OBLIGATIONS, SURETY BONDS, OR OTHER LIENS OR DEPOSITS OR PLEDGES FOR PURPOSES OF
LIKE GENERAL NATURE MADE IN THE ORDINARY COURSE OF BUSINESS;

 

(D)                                 DEPOSITS OR PLEDGES FOR THE PURPOSE OF
SECURING AN APPEAL, STAY OR DISCHARGE IN THE COURSE OF LEGAL PROCEEDINGS, OR
LIENS FOR JUDGMENTS OR AWARDS WHICH WERE NOT INCURRED IN CONNECTION WITH
INDEBTEDNESS OR THE OBTAINING OF ADVANCES OR CREDITS, PROVIDED SUCH DEPOSITS,
PLEDGES AND LIENS DO NOT, IN THE AGGREGATE FOR THE BORROWER AND THE CONSOLIDATED
SUBSIDIARIES, MATERIALLY DETRACT FROM THE VALUE OF THEIR ASSETS OR PROPERTIES OR
MATERIALLY IMPAIR THE USE THEREOF IN THE ORDINARY COURSE OF BUSINESS AND SUCH
APPEAL, JUDGMENT OR AWARD, AS THE CASE MAY BE, IS BEING DILIGENTLY CONTESTED OR
LITIGATED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS BEING DILIGENTLY CONDUCTED,
AND PROVIDED FURTHER THERE HAS BEEN SET ASIDE ON THE BOOKS OF THE BORROWER OR
THE CONSOLIDATED SUBSIDIARIES, AS THE CASE MAY BE, RESERVES IN ACCORDANCE WITH
GAAP WITH RESPECT THERETO, WHICH RESERVES SHALL BE MAINTAINED UNTIL THE RELATED
LIABILITIES ARE PAID OR OTHERWISE DISCHARGED, AND PROVIDED FURTHER EXECUTION IS
NOT LEVIED UPON ANY SUCH JUDGMENT OR AWARD;

 

(E)                                  LIENS FOR TAXES, FEES, ASSESSMENTS AND
GOVERNMENTAL CHARGES NOT DELINQUENT OR WHICH ARE BEING CONTESTED IN GOOD FAITH
BY APPROPRIATE PROCEEDINGS BEING DILIGENTLY CONDUCTED, PROVIDED THERE HAS BEEN
SET ASIDE ON THE BOOKS OF THE BORROWER OR THE CONSOLIDATED SUBSIDIARIES, AS THE
CASE MAY BE, ADEQUATE RESERVES IN ACCORDANCE WITH GAAP WITH RESPECT THERETO,
WHICH RESERVES SHALL BE MAINTAINED UNTIL THE RELATED LIABILITIES ARE PAID OR
OTHERWISE DISCHARGED, AND PROVIDED FURTHER, EXECUTION IS NOT LEVIED UPON ANY
SUCH LIEN;

 

(F)                                    MECHANICS’, CARRIERS’, WORKERS’,
REPAIRMEN’S OR OTHER LIKE LIENS ARISING IN THE ORDINARY COURSE OF BUSINESS
SECURING OBLIGATIONS WHICH ARE NOT OVERDUE FOR A PERIOD OF MORE THAN 90 CALENDAR
DAYS, OR WHICH ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS
BEING DILIGENTLY CONDUCTED PROVIDED THERE HAS BEEN SET ASIDE ON THE BOOKS OF THE
BORROWER AND THE CONSOLIDATED SUBSIDIARIES, AS THE CASE MAY BE, ADEQUATE
RESERVES IN ACCORDANCE WITH GAAP WITH RESPECT THERETO, WHICH RESERVES SHALL BE
MAINTAINED UNTIL THE RELATED LIABILITIES ARE PAID OR OTHERWISE DISCHARGED, AND
PROVIDED FURTHER, EXECUTION IS NOT LEVIED UPON ANY SUCH LIEN;

 

(G)                                 LESSORS’ INTERESTS UNDER CAPITALIZED LEASES;

 

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(H)                                 LIENS ON PROPERTY ACQUIRED OR CONSTRUCTED
WITH THE PROCEEDS OF ANY TAX-EXEMPT BOND FINANCING TO SECURE SUCH FINANCING;

 

(I)                                     LIENS SECURING INDEBTEDNESS OF A
CONSOLIDATED SUBSIDIARY TO THE BORROWER OR ANY GUARANTOR OR, IN THE CASE OF
INDEBTEDNESS OF A CONSOLIDATED SUBSIDIARY WHICH IS NOT A GUARANTOR, TO ANY
CONSOLIDATED SUBSIDIARY WHICH IS NOT A GUARANTOR;

 

(J)                                     LIENS EXISTING ON THE PROPERTY OF A
CORPORATION OR OTHER BUSINESS ENTITY IMMEDIATELY PRIOR TO ITS BEING CONSOLIDATED
WITH OR MERGED INTO THE BORROWER OR A CONSOLIDATED SUBSIDIARY OR ITS BECOMING A
CONSOLIDATED SUBSIDIARY, OR LIENS EXISTING ON ANY PROPERTY ACQUIRED BY THE
BORROWER OR A CONSOLIDATED SUBSIDIARY AT THE TIME SUCH IS SO ACQUIRED (WHETHER
OR NOT THE INDEBTEDNESS SECURED THEREBY SHALL HAVE BEEN ASSUMED), PROVIDED THAT
(I) NO SUCH LIEN WAS CREATED OR ASSUMED IN CONTEMPLATION OF SUCH CONSOLIDATION
OR MERGER OR SUCH ENTITY’S BECOMING A CONSOLIDATED SUBSIDIARY OR SUCH
ACQUISITION OF PROPERTY AND (II) EACH SUCH LIEN SHALL ONLY COVER THE ACQUIRED
PROPERTY AND, IF REQUIRED BY THE TERMS OF THE INSTRUMENT ORIGINALLY CREATING
SUCH LIEN, PROPERTY WHICH IS AN IMPROVEMENT TO OR IS ACQUIRED FOR SPECIFIC USE
IN CONNECTION WITH SUCH ACQUIRED PROPERTY;

 

(K)                                  LIENS ON FLIGHT EQUIPMENT ACQUIRED ON OR
AFTER THE DATE OF THIS AGREEMENT WHICH (I) SECURE THE PAYMENT OF ALL OR ANY PART
OF THE PURCHASE PRICE OF SUCH FLIGHT EQUIPMENT OR IMPROVEMENTS THEREON, (II) ARE
LIMITED TO THE FLIGHT EQUIPMENT SO ACQUIRED AND IMPROVEMENTS THEREON, AND (III)
ATTACH TO SUCH FLIGHT EQUIPMENT WITHIN ONE YEAR AFTER THE ACQUISITION OR
IMPROVEMENT OF SUCH FLIGHT EQUIPMENT;

 

(L)                                     LIENS IN FAVOR OF CUSTOMS AND REVENUE
AUTHORITIES ARISING AS A MATTER OF LAW TO SECURE PAYMENT OF CUSTOMS DUTIES IN
CONNECTION WITH THE IMPORTATION OF GOODS;

 

(M)                               ZONING, BUILDING OR OTHER RESTRICTIONS,
VARIANCES, COVENANTS, RIGHTS OF WAY, ENCUMBRANCES, EASEMENTS AND OTHER MINOR
IRREGULARITIES IN TITLE, NONE OF WHICH, INDIVIDUALLY OR IN THE AGGREGATE, (I)
INTERFERE IN ANY MATERIAL RESPECT WITH THE PRESENT USE OR OCCUPANCY OF THE
AFFECTED PARCEL BY THE BORROWER OR ANY SUBSIDIARY, (II) HAVE NO MORE THAN AN
IMMATERIAL EFFECT ON THE VALUE THEREOF OR ITS USE OR (III) WOULD IMPAIR THE
ABILITY OF SUCH PARCEL TO BE SOLD FOR ITS PRESENT USE;

 

(N)                                 LIENS ARISING SOLELY BY VIRTUE OF ANY LAW OR
REGULATION RELATING TO BANKER’S LIENS, RIGHTS OF SET-OFF OR SIMILAR RIGHTS AND
REMEDIES AS TO DEPOSIT ACCOUNTS OR OTHER FUNDS MAINTAINED WITH A CREDITOR
DEPOSITORY INSTITUTION;

 

(O)                                 LIENS TO SECURE INDEBTEDNESS FOR THE PURPOSE
OF FINANCING ALL OR ANY PART OF THE PURCHASE PRICE OR THE COST OF CONSTRUCTION
OR IMPROVEMENT OF THE PROPERTY SUBJECT TO SUCH LIEN; PROVIDED, HOWEVER, THAT (I)
THE PRINCIPAL AMOUNT OF ANY INDEBTEDNESS SECURED BY SUCH LIEN DOES NOT EXCEED
100% OF SUCH PURCHASE PRICE OR COST AND (II) SUCH LIEN DOES NOT EXTEND TO OR
COVER ANY OTHER PROPERTY OTHER THAN SUCH ITEM OF PROPERTY SO ACQUIRED,
CONSTRUCTED OR IMPROVED;

 

(P)                                 LIENS ARISING OUT OF THE REFINANCING,
EXTENSION, RENEWAL OR REFUNDING OF ANY INDEBTEDNESS SECURED BY ANY LIEN
PERMITTED BY CLAUSES (H), (J), (K) AND (O) OF THIS SECTION, PROVIDED THAT SUCH
INDEBTEDNESS IS NOT INCREASED AND IS NOT SECURED BY ANY ADDITIONAL ASSETS; AND

 

(Q)                                 LIENS NOT OTHERWISE PERMITTED BY SECTIONS
6.01 (A) THROUGH (P) PROVIDED THAT, AS OF THE DATE ANY LIEN IS INCURRED AND AS
OF THE END OF EACH FISCAL QUARTER OF THE BORROWER ENDING AFTER AUGUST 31, 2003,
THE SUM OF (I) THE AGGREGATE PRINCIPAL AMOUNT OF ALL OUTSTANDING LONG TERM DEBT
OF THE CONSOLIDATED SUBSIDIARIES WHICH ARE NOT GUARANTORS (EXCLUDING THE CURRENT
MATURITIES OF ANY SUCH LONG TERM DEBT AND ANY LONG TERM DEBT OF A CONSOLIDATED
SUBSIDIARY OWING TO THE BORROWER), PLUS (II) THE AGGREGATE PRINCIPAL AMOUNT OF
ALL OUTSTANDING LONG TERM DEBT OF THE BORROWER OR ANY GUARANTOR

 

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(EXCLUDING THE CURRENT MATURITIES OF ANY SUCH LONG TERM DEBT AND ANY LONG TERM
DEBT OF A CONSOLIDATED SUBSIDIARY OWING TO THE BORROWER) WHICH IS SECURED AS
PERMITTED BY THIS SECTION 6.01(Q), DOES NOT EXCEED 8% OF CONSOLIDATED ADJUSTED
TOTAL ASSETS.

 

SECTION 6.02.                 RESTRICTED INVESTMENTS.  THE BORROWER WILL NOT,
NOR WILL IT PERMIT ANY CONSOLIDATED SUBSIDIARY TO, MAKE ANY RESTRICTED
INVESTMENT EXCEPT RESTRICTED INVESTMENTS MADE BY THE BORROWER OR A CONSOLIDATED
SUBSIDIARY SO LONG AS, AFTER GIVING EFFECT TO ANY SUCH RESTRICTED INVESTMENT
(I) THE AGGREGATE AMOUNT OF ALL SUCH RESTRICTED INVESTMENTS EXISTING ON THE DATE
OF SUCH PROPOSED ACTION SHALL NOT EXCEED (X) $750,000,000 PLUS (Y) 75% (OR IN
THE CASE OF A DEFICIT, MINUS 100%) OF THE CONSOLIDATED NET INCOME FOR THE PERIOD
COMMENCING ON JUNE 1, 2001 AND ENDING ON AND INCLUDING THE DATE OF ANY SUCH
PROPOSED ACTION (THE “COMPUTATION PERIOD”) PLUS (Z) THE AGGREGATE AMOUNT OF THE
NET CASH PROCEEDS (OTHER THAN ANY NET CASH PROCEEDS OF ANY CAPITAL MARKETS
TRANSACTION REQUIRED TO BE USED TO REDUCE THE COMMITMENTS PURSUANT TO
SECTION 2.09) RECEIVED BY THE BORROWER DURING THE COMPUTATION PERIOD FROM THE
SALE OF ITS STOCK AND INDEBTEDNESS OF THE BORROWER CONVERTIBLE INTO STOCK OF THE
BORROWER (BUT ONLY TO THE EXTENT THAT ANY SUCH INDEBTEDNESS HAS BEEN CONVERTED
INTO SHARES OF SUCH STOCK DURING SUCH PERIOD), AND (II) THERE SHALL EXIST NO
DEFAULT OR EVENT OF DEFAULT.

 

SECTION 6.03.                 MERGER AND CONSOLIDATION.  THE BORROWER WILL NOT,
NOR WILL IT PERMIT ANY CONSOLIDATED SUBSIDIARY TO, MERGE OR CONSOLIDATE WITH OR
INTO OR ENTER INTO ANY ANALOGOUS REORGANIZATION OR TRANSACTION WITH ANY OTHER
PERSON, OR SELL ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES TAKEN AS A WHOLE, EXCEPT:

 

(A)                                  ANY CONSOLIDATED SUBSIDIARY OR OTHER
CORPORATION OR ENTITY MAY MERGE OR CONSOLIDATE WITH THE BORROWER, PROVIDED THAT,
AFTER GIVING EFFECT TO ANY SUCH MERGER OR CONSOLIDATION, (I) THE BORROWER SHALL
BE THE CONTINUING OR SURVIVING CORPORATION AND (II) NO DEFAULT OR EVENT OF
DEFAULT SHALL EXIST;

 

(B)                                 ANY CONSOLIDATED SUBSIDIARY MAY MERGE WITH
OR INTO ANY CONSOLIDATED SUBSIDIARY SO LONG AS, AFTER GIVING EFFECT THERETO, NO
DEFAULT OR EVENT OF DEFAULT SHALL EXIST;

 

(C)                                  THE BORROWER OR ANY CONSOLIDATED SUBSIDIARY
MAY TRANSFER ITS ASSETS TO THE BORROWER OR ANY CONSOLIDATED SUBSIDIARY, SO LONG
AS AFTER GIVING EFFECT THERETO, NO DEFAULT OR EVENT OF DEFAULT SHALL EXIST;

 

(D)                                 ANY CONSOLIDATED SUBSIDIARY OTHER THAN A
SIGNIFICANT SUBSIDIARY MAY BE LIQUIDATED OR DISSOLVED; AND

 

(E)                                  ANY CORPORATION OR OTHER ENTITY MAY MERGE
OR CONSOLIDATE WITH ANY CONSOLIDATED SUBSIDIARY, PROVIDED THAT, AFTER GIVING
EFFECT TO ANY SUCH MERGER OR CONSOLIDATION, (I) THE CONTINUING OR SURVIVING
ENTITY SHALL BE A CONSOLIDATED SUBSIDIARY, (II) NO DEFAULT OR EVENT OF DEFAULT
SHALL EXIST, AND (III) THE BORROWER OWNS, DIRECTLY OR INDIRECTLY, 100% OF SUCH
CONSOLIDATED SUBSIDIARY; PROVIDED, FURTHER, THAT THE REQUIREMENTS OF CLAUSES (I)
AND (III) WILL NOT APPLY TO A MERGER OR CONSOLIDATION OF ANY CONSOLIDATED
SUBSIDIARY IN CONNECTION WITH A TRANSACTION PERMITTED UNDER SECTION 6.04(C).

 

SECTION 6.04.                 SALES OF ASSETS.  THE BORROWER WILL NOT, NOR WILL
IT PERMIT ANY CONSOLIDATED SUBSIDIARY TO, SELL, TRANSFER, CONVEY (INCLUDING,
WITHOUT LIMITATION, ANY SALE, TRANSFER OR CONVEYANCE RELATED TO A SALE AND
LEASEBACK TRANSACTION BUT EXCLUDING SALES OF INVENTORY IN THE ORDINARY COURSE OF
BUSINESS) OR LEASE (OR ENTER INTO ANY COMMITMENT TO SELL TRANSFER, CONVEY OR
LEASE) ALL OR ANY PART OF ITS ASSETS (OTHER THAN UNRESTRICTED MARGIN STOCK)
(WHETHER IN ONE OR A SERIES OF TRANSACTIONS) EXCEPT:

 

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(A)                                  LEASES BY THE BORROWER AND CONSOLIDATED
SUBSIDIARIES OF FLIGHT EQUIPMENT TO OTHERS PROVIDED THAT THE AGGREGATE BOOK
VALUE OF ALL FLIGHT EQUIPMENT LEASED TO ANY OTHER PERSON OR PERSONS BY THE
BORROWER OR ANY SUCH CONSOLIDATED SUBSIDIARY SHALL NOT AT ANY TIME EXCEED
$500,000,000;

 

(B)                                 SALES OF PROPERTY BY THE BORROWER OR A
CONSOLIDATED SUBSIDIARY PROVIDED THAT AT THE TIME OF ANY SUCH SALE OR OTHER
DISPOSITION THE BORROWER OR CONSOLIDATED SUBSIDIARY MAKING SUCH SALE OR
DISPOSITION SHALL HAVE PREVIOUSLY ACQUIRED OR SHALL BE SIMULTANEOUSLY ACQUIRING,
IN CONTEMPLATION OF SUCH SALE OR OTHER DISPOSITION, SUBSTANTIALLY SIMILAR
PROPERTY, OR SHALL HAVE PREVIOUSLY ENTERED INTO, OR SHALL BE SIMULTANEOUSLY
ENTERING INTO, A BINDING PURCHASE AGREEMENT OR PURCHASE AGREEMENTS TO ACQUIRE
SUBSTANTIALLY SIMILAR PROPERTY, WHICH PROPERTY IS ACQUIRED WITHIN THREE YEARS OF
SUCH SALE OR OTHER DISPOSITION;

 

(C)                                  SALES OF PROPERTY (INCLUDING ANY DEEMED
SALES OF PROPERTY PURSUANT TO SECTION 6.03(E)) PROVIDED THAT THE AGGREGATE NET
BOOK VALUE OF ALL SUCH PROPERTY SOLD IN ANY ONE FISCAL YEAR OF THE BORROWER
SHALL NOT EXCEED 12.5% OF CONSOLIDATED ADJUSTED NET WORTH AS OF THE LAST DAY OF
THE FISCAL YEAR OF THE BORROWER IMMEDIATELY PRECEDING THE FISCAL YEAR OF THE
BORROWER DURING WHICH ANY SUCH SALE OF ASSETS SHALL TAKE PLACE;

 

(D)                                 SALES OF ANY PROPERTY IN ORDER CONCURRENTLY
OR SUBSEQUENTLY TO LEASE AS LESSEE SUCH OR SIMILAR PROPERTY, PROVIDED THAT (I)
ANY SUCH SALE TAKES PLACE WITHIN 360 DAYS AFTER (A) IN THE CASE OF PERSONAL
PROPERTY, THE DATE ON WHICH THE BORROWER OR THE APPLICABLE CONSOLIDATED
SUBSIDIARY ACQUIRED SUCH PROPERTY, AND (B) IN THE CASE OF REAL PROPERTY OR
FIXTURES, THE LATER OF THE DATE ON WHICH THE BORROWER OR THE APPLICABLE
CONSOLIDATED SUBSIDIARY ACQUIRED SUCH PROPERTY OR THE DATE ON WHICH CONSTRUCTION
OF ALL IMPROVEMENTS ON SUCH PROPERTY WAS COMPLETED, AND (II) AFTER GIVING EFFECT
TO THE CREATION OF THE CAPITALIZED LEASE OBLIGATIONS, IF ANY, OF THE BORROWER OR
A CONSOLIDATED SUBSIDIARY RESULTING FROM THE LEASE OF SUCH PROPERTY BY THE
BORROWER OR A CONSOLIDATED SUBSIDIARY, THE BORROWER IS IN COMPLIANCE WITH
SECTION 5.10; AND

 

(E)                                  TRANSFERS OF ASSETS PERMITTED PURSUANT TO
SECTION 6.03.

 

Notwithstanding the foregoing in this Section 6.04, the Borrower and its
consolidated Subsidiaries will be permitted to sell, transfer or otherwise
dispose of Unrestricted Margin Stock without regard to the foregoing
restrictions contained in this Section 6.04.

 

SECTION 6.05.                 LOANS, ADVANCES AND INVESTMENTS.  THE BORROWER
WILL NOT, NOR WILL IT PERMIT ANY CONSOLIDATED SUBSIDIARY TO, MAKE OR SUFFER TO
EXIST ANY INVESTMENTS, OR COMMITMENTS THEREFOR, EXCEPT:

 

(A)                                  INVESTMENTS IN PERMITTED INVESTMENTS;

 

(B)                                 INVESTMENTS IN THE CAPITAL STOCK OF A
CONSOLIDATED SUBSIDIARY;

 

(C)                                  LOANS AND ADVANCES BY THE BORROWER TO A
CONSOLIDATED SUBSIDIARY;

 

(D)                                 LOANS AND ADVANCES BY A CONSOLIDATED
SUBSIDIARY TO ANY OTHER CONSOLIDATED SUBSIDIARY OR TO THE BORROWER;

 

(E)                                  INVESTMENTS IN ANY PERSON NOT OTHERWISE
PERMITTED BY THIS SECTION 6.05, WHICH TOGETHER WITH ALL OTHER INVESTMENTS AT THE
TIME OUTSTANDING UNDER THIS SECTION 6.05(E), DO NOT EXCEED 12.5% OF CONSOLIDATED
ADJUSTED NET WORTH PROVIDED THAT AT LEAST 66-2/3% OF SUCH INVESTMENTS ARE

 

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REASONABLY RELATED TO THE SAME FIELDS OF ENTERPRISE AS THOSE IN WHICH THE
BORROWER AND THE CONSOLIDATED SUBSIDIARIES ARE NOW ENGAGED;

 

(F)                                    ACQUISITIONS (INCLUDING, WITHOUT
LIMITATION, THE KINKO’S ACQUISITION), PROVIDED THAT NO DEFAULT OR EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR WOULD RESULT THEREFROM; AND

 

(G)                                 RESTRICTED INVESTMENTS MADE IN COMPLIANCE
WITH SECTION 6.02.

 

In determining from time to time the amount of the Investments permitted by this
Section 6.05, loans and advances shall be taken at the principal amount thereof
then remaining unpaid at the time of such determination and other Investments
shall be taken at the original cost thereof, regardless of any subsequent
appreciation or depreciation therein.

 

SECTION 6.06.                 CONTINGENT LIABILITIES.  THE BORROWER WILL NOT,
NOR WILL IT PERMIT ANY CONSOLIDATED SUBSIDIARY TO BECOME LIABLE WITH RESPECT TO
ANY CONTINGENT OBLIGATION, EXCEPT:

 

(A)                                  THE GUARANTEE AGREEMENT AND THE EXISTING
GUARANTEE AGREEMENTS;

 

(B)                                 BY THE ENDORSEMENT OF NEGOTIABLE INSTRUMENTS
FOR DEPOSIT OR COLLECTION (OR SIMILAR TRANSACTIONS) IN THE ORDINARY COURSE OF
BUSINESS;

 

(C)                                  GUARANTIES OF CUSTOMS FEES IN THE ORDINARY
COURSE OF BUSINESS;

 

(D)                                 CONTINGENT OBLIGATIONS IN RESPECT OF SURETY
AND APPEAL BONDS AND SIMILAR OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF
BUSINESS;

 

(E)                                  CONTINGENT OBLIGATIONS WITH RESPECT TO
LETTERS OF CREDIT ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS, PROVIDED THAT
THE AGGREGATE AMOUNT OF SUCH LETTERS OF CREDIT SHALL NOT EXCEED $200,000,000 AT
ANY TIME OUTSTANDING;

 

(F)                                    CONTINGENT OBLIGATIONS IN RESPECT OF
OBLIGATIONS (OTHER THAN INDEBTEDNESS) OF WHOLLY-OWNED SUBSIDIARIES INCURRED IN
THE ORDINARY COURSE OF BUSINESS; AND

 

(G)                                 ANY OTHER CONTINGENT OBLIGATION WHICH AFTER
HAVING GIVEN EFFECT THERETO WOULD NOT CAUSE THE BORROWER TO FAIL TO BE IN
COMPLIANCE WITH SECTION 5.10.

 

In determining from time to time the amount of guaranties and contingent
liabilities permitted by this Section 6.06, guaranties and contingent
liabilities shall be taken at the principal amount then remaining unpaid at the
time of such determination on the indebtedness and obligations so guaranteed or
related to such contingent liabilities.

 

SECTION 6.07.                 NEGATIVE COVENANTS IN SUBSIDIARY AGREEMENTS.  THE
BORROWER WILL NOT PERMIT ANY OF ITS SUBSIDIARIES TO ENTER INTO, AFTER THE DATE
HEREOF, ANY AGREEMENT, INSTRUMENT OR INDENTURE THAT, DIRECTLY OR INDIRECTLY,
CONTAINS NEGATIVE COVENANTS RESTRICTING ANY OF THE FOLLOWING (OR OTHERWISE
PROHIBITS OR RESTRICTS, OR HAS THE EFFECT OF PROHIBITING OR RESTRICTING, ANY OF
THE FOLLOWING):

 

(A)                                  THE INCURRENCE OR PAYMENT OF INDEBTEDNESS
OWED TO THE BORROWER OR ANY OTHER SUBSIDIARY OF THE BORROWER;

 

(B)                                 THE GRANTING OF LIENS, PROVIDED THAT THE
FOREGOING SHALL NOT APPLY TO (I) RESTRICTIONS AND CONDITIONS IMPOSED BY LAW OR
BY THIS AGREEMENT; (II) RESTRICTIONS AND CONDITIONS

 

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EXISTING ON THE DATE HEREOF (BUT SHALL APPLY TO ANY EXTENSION OR RENEWAL OF, OR
ANY AMENDMENT OR MODIFICATION EXPANDING THE SCOPE OF, ANY SUCH RESTRICTION OR
CONDITION), (III) CUSTOMARY RESTRICTIONS AND CONDITIONS CONTAINED IN AGREEMENTS
RELATING TO THE SALE OF A SUBSIDIARY PENDING SUCH SALE, PROVIDED SUCH
RESTRICTIONS AND CONDITIONS APPLY ONLY TO THE SUBSIDIARY THAT IS TO BE SOLD AND
SUCH SALE IS PERMITTED HEREUNDER, (IV) RESTRICTIONS OR CONDITIONS IMPOSED BY ANY
AGREEMENT RELATING TO SECURED INDEBTEDNESS PERMITTED BY THIS AGREEMENT IF SUCH
RESTRICTIONS OR CONDITIONS APPLY ONLY TO THE PROPERTY OR ASSETS SECURING SUCH
INDEBTEDNESS AND (V) CUSTOMARY PROVISIONS IN LEASES AND OTHER CONTRACTS
RESTRICTING THE ASSIGNMENT THEREOF AND CUSTOMARY TRANSFER RESTRICTIONS AND
RIGHTS OF FIRST REFUSAL IN SHAREHOLDERS’ AGREEMENTS IN EXISTENCE ON THE DATE
HEREOF OR CONSISTENT WITH PAST PRACTICE;

 

(C)                                  THE DECLARATION OR PAYMENT OF DIVIDENDS;
AND

 

(D)                                 THE MAKING OF LOANS, ADVANCES OR OTHER
INVESTMENTS TO OR IN THE BORROWER OR ANY OTHER SUBSIDIARY OF THE BORROWER.

 

SECTION 6.08.                 SALES OF UNRESTRICTED MARGIN STOCK.  THE BORROWER
SHALL NOT, AND SHALL NOT PERMIT ANY SUBSIDIARY TO, (A) SELL OR OTHERWISE DISPOSE
OF ANY CAPITAL STOCK CONSTITUTING UNRESTRICTED MARGIN STOCK OTHER THAN IN
EXCHANGE FOR CASH OR CASH EQUIVALENTS OR (B) FAIL TO MAINTAIN THE PROCEEDS OF
ANY SUCH SALE OR OTHER DISPOSITION AS CASH, CASH EQUIVALENTS OR SHORT-TERM
INVESTMENTS; PROVIDED THAT (I) TO THE EXTENT THAT THE BORROWER SHALL ELECT TO
REDUCE THE COMMITMENTS PURSUANT TO SECTION 2.06(A) AT ANY TIME AFTER ANY SUCH
SALE OR OTHER DISPOSITION, THE REQUIREMENTS OF CLAUSE (B) ABOVE SHALL CEASE TO
APPLY TO THE PORTION OF SUCH PROCEEDS AS SHALL BE EQUAL TO THE AGGREGATE AMOUNT
OF ANY SUCH REDUCTIONS AND (II) THIS SECTION SHALL NOT APPLY TO SALES OR OTHER
DISPOSITIONS OF UNRESTRICTED MARGIN STOCK PURSUANT TO SECTION 6.03(C).

 

SECTION 6.09.                 SUBSIDIARY INDEBTEDNESS.  THE BORROWER WILL NOT
PERMIT ANY OF ITS SUBSIDIARIES TO CREATE OR ISSUE ANY UNSECURED NOTES OR
DEBENTURES.

 

SECTION 6.10.                 PRE-FUNDED COMMERCIAL PAPER AND PRE-FUNDED LOANS. 
THE BORROWER SHALL MAINTAIN THE PROCEEDS OF ANY PRE-FUNDED COMMERCIAL PAPER AND
PRE-FUNDED LOANS IN CASH OR PERMITTED INVESTMENTS UNTIL THE EARLIER OF (A) THE
USE OF SUCH FUNDS TO SATISFY THE KINKO’S ACQUISITION CONDITIONS AND (B) THE USE
OF SUCH FUNDS TO REPAY ALL OUTSTANDING PRE-FUNDED COMMERCIAL PAPER AND
PRE-FUNDED LOANS, AS THE CASE MAY BE.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(A)                                  THE BORROWER SHALL FAIL TO PAY ANY
PRINCIPAL OF ANY LOAN WHEN AND AS THE SAME SHALL BECOME DUE AND PAYABLE, WHETHER
AT THE DUE DATE THEREOF OR AT A DATE FIXED FOR PREPAYMENT THEREOF OR OTHERWISE;

 

(B)                                 THE BORROWER SHALL FAIL TO PAY ANY INTEREST
ON ANY LOAN OR ANY FEE OR ANY OTHER AMOUNT (OTHER THAN AN AMOUNT REFERRED TO IN
CLAUSE (A) OF THIS ARTICLE) PAYABLE UNDER THIS AGREEMENT, WHEN AND AS THE SAME
SHALL BECOME DUE AND PAYABLE, AND SUCH FAILURE SHALL CONTINUE UNREMEDIED FOR A
PERIOD OF FIVE DAYS;

 

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(C)                                  ANY REPRESENTATION OR WARRANTY MADE OR
DEEMED MADE BY OR ON BEHALF OF THE BORROWER OR ANY SUBSIDIARY IN OR IN
CONNECTION WITH THIS AGREEMENT OR ANY AMENDMENT OR MODIFICATION HEREOF, OR IN
ANY REPORT, CERTIFICATE, FINANCIAL STATEMENT OR OTHER DOCUMENT FURNISHED
PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY AMENDMENT OR
MODIFICATION HEREOF, SHALL PROVE TO HAVE BEEN INACCURATE IN ANY MATERIAL RESPECT
ON OR AS OF THE DATE MADE OR DEEMED MADE;

 

(D)                                 THE BORROWER SHALL FAIL TO OBSERVE OR
PERFORM ANY COVENANT, CONDITION OR AGREEMENT CONTAINED IN SECTION 5.01(F), 5.02,
5.03, 5.10, 5.11, 6.01, 6.02, 6.03, 6.04, 6.05, 6.06, OR 6.08;

 

(E)                                  THE BORROWER SHALL FAIL TO OBSERVE OR
PERFORM ANY COVENANT, CONDITION OR AGREEMENT CONTAINED IN THIS AGREEMENT (OTHER
THAN THOSE SPECIFIED IN CLAUSE (A), (B), (C) OR (D) OF THIS ARTICLE), AND SUCH
FAILURE SHALL CONTINUE UNREMEDIED FOR A PERIOD OF 5 DAYS AFTER WRITTEN NOTICE
THEREOF TO THE BORROWER FROM THE ADMINISTRATIVE AGENT OR ANY LENDER;

 

(F)                                    THE BORROWER OR ANY CONSOLIDATED
SUBSIDIARY SHALL FAIL TO MAKE ANY PAYMENT (WHETHER OF PRINCIPAL OR INTEREST AND
REGARDLESS OF AMOUNT) IN RESPECT OF ANY MATERIAL INDEBTEDNESS, WHEN AND AS THE
SAME SHALL BECOME DUE AND PAYABLE, AFTER GIVING EFFECT TO ANY APPLICABLE GRACE
PERIOD;

 

(G)                                 ANY EVENT OR CONDITION OCCURS THAT RESULTS
IN ANY MATERIAL INDEBTEDNESS BECOMING DUE PRIOR TO ITS SCHEDULED MATURITY OR
THAT ENABLES OR PERMITS (WITH OR WITHOUT THE GIVING OF NOTICE, THE LAPSE OF TIME
OR BOTH) THE HOLDER OR HOLDERS OF ANY MATERIAL INDEBTEDNESS OR ANY TRUSTEE OR
AGENT ON ITS OR THEIR BEHALF TO CAUSE ANY MATERIAL INDEBTEDNESS TO BECOME DUE,
OR TO REQUIRE THE PREPAYMENT, REPURCHASE, REDEMPTION OR DEFEASANCE THEREOF,
PRIOR TO ITS SCHEDULED MATURITY; PROVIDED THAT THIS CLAUSE (G) SHALL NOT APPLY
TO SECURED INDEBTEDNESS THAT BECOMES DUE AS A RESULT OF THE VOLUNTARY SALE OR
TRANSFER OF THE PROPERTY OR ASSETS SECURING SUCH INDEBTEDNESS; PROVIDED THAT
THIS CLAUSE (G) SHALL NOT APPLY TO SECURED INDEBTEDNESS THAT BECOMES DUE IN
ACCORDANCE WITH ITS TERMS AS A RESULT OF THE VOLUNTARY OR INVOLUNTARY SALE,
TRANSFER OR DISPOSITION OF THE PROPERTY OR ASSETS SECURING SUCH INDEBTEDNESS;

 

(H)                                 AN INVOLUNTARY PROCEEDING SHALL BE COMMENCED
OR AN INVOLUNTARY PETITION SHALL BE FILED SEEKING (I) LIQUIDATION,
REORGANIZATION OR OTHER RELIEF IN RESPECT OF THE BORROWER OR ANY CONSOLIDATED
SUBSIDIARY OR ITS DEBTS, OR OF A SUBSTANTIAL PART OF ITS ASSETS, UNDER ANY
FEDERAL, STATE OR FOREIGN BANKRUPTCY, INSOLVENCY, RECEIVERSHIP OR SIMILAR LAW
NOW OR HEREAFTER IN EFFECT OR (II) THE APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR SIMILAR OFFICIAL FOR THE BORROWER OR ANY
CONSOLIDATED SUBSIDIARY OR FOR A SUBSTANTIAL PART OF ITS ASSETS, AND, IN ANY
SUCH CASE, SUCH PROCEEDING OR PETITION SHALL CONTINUE UNDISMISSED FOR 60 DAYS OR
AN ORDER OR DECREE APPROVING OR ORDERING ANY OF THE FOREGOING SHALL BE ENTERED;

 

(I)                                     THE BORROWER OR ANY CONSOLIDATED
SUBSIDIARY SHALL (I) VOLUNTARILY COMMENCE ANY PROCEEDING OR FILE ANY PETITION
SEEKING LIQUIDATION, REORGANIZATION OR OTHER RELIEF UNDER ANY FEDERAL, STATE OR
FOREIGN BANKRUPTCY, INSOLVENCY, RECEIVERSHIP OR SIMILAR LAW NOW OR HEREAFTER IN
EFFECT, (II) CONSENT TO THE INSTITUTION OF, OR FAIL TO CONTEST IN A TIMELY AND
APPROPRIATE MANNER, ANY PROCEEDING OR PETITION DESCRIBED IN CLAUSE (H) OF THIS
ARTICLE, (III) APPLY FOR OR CONSENT TO THE APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR SIMILAR OFFICIAL FOR THE BORROWER OR ANY
CONSOLIDATED SUBSIDIARY OR FOR A SUBSTANTIAL PART OF ITS ASSETS, (IV) FILE AN
ANSWER ADMITTING THE MATERIAL ALLEGATIONS OF A PETITION FILED AGAINST IT IN ANY
SUCH PROCEEDING, (V) MAKE A GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR
(VI) TAKE ANY ACTION FOR THE PURPOSE OF EFFECTING ANY OF THE FOREGOING;

 

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(J)                                     THE BORROWER OR ANY CONSOLIDATED
SUBSIDIARY SHALL FAIL TO PAY, OR ADMIT IN WRITING ITS INABILITY TO PAY, ITS
DEBTS GENERALLY AS THEY BECOME DUE;

 

(K)                                  THE BORROWER OR ANY OF ITS CONSOLIDATED
SUBSIDIARIES SHALL BE THE SUBJECT OF ANY PROCEEDING OR INVESTIGATION PERTAINING
TO THE RELEASE BY THE BORROWER OR ANY OF ITS CONSOLIDATED SUBSIDIARIES, OR ANY
OTHER PERSON OF ANY TOXIC OR HAZARDOUS WASTE OR SUBSTANCE INTO THE ENVIRONMENT,
OR ANY VIOLATION OF ANY FEDERAL, STATE OR LOCAL ENVIRONMENTAL, HEALTH OR SAFETY
LAW OR REGULATION, WHICH, IN EITHER CASE, COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT;

 

(L)                                     ANY PROVISION OF ANY LOAN DOCUMENT SHALL
AT ANY TIME FOR ANY REASON CEASE TO BE VALID AND BINDING AND ENFORCEABLE AGAINST
THE BORROWER OR ANY SIGNIFICANT SUBSIDIARY, OR THE VALIDITY, BINDING EFFECT OR
ENFORCEABILITY THEREOF AGAINST THE BORROWER OR ANY SIGNIFICANT SUBSIDIARY SHALL
BE CONTESTED BY ANY PERSON, OR THE BORROWER OR ANY SIGNIFICANT SUBSIDIARY SHALL
DENY THAT IT HAS ANY OR FURTHER LIABILITY OR OBLIGATION THEREUNDER, OR ANY LOAN
DOCUMENT SHALL BE TERMINATED, INVALIDATED OR SET ASIDE, OR BE DECLARED
INEFFECTIVE OR INOPERATIVE OR IN ANY WAY CEASE TO GIVE OR PROVIDE TO THE LENDERS
AND THE ADMINISTRATIVE AGENT THE BENEFITS PURPORTED TO BE CREATED THEREBY;

 

(M)                               THE BORROWER OR ANY CONSOLIDATED SUBSIDIARY
SHALL FAIL WITHIN 45 DAYS TO PAY, BOND OR OTHERWISE DISCHARGE ANY JUDGMENT OR
ORDER FOR THE PAYMENT OF MONEY IN EXCESS OF $1,000,000, WHICH IS NOT STAYED ON
APPEAL OR OTHERWISE BEING APPROPRIATELY CONTESTED IN GOOD FAITH;

 

(N)                                 ANY TERMINATION EVENT WITH RESPECT TO A PLAN
SHALL HAVE OCCURRED OR THE SUM OF THE INSUFFICIENCY OF ALL SINGLE EMPLOYER PLANS
IS EQUAL TO OR GREATER THAN $80,000,000;

 

(O)                                 A CHANGE OF CONTROL SHALL OCCUR; OR

 

(P)                                 THE FAILURE TO (I) (A) SATISFY THE KINKO’S
ACQUISITION CONDITIONS OR (B) REPAY ALL OUTSTANDING PRE-FUNDED COMMERCIAL PAPER
AND PRE-FUNDED COMMERCIAL PAPER LOANS, IN EACH CASE WITHIN 14 DAYS AFTER THE
ISSUANCE OF ANY PRE-FUNDED COMMERCIAL PAPER OR (II) IN THE EVENT ANY PRE-FUNDED
LOANS ARE MADE PRIOR TO THE SATISFACTION OF THE KINKO’S ACQUISITION CONDITIONS,
(A) SATISFY THE KINKO’S ACQUISITION CONDITIONS OR (B) REPAY ALL OUTSTANDING
PRE-FUNDED LOANS, IN EACH CASE WITHIN TWO BUSINESS DAYS AFTER THE MAKING OF SUCH
PRE-FUNDED LOANS;

 

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times:  (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become  due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or (i)
of this Article, the Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.

 

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If, within 14 days after acceleration of the maturity of the Obligations or
termination of the obligations of the Lenders to make Loans hereunder as a
result of any Default (other than any Default as described in clause (h) or (i)
of this Article) and before any judgment or decree for the payment of the
Obligations due shall have been obtained or entered, the Required Lenders (in
their sole discretion) shall so direct, the Administrative Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or termination,
provided that the Borrower certifies to the Lenders to their satisfaction that,
upon giving effect to such rescission, no other Indebtedness of the Borrower
shall be accelerated by virtue of a cross-default or cross-acceleration to
Indebtedness under this Agreement.

 

ARTICLE VIII

 

THE AGENTS

 

SECTION 8.01.                 APPOINTMENT.  EACH LENDER HEREBY IRREVOCABLY
DESIGNATES AND APPOINTS THE ADMINISTRATIVE AGENT AS THE AGENT OF SUCH LENDER
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND EACH SUCH LENDER
IRREVOCABLY AUTHORIZES THE ADMINISTRATIVE AGENT, IN SUCH CAPACITY, TO TAKE SUCH
ACTION ON ITS BEHALF UNDER THE PROVISIONS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND TO EXERCISE SUCH POWERS AND PERFORM SUCH DUTIES AS ARE EXPRESSLY
DELEGATED TO THE ADMINISTRATIVE AGENT BY THE TERMS OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, TOGETHER WITH SUCH OTHER POWERS AS ARE REASONABLY
INCIDENTAL THERETO.  NOTWITHSTANDING ANY PROVISION TO THE CONTRARY ELSEWHERE IN
THIS AGREEMENT, THE ADMINISTRATIVE AGENT SHALL NOT HAVE ANY DUTIES OR
RESPONSIBILITIES, EXCEPT THOSE EXPRESSLY SET FORTH HEREIN, OR ANY FIDUCIARY
RELATIONSHIP WITH ANY LENDER, AND NO IMPLIED COVENANTS, FUNCTIONS,
RESPONSIBILITIES, DUTIES, OBLIGATIONS OR LIABILITIES SHALL BE READ INTO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHERWISE EXIST AGAINST THE
ADMINISTRATIVE AGENT.

 

SECTION 8.02.                 DELEGATION OF DUTIES.  THE ADMINISTRATIVE AGENT
MAY EXECUTE ANY OF ITS DUTIES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY OR THROUGH AGENTS OR ATTORNEYS-IN-FACT AND SHALL BE ENTITLED TO ADVICE OF
COUNSEL CONCERNING ALL MATTERS PERTAINING TO SUCH DUTIES.  THE ADMINISTRATIVE
AGENT SHALL NOT BE RESPONSIBLE FOR THE NEGLIGENCE OR MISCONDUCT OF ANY AGENTS OR
ATTORNEYS-IN-FACT SELECTED BY IT WITH REASONABLE CARE.

 

SECTION 8.03.                 EXCULPATORY PROVISIONS.  NEITHER ANY AGENT NOR ANY
OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT OR
AFFILIATES SHALL BE (I) LIABLE FOR ANY ACTION LAWFULLY TAKEN OR OMITTED TO BE
TAKEN BY IT OR SUCH PERSON UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT (EXCEPT TO THE EXTENT THAT ANY OF THE FOREGOING ARE FOUND BY
A FINAL AND NONAPPEALABLE DECISION OF A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM ITS OR SUCH PERSON’S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT)
OR (II) RESPONSIBLE IN ANY MANNER TO ANY OF THE LENDERS FOR ANY RECITALS,
STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY ANY LOAN PARTY OR ANY OFFICER
THEREOF CONTAINED IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR IN ANY
CERTIFICATE, REPORT, STATEMENT OR OTHER DOCUMENT REFERRED TO OR PROVIDED FOR IN,
OR RECEIVED BY THE AGENTS UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR FOR THE VALUE, VALIDITY, EFFECTIVENESS, GENUINENESS,
ENFORCEABILITY OR SUFFICIENCY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
FOR ANY FAILURE OF ANY LOAN PARTY A PARTY THERETO TO PERFORM ITS OBLIGATIONS
HEREUNDER OR THEREUNDER.  THE AGENTS SHALL NOT BE UNDER ANY OBLIGATION TO ANY
LENDER TO ASCERTAIN OR TO INQUIRE AS TO THE OBSERVANCE OR PERFORMANCE OF ANY OF
THE AGREEMENTS CONTAINED IN, OR CONDITIONS OF, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR TO INSPECT THE PROPERTIES, BOOKS OR RECORDS OF ANY LOAN PARTY.

 

SECTION 8.04.                 RELIANCE BY ADMINISTRATIVE AGENT.  THE
ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RELY, AND SHALL BE FULLY PROTECTED IN
RELYING, UPON ANY INSTRUMENT, WRITING, RESOLUTION, NOTICE, CONSENT, CERTIFICATE,
AFFIDAVIT, LETTER, TELECOPY, TELEX OR TELETYPE MESSAGE, STATEMENT, ORDER OR
OTHER

 

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DOCUMENT OR CONVERSATION BELIEVED BY IT TO BE GENUINE AND CORRECT AND TO HAVE
BEEN SIGNED, SENT OR MADE BY THE PROPER PERSON OR PERSONS AND UPON ADVICE AND
STATEMENTS OF LEGAL COUNSEL (INCLUDING COUNSEL TO THE BORROWER), INDEPENDENT
ACCOUNTANTS AND OTHER EXPERTS SELECTED BY THE ADMINISTRATIVE AGENT.  THE
ADMINISTRATIVE AGENT MAY DEEM AND TREAT THE PAYEE OF ANY NOTE AS THE OWNER
THEREOF FOR ALL PURPOSES UNLESS A WRITTEN NOTICE OF ASSIGNMENT, NEGOTIATION OR
TRANSFER THEREOF SHALL HAVE BEEN FILED WITH THE ADMINISTRATIVE AGENT.  THE
ADMINISTRATIVE AGENT SHALL BE FULLY JUSTIFIED IN FAILING OR REFUSING TO TAKE ANY
ACTION UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT UNLESS IT SHALL FIRST
RECEIVE SUCH ADVICE OR CONCURRENCE OF THE REQUIRED LENDERS (OR, IF SO SPECIFIED
BY THIS AGREEMENT, ALL LENDERS) AS IT DEEMS APPROPRIATE OR IT SHALL FIRST BE
INDEMNIFIED TO ITS SATISFACTION BY THE LENDERS AGAINST ANY AND ALL LIABILITY AND
EXPENSE THAT MAY BE INCURRED BY IT BY REASON OF TAKING OR CONTINUING TO TAKE ANY
SUCH ACTION.  THE ADMINISTRATIVE AGENT SHALL IN ALL CASES BE FULLY PROTECTED IN
ACTING, OR IN REFRAINING FROM ACTING, UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS IN ACCORDANCE WITH A REQUEST OF THE REQUIRED LENDERS (OR, IF SO
SPECIFIED BY THIS AGREEMENT, ALL LENDERS), AND SUCH REQUEST AND ANY ACTION TAKEN
OR FAILURE TO ACT PURSUANT THERETO SHALL BE BINDING UPON ALL THE LENDERS AND ALL
FUTURE HOLDERS OF THE LOANS.

 

SECTION 8.05.                 NOTICE OF DEFAULT.  THE ADMINISTRATIVE AGENT SHALL
NOT BE DEEMED TO HAVE KNOWLEDGE OR NOTICE OF THE OCCURRENCE OF ANY DEFAULT OR
EVENT OF DEFAULT UNLESS THE ADMINISTRATIVE AGENT HAS RECEIVED NOTICE FROM A
LENDER OR THE BORROWER REFERRING TO THIS AGREEMENT, DESCRIBING SUCH DEFAULT OR
EVENT OF DEFAULT AND STATING THAT SUCH NOTICE IS A “NOTICE OF DEFAULT”.  IN THE
EVENT THAT THE ADMINISTRATIVE AGENT RECEIVES SUCH A NOTICE, THE ADMINISTRATIVE
AGENT SHALL GIVE NOTICE THEREOF TO THE LENDERS.  THE ADMINISTRATIVE AGENT SHALL
TAKE SUCH ACTION WITH RESPECT TO SUCH DEFAULT OR EVENT OF DEFAULT AS SHALL BE
REASONABLY DIRECTED BY THE REQUIRED LENDERS (OR, IF SO SPECIFIED BY THIS
AGREEMENT, ALL LENDERS); PROVIDED THAT UNLESS AND UNTIL THE ADMINISTRATIVE AGENT
SHALL HAVE RECEIVED SUCH DIRECTIONS, THE ADMINISTRATIVE AGENT MAY (BUT SHALL NOT
BE OBLIGATED TO) TAKE SUCH ACTION, OR REFRAIN FROM TAKING SUCH ACTION, WITH
RESPECT TO SUCH DEFAULT OR EVENT OF DEFAULT AS IT SHALL DEEM ADVISABLE IN THE
BEST INTERESTS OF THE LENDERS.

 

SECTION 8.06.                 NON-RELIANCE ON AGENTS AND OTHER LENDERS.  EACH
LENDER EXPRESSLY ACKNOWLEDGES THAT NEITHER THE AGENTS NOR ANY OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT OR
AFFILIATES HAVE MADE ANY REPRESENTATIONS OR WARRANTIES TO IT AND THAT NO ACT BY
ANY AGENT HEREAFTER TAKEN, INCLUDING ANY REVIEW OF THE AFFAIRS OF A LOAN PARTY
OR ANY AFFILIATE OF A LOAN PARTY, SHALL BE DEEMED TO CONSTITUTE ANY
REPRESENTATION OR WARRANTY BY ANY AGENT TO ANY LENDER.  EACH LENDER REPRESENTS
TO THE AGENTS THAT IT HAS, INDEPENDENTLY AND WITHOUT RELIANCE UPON ANY AGENT OR
ANY OTHER LENDER, AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT HAS DEEMED
APPROPRIATE, MADE ITS OWN APPRAISAL OF AND INVESTIGATION INTO THE BUSINESS,
OPERATIONS, PROPERTY, FINANCIAL AND OTHER CONDITION AND CREDITWORTHINESS OF THE
LOAN PARTIES AND THEIR AFFILIATES AND MADE ITS OWN DECISION TO MAKE ITS LOANS
HEREUNDER AND ENTER INTO THIS AGREEMENT.  EACH LENDER ALSO REPRESENTS THAT IT
WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON ANY AGENT OR ANY OTHER LENDER, AND
BASED ON SUCH DOCUMENTS AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE
TIME, CONTINUE TO MAKE ITS OWN CREDIT ANALYSIS, APPRAISALS AND DECISIONS IN
TAKING OR NOT TAKING ACTION UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AND TO MAKE SUCH INVESTIGATION AS IT DEEMS NECESSARY TO INFORM ITSELF AS TO THE
BUSINESS, OPERATIONS, PROPERTY, FINANCIAL AND OTHER CONDITION AND
CREDITWORTHINESS OF THE LOAN PARTIES AND THEIR AFFILIATES.  EXCEPT FOR NOTICES,
REPORTS AND OTHER DOCUMENTS EXPRESSLY REQUIRED TO BE FURNISHED TO THE LENDERS BY
THE ADMINISTRATIVE AGENT HEREUNDER, THE ADMINISTRATIVE AGENT SHALL NOT HAVE ANY
DUTY OR RESPONSIBILITY TO PROVIDE ANY LENDER WITH ANY CREDIT OR OTHER
INFORMATION CONCERNING THE BUSINESS, OPERATIONS, PROPERTY, CONDITION (FINANCIAL
OR OTHERWISE), PROSPECTS OR CREDITWORTHINESS OF ANY LOAN PARTY OR ANY AFFILIATE
OF A LOAN PARTY THAT MAY COME INTO THE POSSESSION OF THE ADMINISTRATIVE AGENT OR
ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT OR
AFFILIATES.

 

SECTION 8.07.                 INDEMNIFICATION.  THE LENDERS AGREE TO INDEMNIFY
EACH AGENT IN ITS CAPACITY AS SUCH (TO THE EXTENT NOT REIMBURSED BY THE BORROWER
AND WITHOUT LIMITING THE OBLIGATION OF

 

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THE BORROWER TO DO SO), RATABLY ACCORDING TO THEIR RESPECTIVE AGGREGATE EXPOSURE
PERCENTAGES IN EFFECT ON THE DATE ON WHICH INDEMNIFICATION IS SOUGHT UNDER THIS
SECTION (OR, IF INDEMNIFICATION IS SOUGHT AFTER THE DATE UPON WHICH THE
COMMITMENTS SHALL HAVE TERMINATED AND THE LOANS SHALL HAVE BEEN PAID IN FULL,
RATABLY IN ACCORDANCE WITH SUCH AGGREGATE EXPOSURE PERCENTAGES IMMEDIATELY PRIOR
TO SUCH DATE), FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
OF ANY KIND WHATSOEVER THAT MAY AT ANY TIME (WHETHER BEFORE OR AFTER THE PAYMENT
OF THE LOANS) BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST SUCH AGENT IN ANY
WAY RELATING TO OR ARISING OUT OF, THE COMMITMENTS, THIS AGREEMENT, ANY OF THE
OTHER LOAN DOCUMENTS OR ANY DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR
THEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY ACTION TAKEN
OR OMITTED BY SUCH AGENT UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING;
PROVIDED THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT OF ANY PORTION OF SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS THAT ARE FOUND BY A FINAL AND NONAPPEALABLE
DECISION OF A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH AGENT’S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  THE AGREEMENTS IN THIS SECTION SHALL
SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER.

 

SECTION 8.08.                 AGENT IN ITS INDIVIDUAL CAPACITY.  EACH AGENT AND
ITS AFFILIATES MAY MAKE LOANS TO, ACCEPT DEPOSITS FROM AND GENERALLY ENGAGE IN
ANY KIND OF BUSINESS WITH ANY LOAN PARTY AS THOUGH SUCH AGENT WERE NOT AN
AGENT.  WITH RESPECT TO ITS LOANS MADE OR RENEWED BY IT, EACH AGENT SHALL HAVE
THE SAME RIGHTS AND POWERS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AS
ANY LENDER AND MAY EXERCISE THE SAME AS THOUGH IT WERE NOT AN AGENT, AND THE
TERMS “LENDER” AND “LENDERS” SHALL INCLUDE EACH AGENT IN ITS INDIVIDUAL
CAPACITY.

 

SECTION 8.09.                 SUCCESSOR ADMINISTRATIVE AGENT.  THE
ADMINISTRATIVE AGENT MAY RESIGN AS ADMINISTRATIVE AGENT UPON 10 DAYS’ NOTICE TO
THE LENDERS AND THE BORROWER.  IF THE ADMINISTRATIVE AGENT SHALL RESIGN AS
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, THEN THE
REQUIRED LENDERS SHALL APPOINT FROM AMONG THE LENDERS A SUCCESSOR AGENT FOR THE
LENDERS, WHICH SUCCESSOR AGENT SHALL (UNLESS AN EVENT OF DEFAULT UNDER
SECTION 7(A) OR SECTION 7(I) WITH RESPECT TO THE BORROWER SHALL HAVE OCCURRED
AND BE CONTINUING) BE SUBJECT TO APPROVAL BY THE BORROWER (WHICH APPROVAL SHALL
NOT BE UNREASONABLY WITHHELD OR DELAYED), WHEREUPON SUCH SUCCESSOR AGENT SHALL
SUCCEED TO THE RIGHTS, POWERS AND DUTIES OF THE ADMINISTRATIVE AGENT, AND THE
TERM “ADMINISTRATIVE AGENT” SHALL MEAN SUCH SUCCESSOR AGENT EFFECTIVE UPON SUCH
APPOINTMENT AND APPROVAL, AND THE FORMER ADMINISTRATIVE AGENT’S RIGHTS, POWERS
AND DUTIES AS ADMINISTRATIVE AGENT SHALL BE TERMINATED, WITHOUT ANY OTHER OR
FURTHER ACT OR DEED ON THE PART OF SUCH FORMER ADMINISTRATIVE AGENT OR ANY OF
THE PARTIES TO THIS AGREEMENT OR ANY HOLDERS OF THE LOANS.  IF NO SUCCESSOR
AGENT HAS ACCEPTED APPOINTMENT AS ADMINISTRATIVE AGENT BY THE DATE THAT IS 10
DAYS FOLLOWING A RETIRING ADMINISTRATIVE AGENT’S NOTICE OF RESIGNATION, THE
RETIRING ADMINISTRATIVE AGENT’S RESIGNATION SHALL NEVERTHELESS THEREUPON BECOME
EFFECTIVE, AND THE LENDERS SHALL ASSUME AND PERFORM ALL OF THE DUTIES OF THE
ADMINISTRATIVE AGENT HEREUNDER UNTIL SUCH TIME, IF ANY, AS THE REQUIRED LENDERS
APPOINT A SUCCESSOR AGENT AS PROVIDED FOR ABOVE.  AFTER ANY RETIRING
ADMINISTRATIVE AGENT’S RESIGNATION AS ADMINISTRATIVE AGENT, THE PROVISIONS OF
THIS SECTION 8 SHALL INURE TO ITS BENEFIT AS TO ANY ACTIONS TAKEN OR OMITTED TO
BE TAKEN BY IT WHILE IT WAS ADMINISTRATIVE AGENT UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

 

SECTION 8.10.                 CO-DOCUMENTATION AGENTS AND CO-SYNDICATION
AGENTS.  NONE OF THE CO-DOCUMENTATION AGENTS NOR THE CO-SYNDICATION AGENTS SHALL
HAVE ANY DUTIES OR RESPONSIBILITIES HEREUNDER IN THEIR RESPECTIVE CAPACITIES AS
SUCH.

 

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ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01.                 AMENDMENTS AND WAIVERS.  (A)  NEITHER THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, NOR ANY TERMS HEREOF OR THEREOF MAY BE
AMENDED, SUPPLEMENTED OR MODIFIED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
THIS SECTION 9.01.  THE REQUIRED LENDERS AND EACH LOAN PARTY PARTY TO THE
RELEVANT LOAN DOCUMENT MAY, OR, WITH THE WRITTEN CONSENT OF THE REQUIRED
LENDERS, THE ADMINISTRATIVE AGENT AND EACH LOAN PARTY PARTY TO THE RELEVANT LOAN
DOCUMENT MAY, FROM TIME TO TIME, (A) ENTER INTO WRITTEN AMENDMENTS, SUPPLEMENTS
OR MODIFICATIONS HERETO AND TO THE OTHER LOAN DOCUMENTS FOR THE PURPOSE OF
ADDING, DELETING OR MODIFYING ANY PROVISIONS TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR CHANGING IN ANY MANNER THE RIGHTS OF THE LENDERS OR OF THE LOAN
PARTIES HEREUNDER OR THEREUNDER OR (B) WAIVE, ON SUCH TERMS AND CONDITIONS AS
THE REQUIRED LENDERS OR THE ADMINISTRATIVE AGENT, AS THE CASE MAY BE, MAY
SPECIFY IN SUCH INSTRUMENT, ANY OF THE REQUIREMENTS OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY DEFAULT OR EVENT OF DEFAULT AND ITS CONSEQUENCES;
PROVIDED, HOWEVER, THAT NO SUCH WAIVER AND NO SUCH AMENDMENT, SUPPLEMENT OR
MODIFICATION SHALL (I) FORGIVE THE PRINCIPAL AMOUNT OR EXTEND THE FINAL
SCHEDULED DATE OF MATURITY OF ANY LOAN, REDUCE THE STATED RATE OF ANY INTEREST
OR FEE PAYABLE HEREUNDER (EXCEPT (X) IN CONNECTION WITH THE WAIVER OF
APPLICABILITY OF ANY POST-DEFAULT INCREASE IN INTEREST RATES (WHICH WAIVER SHALL
BE EFFECTIVE WITH THE CONSENT OF EACH ADVERSELY AFFECTED LENDER) AND (Y) THAT
ANY AMENDMENT OR MODIFICATION OF DEFINED TERMS USED IN THE FINANCIAL COVENANTS
IN THIS AGREEMENT SHALL NOT CONSTITUTE A REDUCTION IN THE RATE OF INTEREST OR
FEES FOR PURPOSES OF THIS CLAUSE (I)) OR EXTEND THE SCHEDULED DATE OF ANY
PAYMENT THEREOF, OR INCREASE THE AMOUNT OR EXTEND THE EXPIRATION DATE OF ANY
LENDER’S COMMITMENT, IN EACH CASE WITHOUT THE WRITTEN CONSENT OF EACH LENDER
DIRECTLY AFFECTED THEREBY; (II) ELIMINATE OR REDUCE THE VOTING RIGHTS OF ANY
LENDER UNDER THIS SECTION 9.01 WITHOUT THE WRITTEN CONSENT OF SUCH LENDER;
(III) REDUCE ANY PERCENTAGE SPECIFIED IN THE DEFINITION OF REQUIRED LENDERS,
CONSENT TO THE ASSIGNMENT OR TRANSFER BY THE BORROWER OF ANY OF ITS RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, RELEASE ANY OF
THE SIGNIFICANT SUBSIDIARIES FROM THEIR MATERIAL OBLIGATIONS UNDER THE GUARANTEE
AGREEMENT, IN EACH CASE WITHOUT THE WRITTEN CONSENT OF ALL LENDERS; (IV) AMEND,
MODIFY OR WAIVE ANY PROVISION OF SECTION 2.16 WITHOUT THE WRITTEN CONSENT OF THE
LENDERS ADVERSELY AFFECTED THEREBY; AND (V) AMEND, MODIFY OR WAIVE ANY PROVISION
OF SECTION 8 WITHOUT THE WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT.  ANY SUCH
WAIVER AND ANY SUCH AMENDMENT, SUPPLEMENT OR MODIFICATION SHALL APPLY EQUALLY TO
EACH OF THE LENDERS AND SHALL BE BINDING UPON THE LOAN PARTIES, THE LENDERS, THE
ADMINISTRATIVE AGENT AND ALL FUTURE HOLDERS OF THE LOANS.  IN THE CASE OF ANY
WAIVER, THE LOAN PARTIES, THE LENDERS AND THE ADMINISTRATIVE AGENT SHALL BE
RESTORED TO THEIR FORMER POSITION AND RIGHTS HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS, AND ANY DEFAULT OR EVENT OF DEFAULT WAIVED SHALL BE DEEMED TO BE
CURED AND NOT CONTINUING; BUT NO SUCH WAIVER SHALL EXTEND TO ANY SUBSEQUENT OR
OTHER DEFAULT OR EVENT OF DEFAULT, OR IMPAIR ANY RIGHT CONSEQUENT THEREON.

 

(B)                                 NOTWITHSTANDING THE FOREGOING, THIS
AGREEMENT MAY BE AMENDED (OR AMENDED AND RESTATED) WITH THE WRITTEN CONSENT OF
THE REQUIRED LENDERS, THE ADMINISTRATIVE AGENT AND THE BORROWER (I) TO ADD ONE
OR MORE ADDITIONAL CREDIT FACILITIES TO THIS AGREEMENT AND TO PERMIT THE
EXTENSIONS OF CREDIT FROM TIME TO TIME OUTSTANDING THEREUNDER AND THE ACCRUED
INTEREST AND FEES IN RESPECT THEREOF TO SHARE RATABLY IN THE BENEFITS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS WITH THE LOANS AND EXTENSIONS OF CREDIT
AND THE ACCRUED INTEREST AND FEES IN RESPECT THEREOF AND (II) TO INCLUDE
APPROPRIATELY THE LENDERS HOLDING SUCH CREDIT FACILITIES IN ANY DETERMINATION OF
THE REQUIRED LENDERS.

 

SECTION 9.02.                 NOTICES.  ALL NOTICES, REQUESTS AND DEMANDS TO OR
UPON THE RESPECTIVE PARTIES HERETO TO BE EFFECTIVE SHALL BE IN WRITING
(INCLUDING BY TELECOPY), AND, UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN, SHALL
BE DEEMED TO HAVE BEEN DULY GIVEN OR MADE WHEN DELIVERED, OR THREE BUSINESS DAYS
AFTER BEING DEPOSITED IN THE MAIL, POSTAGE PREPAID, OR, IN THE CASE OF TELECOPY
NOTICE, WHEN RECEIVED, ADDRESSED AS FOLLOWS IN THE CASE OF THE BORROWER AND THE
ADMINISTRATIVE AGENT, AND AS SET FORTH

 

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IN AN ADMINISTRATIVE QUESTIONNAIRE DELIVERED TO THE ADMINISTRATIVE AGENT IN THE
CASE OF THE LENDERS, OR TO SUCH OTHER ADDRESS AS MAY BE HEREAFTER NOTIFIED IN
WRITING BY THE RESPECTIVE PARTIES HERETO:

 

Borrower:

 

FedEx Corporation
942 S. Shady Grove Road
Memphis, Tennessee 38120

 

 

Attention: Treasurer

 

 

Telecopy: (901) 818-7121

 

 

Telephone: (901) 818-7040

 

 

 

with a copy to:

 

FedEx Corporation
942 S. Shady Grove Road
Memphis, Tennessee 38120

 

 

Attention: Kenneth R. Masterson

 

 

Telecopy: (901) 818-7590

 

 

Telephone: (901) 818-7588

 

 

 

Administrative Agent:

 

JPMorgan Chase Bank
Loan & Agency Services Group
1111 Fannin Street, 10th Floor
Houston, Texas 77002

 

 

Attention: Clifford Trapani

 

 

Telecopy: (713) 750-2938

 

 

Telephone: (713) 750-7909

 

 

 

with a copy to:

 

JPMorgan Chase Bank
270 Park Avenue, 38th Floor
New York, New York 10017

 

 

Attention: Matthew Massie

 

 

Telecopy: 212-270-5100

 

 

Telephone: 212-270-5432

 

 

 

 

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

 

SECTION 9.03.                 NO WAIVER; CUMULATIVE REMEDIES.  NO FAILURE TO
EXERCISE AND NO DELAY IN EXERCISING, ON THE PART OF THE ADMINISTRATIVE AGENT OR
ANY LENDER, ANY RIGHT, REMEDY, POWER OR PRIVILEGE HEREUNDER OR UNDER THE OTHER
LOAN DOCUMENTS SHALL OPERATE AS A WAIVER THEREOF; NOR SHALL ANY SINGLE OR
PARTIAL EXERCISE OF ANY RIGHT, REMEDY, POWER OR PRIVILEGE HEREUNDER PRECLUDE ANY
OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER RIGHT, REMEDY,
POWER OR PRIVILEGE.  THE RIGHTS, REMEDIES, POWERS AND PRIVILEGES HEREIN PROVIDED
ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS, REMEDIES, POWERS AND PRIVILEGES
PROVIDED BY LAW.

 

SECTION 9.04.                 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  ALL
REPRESENTATIONS AND WARRANTIES MADE HEREUNDER, IN THE OTHER LOAN DOCUMENTS AND
IN ANY DOCUMENT, CERTIFICATE OR STATEMENT DELIVERED PURSUANT HERETO OR IN
CONNECTION HEREWITH SHALL SURVIVE THE EXECUTION AND DELIVERY OF THIS AGREEMENT
AND THE MAKING OF THE LOANS AND OTHER EXTENSIONS OF CREDIT HEREUNDER.

 

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SECTION 9.05.                 PAYMENT OF EXPENSES AND TAXES.  THE BORROWER
AGREES (A) TO PAY OR REIMBURSE THE ADMINISTRATIVE AGENT FOR ALL ITS REASONABLE
OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE DEVELOPMENT,
PREPARATION AND EXECUTION OF, AND ANY AMENDMENT, SUPPLEMENT OR MODIFICATION TO,
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY OTHER DOCUMENTS PREPARED IN
CONNECTION HEREWITH OR THEREWITH, AND THE CONSUMMATION AND ADMINISTRATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, INCLUDING THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL TO THE ADMINISTRATIVE AGENT AS SEPARATELY AGREED BY THE
ADMINISTRATIVE AGENT AND THE BORROWER, AND FILING AND RECORDING FEES AND
EXPENSES, WITH STATEMENTS WITH RESPECT TO THE FOREGOING TO BE SUBMITTED TO THE
BORROWER PRIOR TO THE EFFECTIVE DATE (IN THE CASE OF AMOUNTS TO BE PAID ON THE
EFFECTIVE DATE) AND FROM TIME TO TIME THEREAFTER ON A QUARTERLY BASIS OR SUCH
OTHER PERIODIC BASIS AS THE ADMINISTRATIVE AGENT SHALL DEEM APPROPRIATE, (B) TO
PAY OR REIMBURSE EACH LENDER AND EACH AGENT FOR ALL ITS REASONABLE OUT-OF-POCKET
COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE ENFORCEMENT OR PRESERVATION
OF ANY RIGHTS UNDER THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY SUCH OTHER
DOCUMENTS, INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL (INCLUDING THE
ALLOCATED FEES AND EXPENSES OF IN-HOUSE COUNSEL) TO EACH LENDER AND OF COUNSEL
TO THE ADMINISTRATIVE AGENT, (C) TO PAY, INDEMNIFY, AND HOLD EACH LENDER AND
EACH AGENT HARMLESS FROM, ANY AND ALL RECORDING AND FILING FEES AND ANY AND ALL
LIABILITIES WITH RESPECT TO STAMP, EXCISE AND OTHER TAXES, IF ANY, THAT ARE
PAYABLE IN CONNECTION WITH THE EXECUTION AND DELIVERY OF, OR CONSUMMATION OR
ADMINISTRATION OF ANY OF THE TRANSACTIONS CONTEMPLATED BY, OR ANY AMENDMENT,
SUPPLEMENT OR MODIFICATION OF, OR ANY WAIVER OR CONSENT UNDER OR IN RESPECT OF,
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY SUCH OTHER DOCUMENTS, AND
(D) TO PAY, INDEMNIFY, AND HOLD EACH LENDER AND EACH AGENT AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS (EACH, AN “INDEMNITEE”)
HARMLESS FROM AND AGAINST ANY AND ALL OTHER LIABILITIES, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WITH RESPECT TO THE EXECUTION, DELIVERY, ENFORCEMENT,
PERFORMANCE AND ADMINISTRATION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
INCLUDING ANY OF THE FOREGOING RELATING TO THE USE OF PROCEEDS OF THE LOANS OR
THE VIOLATION OF, NONCOMPLIANCE WITH OR LIABILITY UNDER, ANY ENVIRONMENTAL LAW
APPLICABLE TO THE OPERATIONS OF THE BORROWER, ANY GUARANTOR OR ANY SUBSIDIARY OR
ANY OF THE PROPERTIES AND THE REASONABLE FEES AND EXPENSES OF LEGAL COUNSEL IN
CONNECTION WITH CLAIMS, ACTIONS OR PROCEEDINGS BY ANY INDEMNITEE AGAINST ANY
LOAN PARTY UNDER ANY LOAN DOCUMENT (ALL THE FOREGOING IN THIS CLAUSE (D),
COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”), PROVIDED, THAT THE BORROWER SHALL
HAVE NO OBLIGATION HEREUNDER TO ANY INDEMNITEE WITH RESPECT TO INDEMNIFIED
LIABILITIES TO THE EXTENT SUCH INDEMNIFIED LIABILITIES ARE FOUND BY A FINAL AND
NONAPPEALABLE DECISION OF A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.  WITHOUT
LIMITING THE FOREGOING, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
BORROWER AGREES NOT TO ASSERT AND TO CAUSE ITS SUBSIDIARIES NOT TO ASSERT, AND
HEREBY WAIVES AND AGREES TO CAUSE ITS SUBSIDIARIES TO WAIVE, ALL RIGHTS FOR
CONTRIBUTION OR ANY OTHER RIGHTS OF RECOVERY WITH RESPECT TO ALL CLAIMS,
DEMANDS, PENALTIES, FINES, LIABILITIES, SETTLEMENTS, DAMAGES, COSTS AND EXPENSES
OF WHATEVER KIND OR NATURE, UNDER OR RELATED TO ENVIRONMENTAL LAWS, THAT ANY OF
THEM MIGHT HAVE BY STATUTE OR OTHERWISE AGAINST ANY INDEMNITEE.  ALL AMOUNTS DUE
UNDER THIS SECTION 9.05 SHALL BE PAYABLE NOT LATER THAN 10 DAYS AFTER WRITTEN
DEMAND THEREFORE, WHICH SHALL SET FORTH IN REASONABLE DETAIL THE NATURE, BASIS
AND DESCRIPTION OF SUCH INDEMNIFIED LIABILITY.  STATEMENTS PAYABLE BY THE
BORROWER PURSUANT TO THIS SECTION 9.05 SHALL BE SUBMITTED TO FEDEX CORPORATION,
ATTN: TREASURER (TELEPHONE NO. (901) 818-7040 (TELECOPY NO. (901) 818-7121), AT
THE ADDRESS OF THE BORROWER SET FORTH IN SECTION 9.02, OR TO SUCH OTHER PERSON
OR ADDRESS AS MAY BE HEREAFTER DESIGNATED BY THE BORROWER IN A WRITTEN NOTICE TO
THE ADMINISTRATIVE AGENT.  THE AGREEMENTS IN THIS SECTION 9.05 SHALL SURVIVE
REPAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER.

 

SECTION 9.06.                 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND
ASSIGNMENTS.  (A)  THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT
OF THE BORROWER, THE LENDERS, THE ADMINISTRATIVE AGENT, ALL FUTURE HOLDERS OF
THE LOANS AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, EXCEPT THAT THE BORROWER
MAY NOT ASSIGN OR TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT
WITHOUT THE PRIOR WRITTEN CONSENT OF EACH LENDER.

 

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(B)                                 ANY LENDER OTHER THAN ANY CONDUIT LENDER
MAY, WITHOUT THE CONSENT OF THE BORROWER, IN ACCORDANCE WITH APPLICABLE LAW, AT
ANY TIME SELL TO ONE OR MORE BANKS, FINANCIAL INSTITUTIONS OR OTHER ENTITIES
(EACH, A “PARTICIPANT”) PARTICIPATING INTERESTS IN ANY LOAN OWING TO SUCH
LENDER, ANY COMMITMENT OF SUCH LENDER OR ANY OTHER INTEREST OF SUCH LENDER
HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS.  IN THE EVENT OF ANY SUCH SALE BY
A LENDER OF A PARTICIPATING INTEREST TO A PARTICIPANT, SUCH LENDER’S OBLIGATIONS
UNDER THIS AGREEMENT TO THE OTHER PARTIES TO THIS AGREEMENT SHALL REMAIN
UNCHANGED, SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE FOR THE PERFORMANCE
THEREOF, SUCH LENDER SHALL REMAIN THE HOLDER OF ANY SUCH LOAN FOR ALL PURPOSES
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND THE BORROWER AND THE
ADMINISTRATIVE AGENT SHALL CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH LENDER
IN CONNECTION WITH SUCH LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.  IN NO EVENT SHALL ANY PARTICIPANT UNDER ANY SUCH
PARTICIPATION HAVE ANY RIGHT TO APPROVE ANY AMENDMENT OR WAIVER OF ANY PROVISION
OF ANY LOAN DOCUMENT, OR ANY CONSENT TO ANY DEPARTURE BY ANY LOAN PARTY
THEREFROM, EXCEPT TO THE EXTENT THAT SUCH AMENDMENT, WAIVER OR CONSENT WOULD
REDUCE THE PRINCIPAL OF, OR INTEREST ON, THE LOANS OR ANY FEES PAYABLE
HEREUNDER, OR POSTPONE THE DATE OF THE FINAL MATURITY OF THE LOANS, IN EACH CASE
TO THE EXTENT SUBJECT TO SUCH PARTICIPATION.  THE BORROWER AGREES THAT IF
AMOUNTS OUTSTANDING UNDER THIS AGREEMENT AND THE LOANS ARE DUE OR UNPAID, OR
SHALL HAVE BEEN DECLARED OR SHALL HAVE BECOME DUE AND PAYABLE UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT, EACH PARTICIPANT SHALL, TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, BE DEEMED TO HAVE THE RIGHT OF SETOFF IN RESPECT OF
ITS PARTICIPATING INTEREST IN AMOUNTS OWING UNDER THIS AGREEMENT TO THE SAME
EXTENT AS IF THE AMOUNT OF ITS PARTICIPATING INTEREST WERE OWING DIRECTLY TO IT
AS A LENDER UNDER THIS AGREEMENT, PROVIDED THAT, IN PURCHASING SUCH
PARTICIPATING INTEREST, SUCH PARTICIPANT SHALL BE DEEMED TO HAVE AGREED TO SHARE
WITH THE LENDERS THE PROCEEDS THEREOF AS PROVIDED IN SECTION 9.07(A) AS FULLY AS
IF IT WERE A LENDER HEREUNDER.  THE BORROWER ALSO AGREES THAT EACH PARTICIPANT
SHALL BE ENTITLED TO THE BENEFITS OF SECTIONS 2.13, 2.14 AND 2.15 WITH RESPECT
TO ITS PARTICIPATION IN THE COMMITMENTS AND THE LOANS OUTSTANDING FROM TIME TO
TIME AS IF IT WERE A LENDER; PROVIDED THAT, IN THE CASE OF SECTION 2.14, SUCH
PARTICIPANT SHALL HAVE COMPLIED WITH THE REQUIREMENTS OF SAID SECTION AND
PROVIDED, FURTHER, THAT NO PARTICIPANT SHALL BE ENTITLED TO RECEIVE ANY GREATER
AMOUNT PURSUANT TO ANY SUCH SECTION THAN THE TRANSFEROR LENDER WOULD HAVE BEEN
ENTITLED TO RECEIVE IN RESPECT OF THE AMOUNT OF THE PARTICIPATION TRANSFERRED BY
SUCH TRANSFEROR LENDER TO SUCH PARTICIPANT HAD NO SUCH TRANSFER OCCURRED.

 

(C)                                  ANY LENDER OTHER THAN ANY CONDUIT LENDER
(AN “ASSIGNOR”) MAY, IN ACCORDANCE WITH APPLICABLE LAW, AT ANY TIME AND FROM
TIME TO TIME ASSIGN TO ANY LENDER OR ANY LENDER AFFILIATE OR, WITH THE CONSENT
OF THE BORROWER AND THE ADMINISTRATIVE AGENT (WHICH, IN EACH CASE, SHALL NOT BE
UNREASONABLY WITHHELD OR DELAYED), TO AN ADDITIONAL BANK, FINANCIAL INSTITUTION
OR OTHER ENTITY (AN “ASSIGNEE”) ALL OR ANY PART OF ITS RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS PURSUANT TO AN ASSIGNMENT AND
ACCEPTANCE, EXECUTED BY SUCH ASSIGNEE, SUCH ASSIGNOR AND ANY OTHER PERSON WHOSE
CONSENT IS REQUIRED PURSUANT TO THIS PARAGRAPH, AND DELIVERED TO THE
ADMINISTRATIVE AGENT FOR ITS ACCEPTANCE AND RECORDING IN THE REGISTER (AS
DEFINED BELOW); PROVIDED THAT, UNLESS OTHERWISE AGREED BY THE BORROWER AND THE
ADMINISTRATIVE AGENT, NO SUCH ASSIGNMENT TO AN ASSIGNEE (OTHER THAN ANY LENDER
OR ANY LENDER AFFILIATE) SHALL BE IN AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN
$5,000,000, AND AFTER GIVING EFFECT TO SUCH ASSIGNMENT, SUCH ASSIGNING LENDER
SHALL HAVE COMMITMENTS AND LOANS IN AN AGGREGATE AMOUNT OF AT LEAST $5,000,000
IN EACH CASE DESCRIBED IN THIS SENTENCE EXCEPT IN THE CASE OF AN ASSIGNMENT OF
ALL OF A LENDER’S INTERESTS UNDER THIS AGREEMENT.  FOR PURPOSES OF THE PROVISO
CONTAINED IN THE PRECEDING SENTENCE, THE AMOUNT DESCRIBED THEREIN SHALL BE
AGGREGATED IN RESPECT OF EACH LENDER AND ITS LENDER AFFILIATES, IF ANY. THE
ASSIGNEE SHALL PURCHASE, AT PAR, ALL LOANS AND PAY ALL ACCRUED INTEREST AND
OTHER AMOUNTS OWING TO SUCH ASSIGNOR UNDER THIS AGREEMENT ON OR PRIOR TO THE
DATE OF ASSIGNMENT FOR ANY ASSIGNMENT PURSUANT TO SECTION 2.17.  UPON SUCH
EXECUTION, DELIVERY, ACCEPTANCE AND RECORDING, FROM AND AFTER THE EFFECTIVE DATE
DETERMINED PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE, (X) THE ASSIGNEE
THEREUNDER SHALL BE A PARTY HERETO AND, TO THE EXTENT PROVIDED IN SUCH
ASSIGNMENT AND ACCEPTANCE, HAVE THE RIGHTS AND OBLIGATIONS OF A LENDER HEREUNDER
WITH A COMMITMENT AND/OR LOANS AS SET FORTH THEREIN, AND (Y) THE ASSIGNOR
THEREUNDER SHALL, TO THE EXTENT

 

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PROVIDED IN SUCH ASSIGNMENT AND ACCEPTANCE, BE RELEASED FROM ITS OBLIGATIONS
UNDER THIS AGREEMENT (AND, IN THE CASE OF AN ASSIGNMENT AND ACCEPTANCE COVERING
ALL OF AN ASSIGNOR’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, SUCH ASSIGNOR
SHALL CEASE TO BE A PARTY HERETO).  NOTWITHSTANDING ANY PROVISION OF THIS
SECTION 9.06, THE CONSENT OF THE BORROWER SHALL NOT BE REQUIRED FOR ANY
ASSIGNMENT THAT OCCURS AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
ACCELERATION OF THE OBLIGATIONS.  NOTWITHSTANDING THE FOREGOING, ANY CONDUIT
LENDER MAY ASSIGN AT ANY TIME TO ITS DESIGNATING LENDER HEREUNDER WITHOUT THE
CONSENT OF THE BORROWER OR THE ADMINISTRATIVE AGENT ANY OR ALL OF THE LOANS IT
MAY HAVE FUNDED HEREUNDER AND PURSUANT TO ITS DESIGNATION AGREEMENT AND WITHOUT
REGARD TO THE LIMITATIONS SET FORTH IN THE FIRST SENTENCE OF THIS
SECTION 9.06(C).

 

(D)                                 THE ADMINISTRATIVE AGENT SHALL, ON BEHALF OF
THE BORROWER, MAINTAIN AT ITS ADDRESS REFERRED TO IN SECTION 9.02 A COPY OF EACH
ASSIGNMENT AND ACCEPTANCE DELIVERED TO IT AND A REGISTER (THE “REGISTER”) FOR
THE RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDERS AND THE COMMITMENT OF,
AND THE PRINCIPAL AMOUNT OF THE LOANS OWING TO, EACH LENDER FROM TIME TO TIME. 
THE ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE, IN THE ABSENCE OF MANIFEST
ERROR, AND THE BORROWER, EACH OTHER LOAN PARTY, THE ADMINISTRATIVE AGENT AND THE
LENDERS SHALL TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE REGISTER AS THE
OWNER OF THE LOANS AND ANY NOTES EVIDENCING THE LOANS RECORDED THEREIN FOR ALL
PURPOSES OF THIS AGREEMENT.  ANY ASSIGNMENT OF ANY LOAN, WHETHER OR NOT
EVIDENCED BY A NOTE, SHALL BE EFFECTIVE ONLY UPON APPROPRIATE ENTRIES WITH
RESPECT THERETO BEING MADE IN THE REGISTER (AND EACH NOTE SHALL EXPRESSLY SO
PROVIDE).  ANY ASSIGNMENT OR TRANSFER OF ALL OR PART OF A LOAN EVIDENCED BY A
NOTE SHALL BE REGISTERED ON THE REGISTER ONLY UPON SURRENDER FOR REGISTRATION OF
ASSIGNMENT OR TRANSFER OF THE NOTE EVIDENCING SUCH LOAN, ACCOMPANIED BY A DULY
EXECUTED ASSIGNMENT AND ACCEPTANCE, AND THEREUPON ONE OR MORE NEW NOTES SHALL BE
ISSUED TO THE DESIGNATED ASSIGNEE.

 

(E)                                  UPON ITS RECEIPT OF AN ASSIGNMENT AND
ACCEPTANCE EXECUTED BY AN ASSIGNOR, AN ASSIGNEE AND ANY OTHER PERSON WHOSE
CONSENT IS REQUIRED BY SECTION 9.06(C), TOGETHER WITH PAYMENT TO THE
ADMINISTRATIVE AGENT OF A REGISTRATION AND PROCESSING FEE OF $4,000, THE
ADMINISTRATIVE AGENT SHALL (I) PROMPTLY ACCEPT SUCH ASSIGNMENT AND ACCEPTANCE
AND (II) RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER ON THE
EFFECTIVE DATE DETERMINED PURSUANT THERETO.

 

(F)                                    FOR AVOIDANCE OF DOUBT, THE PARTIES TO
THIS AGREEMENT ACKNOWLEDGE THAT THE PROVISIONS OF THIS SECTION 9.06 CONCERNING
ASSIGNMENTS RELATE ONLY TO ABSOLUTE ASSIGNMENTS AND THAT SUCH PROVISIONS DO NOT
PROHIBIT ASSIGNMENTS CREATING SECURITY INTERESTS, INCLUDING ANY PLEDGE OR
ASSIGNMENT BY A LENDER TO ANY FEDERAL RESERVE BANK IN ACCORDANCE WITH APPLICABLE
LAW.

 

(G)                                 THE BORROWER, UPON RECEIPT OF WRITTEN NOTICE
FROM THE RELEVANT LENDER, AGREES TO ISSUE NOTES TO ANY LENDER REQUIRING NOTES TO
FACILITATE TRANSACTIONS OF THE TYPE DESCRIBED IN PARAGRAPH (F) ABOVE.

 

(H)                                 THE BORROWER, EACH LENDER AND THE
ADMINISTRATIVE AGENT HEREBY CONFIRMS THAT IT WILL NOT INSTITUTE AGAINST A
CONDUIT LENDER OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST A CONDUIT LENDER
ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION
PROCEEDING UNDER ANY STATE BANKRUPTCY OR SIMILAR LAW, FOR ONE YEAR AND ONE DAY
AFTER THE PAYMENT IN FULL OF THE LATEST MATURING COMMERCIAL PAPER NOTE ISSUED BY
SUCH CONDUIT LENDER; PROVIDED, HOWEVER, THAT EACH LENDER DESIGNATING ANY CONDUIT
LENDER HEREBY AGREES TO INDEMNIFY, SAVE AND HOLD HARMLESS EACH OTHER PARTY
HERETO FOR ANY LOSS, COST, DAMAGE OR EXPENSE ARISING OUT OF ITS INABILITY TO
INSTITUTE SUCH A PROCEEDING AGAINST SUCH CONDUIT LENDER DURING SUCH PERIOD OF
FORBEARANCE.

 

SECTION 9.07.                 ADJUSTMENTS; SET-OFF.  (A)  EXCEPT TO THE EXTENT
THAT THIS AGREEMENT EXPRESSLY PROVIDES FOR PAYMENTS TO BE ALLOCATED TO A
PARTICULAR LENDER OR TO THE LENDERS, IF ANY LENDER (A “BENEFITTED LENDER”)
SHALL, AT ANY TIME AFTER THE LOANS AND OTHER AMOUNTS PAYABLE HEREUNDER

 

50

--------------------------------------------------------------------------------

 

SHALL IMMEDIATELY BECOME DUE AND PAYABLE PURSUANT TO SECTION 7, RECEIVE ANY
PAYMENT OF ALL OR PART OF THE OBLIGATIONS OWING TO IT, OR RECEIVE ANY COLLATERAL
IN RESPECT THEREOF (WHETHER VOLUNTARILY OR INVOLUNTARILY, BY SET-OFF, PURSUANT
TO EVENTS OR PROCEEDINGS OF THE NATURE REFERRED TO IN SECTION 7(I), OR
OTHERWISE), IN A GREATER PROPORTION THAN ANY SUCH PAYMENT TO OR COLLATERAL
RECEIVED BY ANY OTHER LENDER, IF ANY, IN RESPECT OF THE OBLIGATIONS OWING TO
SUCH OTHER LENDER, SUCH BENEFITTED LENDER SHALL PURCHASE FOR CASH FROM THE OTHER
LENDERS A PARTICIPATING INTEREST IN SUCH PORTION OF THE OBLIGATIONS OWING TO
EACH SUCH OTHER LENDER, OR SHALL PROVIDE SUCH OTHER LENDERS WITH THE BENEFITS OF
ANY SUCH COLLATERAL, AS SHALL BE NECESSARY TO CAUSE SUCH BENEFITTED LENDER TO
SHARE THE EXCESS PAYMENT OR BENEFITS OF SUCH COLLATERAL RATABLY WITH EACH OF THE
LENDERS; PROVIDED, HOWEVER, THAT IF ALL OR ANY PORTION OF SUCH EXCESS PAYMENT OR
BENEFITS IS THEREAFTER RECOVERED FROM SUCH BENEFITTED LENDER, SUCH PURCHASE
SHALL BE RESCINDED, AND THE PURCHASE PRICE AND BENEFITS RETURNED, TO THE EXTENT
OF SUCH RECOVERY, BUT WITHOUT INTEREST.

 

(B)                                 IN ADDITION TO ANY RIGHTS AND REMEDIES OF
THE LENDERS PROVIDED BY LAW, IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, EACH LENDER SHALL HAVE THE RIGHT, WITHOUT PRIOR NOTICE TO THE
BORROWER, ANY SUCH NOTICE BEING EXPRESSLY WAIVED BY THE BORROWER TO THE EXTENT
PERMITTED BY APPLICABLE LAW, UPON ANY AMOUNT BECOMING DUE AND PAYABLE BY THE
BORROWER HEREUNDER (WHETHER AT THE STATED MATURITY, BY ACCELERATION OR
OTHERWISE), TO SET OFF AND APPROPRIATE AND APPLY AGAINST SUCH AMOUNT ANY AND ALL
DEPOSITS (GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR FINAL), IN ANY
CURRENCY, AND ANY OTHER CREDITS, INDEBTEDNESS OR CLAIMS, IN ANY CURRENCY, IN
EACH CASE WHETHER DIRECT OR INDIRECT, ABSOLUTE OR CONTINGENT, MATURED OR
UNMATURED, AT ANY TIME HELD OR OWING BY SUCH LENDER OR ANY BRANCH OR AGENCY
THEREOF TO OR FOR THE CREDIT OR THE ACCOUNT OF THE BORROWER, AS THE CASE MAY
BE.  EACH LENDER AGREES PROMPTLY TO NOTIFY THE BORROWER AND THE ADMINISTRATIVE
AGENT AFTER ANY SUCH SETOFF AND APPLICATION MADE BY SUCH LENDER, PROVIDED THAT
THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE VALIDITY OF SUCH SETOFF AND
APPLICATION.

 

SECTION 9.08.                 COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED BY
ONE OR MORE OF THE PARTIES TO THIS AGREEMENT ON ANY NUMBER OF SEPARATE
COUNTERPARTS, AND ALL OF SAID COUNTERPARTS TAKEN TOGETHER SHALL BE DEEMED TO
CONSTITUTE ONE AND THE SAME INSTRUMENT.  DELIVERY OF AN EXECUTED SIGNATURE PAGE
OF THIS AGREEMENT BY FACSIMILE TRANSMISSION SHALL BE EFFECTIVE AS DELIVERY OF A
MANUALLY EXECUTED COUNTERPART HEREOF.  A SET OF THE COPIES OF THIS AGREEMENT
SIGNED BY ALL THE PARTIES SHALL BE LODGED WITH THE BORROWER AND THE
ADMINISTRATIVE AGENT.

 

SECTION 9.09.                 SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT
THAT IS PROHIBITED OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH
JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR
UNENFORCEABILITY WITHOUT INVALIDATING THE REMAINING PROVISIONS HEREOF, AND ANY
SUCH PROHIBITION OR UNENFORCEABILITY IN ANY JURISDICTION SHALL NOT INVALIDATE OR
RENDER UNENFORCEABLE SUCH PROVISION IN ANY OTHER JURISDICTION.

 

SECTION 9.10.                 INTEGRATION.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE ENTIRE AGREEMENT OF THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF, AND
THERE ARE NO PROMISES, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY THE
ADMINISTRATIVE AGENT OR ANY LENDER RELATIVE TO THE SUBJECT MATTER HEREOF NOT
EXPRESSLY SET FORTH OR REFERRED TO HEREIN OR IN THE OTHER LOAN DOCUMENTS.

 

SECTION 9.11.                 GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 9.12.                 SUBMISSION TO JURISDICTION; WAIVERS.  THE BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

51

--------------------------------------------------------------------------------

 

(A)                                  SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

 

(B)                                 CONSENTS THAT ANY SUCH ACTION OR PROCEEDING
MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;

 

(C)                                  AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 9.02 OR AT SUCH OTHER ADDRESS
OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;

 

(D)                                 AGREES THAT NOTHING HEREIN SHALL AFFECT THE
RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND

 

(E)                                  WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION
OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES.

 

SECTION 9.13.                 ACKNOWLEDGEMENTS.  THE BORROWER HEREBY
ACKNOWLEDGES THAT:

 

(A)                                  IT HAS BEEN ADVISED BY COUNSEL IN THE
NEGOTIATION, EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS;

 

(B)                                 NEITHER THE ADMINISTRATIVE AGENT NOR ANY
LENDER HAS ANY FIDUCIARY RELATIONSHIP WITH OR DUTY TO THE BORROWER ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND
THE RELATIONSHIP BETWEEN ADMINISTRATIVE AGENT AND LENDERS, ON ONE HAND, AND THE
BORROWER, ON THE OTHER HAND, IN CONNECTION HEREWITH OR THEREWITH IS SOLELY THAT
OF DEBTOR AND CREDITOR; AND

 

(C)                                  NO JOINT VENTURE IS CREATED HEREBY OR BY
THE OTHER LOAN DOCUMENTS OR OTHERWISE EXISTS BY VIRTUE OF THE TRANSACTIONS
CONTEMPLATED HEREBY AMONG THE LENDERS OR AMONG THE BORROWER AND THE LENDERS.

 

SECTION 9.14.                 RELEASE OF GUARANTORS.  UPON THE CONSUMMATION OF
ANY LIQUIDATION, DISSOLUTION, MERGER, CONSOLIDATION, SALE OR OTHER TRANSFER OF A
GUARANTOR OTHER THAN FEDERAL EXPRESS CORPORATION (COLLECTIVELY, A “TRANSFER”),
AND PROVIDED NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR
WOULD OCCUR AS A RESULT OF SUCH TRANSFER, SUCH GUARANTOR SHALL AUTOMATICALLY BE
RELEASED FROM ALL OF ITS OBLIGATIONS UNDER THE GUARANTEE AGREEMENT, AND, IF THE
BORROWER SO REQUESTS, THE LENDERS SHALL PROMPTLY EXECUTE AN INSTRUMENT, IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE BORROWER AND THE ADMINISTRATIVE
AGENT, EVIDENCING SUCH RELEASE.

 

SECTION 9.15.                 CONFIDENTIALITY.  EACH OF THE ADMINISTRATIVE AGENT
AND EACH LENDER AGREES TO KEEP CONFIDENTIAL ALL NON-PUBLIC INFORMATION PROVIDED
TO IT OR ITS AFFILIATES BY ANY LOAN PARTY OR ITS AFFILIATES PURSUANT TO THIS
AGREEMENT THAT IS DESIGNATED BY SUCH LOAN PARTY AS CONFIDENTIAL; PROVIDED THAT
NOTHING HEREIN SHALL PREVENT THE ADMINISTRATIVE AGENT OR ANY LENDER FROM
DISCLOSING ANY SUCH INFORMATION (A) TO THE ADMINISTRATIVE AGENT, ANY OTHER
LENDER OR ANY LENDER AFFILIATE, (B) SUBJECT TO AN AGREEMENT TO COMPLY WITH THE
PROVISIONS OF THIS SECTION, TO ANY ACTUAL OR PROSPECTIVE TRANSFEREE OR ANY

 

52

--------------------------------------------------------------------------------

 

DIRECT OR INDIRECT COUNTERPARTY TO ANY HEDGE AGREEMENT (OR ANY PROFESSIONAL
ADVISOR TO SUCH COUNTERPARTY), (C) TO ITS EMPLOYEES, DIRECTORS, AGENTS,
ATTORNEYS, ACCOUNTANTS AND OTHER PROFESSIONAL ADVISORS OR THOSE OF ANY OF ITS
AFFILIATES WHO ARE MADE AWARE OF THE CONFIDENTIAL REQUIREMENTS OF THIS
SECTION 9.15, (D) UPON THE REQUEST OR DEMAND OF ANY GOVERNMENTAL AUTHORITY,
(E) IN RESPONSE TO ANY ORDER OF ANY COURT OR OTHER GOVERNMENTAL AUTHORITY OR AS
MAY OTHERWISE BE REQUIRED PURSUANT TO ANY REQUIREMENT OF LAW, (F) IF REQUIRED TO
DO SO IN CONNECTION WITH ANY LITIGATION OR SIMILAR PROCEEDING, (G) THAT HAS BEEN
PUBLICLY DISCLOSED, (H) TO THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS
OR ANY SIMILAR ORGANIZATION OR ANY NATIONALLY RECOGNIZED RATING AGENCY THAT
REQUIRES ACCESS TO INFORMATION ABOUT A LENDER’S INVESTMENT PORTFOLIO IN
CONNECTION WITH RATINGS ISSUED WITH RESPECT TO SUCH LENDER, OR (I) IN CONNECTION
WITH THE EXERCISE OF ANY REMEDY HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT.  
THE PROVISIONS OF THIS SECTION 9.15 SHALL SURVIVE ANY EXPIRATION OR TERMINATION
OF THIS AGREEMENT FOR A PERIOD OF ONE-YEAR.

 

SECTION 9.16.                 WAIVERS OF JURY TRIAL.  THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

SECTION 9.17.                 INTEREST RATE LIMITATION.  NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, IF AT ANY TIME THE INTEREST RATE APPLICABLE TO
ANY LOAN, TOGETHER WITH ALL FEES, CHARGES AND OTHER AMOUNTS WHICH ARE TREATED AS
INTEREST ON SUCH LOAN UNDER APPLICABLE LAW (COLLECTIVELY, THE “CHARGES”), SHALL
EXCEED THE MAXIMUM LAWFUL RATE (THE “MAXIMUM RATE”) WHICH MAY BE CONTRACTED FOR,
CHARGED, TAKEN, RECEIVED OR RESERVED BY THE LENDER HOLDING SUCH LOAN IN
ACCORDANCE WITH APPLICABLE LAW, THE RATE OF INTEREST PAYABLE IN RESPECT OF SUCH
LOAN HEREUNDER, TOGETHER WITH ALL CHARGES PAYABLE IN RESPECT THEREOF, SHALL BE
LIMITED TO THE MAXIMUM RATE AND, TO THE EXTENT LAWFUL, THE INTEREST AND CHARGES
THAT WOULD HAVE BEEN PAYABLE IN RESPECT OF SUCH LOAN BUT WERE NOT PAYABLE AS A
RESULT OF THE OPERATION OF THIS SECTION SHALL BE CUMULATED AND THE INTEREST AND
CHARGES PAYABLE TO SUCH LENDER IN RESPECT OF OTHER LOANS OR PERIODS SHALL BE
INCREASED (BUT NOT ABOVE THE MAXIMUM RATE THEREFOR) UNTIL SUCH CUMULATED AMOUNT,
TOGETHER WITH INTEREST THEREON AT THE FEDERAL FUNDS EFFECTIVE RATE TO THE DATE
OF REPAYMENT, SHALL HAVE BEEN RECEIVED BY SUCH LENDER.

 

SECTION 9.18.                 HEADINGS.  THE SECTION AND OTHER HEADINGS
CONTAINED IN THIS AGREEMENT ARE FOR REFERENCE PURPOSES ONLY AND SHALL NOT AFFECT
THE MEANING OR INTERPRETATION OF THIS AGREEMENT.

 

[Balance of Page Intentionally Blank]

 

53

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

 

 

FEDEX CORPORATION, as Borrower

 

 

 

 

 

 

 

 

 

By:

/s/ Burnetta B. Williams

 

 

 

Name:

Burnetta B. Williams

 

 

Title:

Staff Vice President and
Assistant Treasurer

 

 

 

 

 

 

 

 

 

JPMORGAN CHASE BANK,

 

as Administrative Agent and as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew H. Massie

 

 

 

Name:

Matthew H. Massie

 

 

Title:

Managing Director

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

CITICORP USA, INC., as a Co-Syndication
Agent and as a Lender

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Gaylord Holmes

 

 

 

Name:

Gaylord Holmes

 

 

 

Title:

Vice President

 

 

--------------------------------------------------------------------------------

 

 

BANK OF AMERICA, N.A., as a Co-Syndication
Agent and as a Lender

 

 

 

 

 

 

 

 

 

By:

 /s/ Sharon Burks Horos

 

 

 

Name:

Sharon Burks Horos

 

 

Title:

Vice President

 

--------------------------------------------------------------------------------

 

 

THE BANK OF TOKYO-MITSUBISHI, LTD.,

 

NY BRANCH, as a Co-Documentation Agent and
 as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Christian Giordano

 

 

 

Name:

Christian Giordano

 

 

 

Title:

Authorized Signatory

 

 

--------------------------------------------------------------------------------

 

 

BANK ONE, NA., as a Co-Documentation Agent and
as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Christopher C. Cavaiani

 

 

 

Name:

Christopher C. Cavaiani

 

 

 

Title:

Director

 

 

--------------------------------------------------------------------------------

 

 

COMMERZBANK A.G., New York and Grand Cayman
 Branches, as a Co-Documentation Agent and as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Harry Yergey

 

 

 

Name:

Harry Yergey

 

 

Title:

Senior Vice President and Branch Manager

 

 

 

 

 

 

 

 

 

By:

/s/ Subash Viswanathan

 

 

 

Name:

Subash Viswanathan

 

 

Title:

Senior Vice President

 

--------------------------------------------------------------------------------

 

 

MERRILL LYNCH BANK USA, as a
Co-Documentation Agent and as a Lender

 

 

 

 

 

 

 

By:

/s/ Louis Alder

 

 

 

Name:

Louis Alder

 

 

Title:

Director

 

--------------------------------------------------------------------------------

 

 

 KBC BANK, N.V., New York Branch,
as a Lender

 

 

 

 

 

 

 

By:

/s/ Jean-Pierre Diels

 

 

 

Name:

Jean-Pierre Diels

 

 

Title:

First Vice President

 

 

 

 

 

 

 

 

 

By:

/s/ Eric Raskin

 

 

 

Name:

Eric Raskin

 

 

Title:

Vice President

 

--------------------------------------------------------------------------------

 

 

KEYBANK NATIONAL ASSOCIATION,
as a Lender

 

 

 

 

 

 

 

By:

/s/ Francis W. Lutz, Jr.

 

 

 

Name:

Francis W. Lutz, Jr.

 

 

Title:

Vice President

 

--------------------------------------------------------------------------------

 

 

REGIONS BANK, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Phillip L. May

 

 

 

Name:

Phillip L. May

 

 

Title:

Senior Vice President

 

--------------------------------------------------------------------------------

 

 

THE ROYAL BANK OF SCOTLAND PLC,
as a Lender

 

 

 

 

 

 

 

By:

/s/ David Apps

 

 

 

Name:

David Apps

 

 

Title:

Senior Vice President

 

--------------------------------------------------------------------------------

 

 

THE BANK OF NOVA SCOTIA,
as a Lender

 

 

 

 

 

 

 

By:

/s/ William E. Zarrett

 

 

 

Name:

William E. Zarrett

 

 

Title:

Managing Director

 

--------------------------------------------------------------------------------

 

 

SUMITOMO MITSUI BANKING
CORPORATION, as a Lender

 

 

 

 

 

 

 

By:

/s/ Peter Knight

 

 

 

Name:

Peter Knight

 

 

Title:

Joint General Manager

 

--------------------------------------------------------------------------------

 

 

SUNTRUST BANK, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ Stephen A. McKenna

 

 

 

Name:

Stephen A. McKenna

 

 

Title:

Managing Director

 

 

 

Senior Risk Officer

 

--------------------------------------------------------------------------------

 

 

UNION PLANTERS BANK, as a Lender

 

 

 

 

 

 

 

 

 

By:

/s/ James R. Gummel

 

 

 

Name:

James R. Gummel

 

 

Title:

Senior Vice President

 

--------------------------------------------------------------------------------

 

Schedule 2.01

 

LENDERS AND COMMITMENTS

 

Names of Lenders

 

Commitments

 

 

 

 

 

JPMORGAN CHASE BANK

 

$

700,000,000

 

BANK OF AMERICA, N.A.

 

$

150,000,000

 

BANK OF TOKYO-MITSUBISHI TRUST COMPANY

 

$

150,000,000

 

BANK ONE, NA

 

$

150,000,000

 

CITICORP USA, INC.

 

$

150,000,000

 

COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK AND GRAND CAYMAN BRANCHES

 

$

150,000,000

 

MERRILL LYNCH BANK USA

 

$

150,000,000

 

KBC BANK N.V.

 

$

50,000,000

 

KEYBANK NATIONAL ASSOCIATION

 

$

50,000,000

 

REGIONS BANK

 

$

50,000,000

 

THE ROYAL BANK OF SCOTLAND PLC

 

$

50,000,000

 

THE BANK OF NOVA SCOTIA

 

$

50,000,000

 

SUMITOMO MITSUI BANKING CORPORATION

 

$

50,000,000

 

SUNTRUST BANK

 

$

50,000,000

 

UNION PLANTERS BANK, N.A.

 

$

50,000,000

 

Total:

 

$

2,000,000,000.00

 

 

--------------------------------------------------------------------------------

 

Schedule 3.06

 

DISCLOSED MATTERS

(See Section 3.06)

 

The matters described under Notes 1 and 11 to the financial statements included
in the Borrower’s Quarterly Report on Form 10-Q for the fiscal quarter ended
November 30, 2003, relevant excerpts of which are set forth below:

 

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

AIRLINE STABILIZATION COMPENSATION.  In March 2003, the Department of
Transportation (“DOT”) asserted that we were overpaid under the Air
Transportation Safety and System Stabilization Act (the “Act”) by $31.6 million
and has demanded repayment.  We have filed requests for administrative and
judicial review of this determination.  We believe that we have complied with
all aspects of the Act, that it is probable we will ultimately collect the
remaining $18 million receivable we have recorded and that we will not be
required to pay any portion of the DOT’s $31.6 million demand.  However, we
cannot be assured of the ultimate outcome of this matter and it is reasonably
possible that a material reduction to the $119 million of compensation we
recognized in 2002 could occur.  Based on the DOT’s assertion, the range for
potential loss on this matter is zero to $49.6 million.

 

NOTE 11: COMMITMENTS AND CONTINGENCIES

 

In September 2003, the 9th Circuit Court of Appeals ruled in our favor in the
class action lawsuit alleging we improperly suspended our money-back guarantee
during the UPS strike in 1997.  The lower court had entered judgment against
FedEx Express of approximately $70 million, including accrued interest and fees
for the plaintiffs’ attorney.  The court of appeals has overturned that decision
and entered judgment in FedEx’s favor.

 

In August 2003, we received a favorable ruling from the U.S. District Court in
Memphis over the tax treatment of jet engine maintenance costs.  The court held
that these costs were ordinary and necessary business expenses and properly
deductible by us.  In connection with an Internal Revenue Service (“IRS”) audit
for the tax years 1993 and 1994, the IRS had proposed adjustments characterizing
routine jet engine maintenance costs as capital expenditures that must be
recovered over seven years, rather than as expenses that are deducted
immediately, as has been our practice.  After settlement discussions failed to
resolve this matter, in 2001 we paid $70 million in tax and interest and filed
suit in Federal District Court for a complete refund of the amounts paid plus
interest.  Although the IRS has continued to assert its position in audits for
the years 1995 through 1998 with respect to maintenance costs for jet engines
and rotable aircraft parts, we believe this ruling should also apply to future
tax years.

 

As a result of this ruling, we recognized a one-time benefit in the first
quarter of 2004 of $26 million, net of tax, primarily related to the reduction
of accruals related to this matter and the recognition of interest earned on the
amount we paid in 2001.  These adjustments affected both net interest expense
($30 million pre-tax) and income tax expense ($7 million).  Future periods are
not expected to be materially affected by the resolution of this matter.

 

--------------------------------------------------------------------------------

 

On November 19, 2003, the IRS appealed this ruling to the Sixth Circuit Court of
Appeals.  A schedule for the appeal has not been set.  However, we believe the
District Court’s ruling will be upheld on appeal.

 

2

--------------------------------------------------------------------------------

 

Schedule 3.07

FEDEX CORPORATION
SIGNIFICANT SUBSIDIARIES
(See Section 3.07)

 

Significant
Subsidiary

 

Percent
Ownership

 

Jurisdiction of
Organization

 

 

 

 

 

 

 

Federal Express Corporation

 

100

%

Delaware

 

 

 

 

 

 

 

Federal Express International, Inc.(1)

 

100

%

Delaware

 

 

 

 

 

 

 

Federal Express Europe, Inc.(2)

 

100

%

Delaware

 

 

 

 

 

 

 

FedEx Ground Package System, Inc.

 

100

%

Delaware

 

 

 

 

 

 

 

FedEx Freight Corporation

 

100

%

Delaware

 

 

 

 

 

 

 

FedEx Freight East, Inc.(3)

 

100

%

Arkansas

 

 

 

--------------------------------------------------------------------------------

(1) Federal Express International, Inc. is a wholly owned subsidiary of Federal
Express Corporation.

(2) Federal Express Europe, Inc. is a wholly owned subsidiary of Federal Express
International, Inc.

(3) FedEx Freight East, Inc. is a wholly owned subsidiary of FedEx Freight
Corporation.

 

--------------------------------------------------------------------------------

 

Schedule 5.01(c)

COMPLIANCE CALCULATIONS
(See Section 5.01(c))

 

SEE ATTACHED

 

--------------------------------------------------------------------------------

 

FEDEX CORPORATION
COMPLIANCE CALCULATIONS
CREDIT AGREEMENT,
DATED AS OF FEBRUARY 11, 2004
IN THOUSANDS OF US$

 

SECTION 5.10
LEVERAGE TEST

 

 

 

1st Qtr.
FY

 

2nd Qtr.
FY

 

3rd Qtr.
FY

 

4th Qtr.
FY

 

Total Funded Debt (sum)

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

$

 

 

$

 

 

$

 

 

$

 

 

Capitalized Operating Lease Value*

 

$

 

 

$

 

 

$

 

 

$

 

 

Total Defined Debt

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Total Defined Debt

 

$

 

 

$

 

 

$

 

 

$

 

 

Consolidated Adjusted Net Worth

 

$

 

 

$

 

 

$

 

 

$

 

 

Total Defined Capitalization

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defined Capitalization Ratio**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maximum Defined Capitalization Ratio

 

0.70

 

0.70

 

0.70

 

0.70

 

 

 

 

 

 

 

 

 

 

 

Total Additional Defined Debt Allowed

 

$

 

 

$

 

 

$

 

 

$

 

 

 

--------------------------------------------------------------------------------

* Capitalized Operating Lease Value is the present value of Aircraft Leases
discounted at 12.5%.

 

** The Defined Capitalization Ratio is Total Defined Debt to Total Defined
Capitalization.

 

1

--------------------------------------------------------------------------------

 

FEDEX CORPORATION
COMPLIANCE CALCULATIONS
CREDIT AGREEMENT,
IN THOUSANDS OF US$

 

SECTION 5.11
FIXED CHARGE COVERAGE TEST

 

Prior Fiscal Year Detail

 

1st Qtr.
FY

 

2nd Qtr.
FY

 

3rd Qtr.
FY

 

4th Qtr.
FY

 

Adjusted Net Income

 

$

 

 

$

 

 

$

 

 

$

 

 

Interest Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Rent Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Consolidated Cash Flow*

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Rent Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Total Fixed Charges**

 

$

 

 

$

 

 

$

 

 

$

 

 

 

Current Fiscal Year Detail

 

1st Qtr.
FY

 

2nd Qtr.
FY

 

3rd Qtr.
FY

 

4th Qtr.
FY

 

Adjusted Net Income

 

$

 

 

$

 

 

$

 

 

$

 

 

Interest Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Rent Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Consolidated Cash Flow

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Rent Expense

 

$

 

 

$

 

 

$

 

 

$

 

 

Total Fixed Charges

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

1st Qtr.
FY

 

2nd Qtr.
FY

 

3rd Qtr.
FY

 

4th Qtr.
FY

 

12 Month Consolidated Cash Flow

 

$

 

 

$

 

 

$

 

 

$

 

 

Divided By:

 

 

 

 

 

 

 

 

 

12 Month Total Fixed Charges

 

$

 

 

$

 

 

$

 

 

$

 

 

Equals:

 

 

 

 

 

 

 

 

 

Fixed Charge Coverage

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Fixed Charge Coverage Ratio

 

1.25

 

1.25

 

1.25

 

1.25

 

 

 

 

 

 

 

 

 

 

 

12 Month Consolidated Cash Flow Over/(Under)

 

$

 

 

$

 

 

$

 

 

$

 

 

 

--------------------------------------------------------------------------------

* Consolidated Cash Flow is the sum of Adjusted Net Income, Interest and Rent
Expense.

 

** Total Fixed Charges is the sum of Interest Expense and Rent Expense.

 

The Ratio is calculated on a rolling 12 month basis to eliminate seasonality.

 

2

--------------------------------------------------------------------------------

 

Schedule 5.12

SUBSIDIARY GUARANTORS

 

Subsidiary

 

Jurisdiction of
Organization

 

Address of Subsidiary’s
Executive Offices

 

 

 

 

 

 

 

FedEx Freight East, Inc.
(formerly American Freightways, Inc.)

 

Arkansas

 

2200 Forward Drive
Harrison, AR  72601

 

 

 

 

 

 

 

Caribbean Transportation Services, Inc.

 

Delaware

 

7304 West Market Street
Greensboro, NC  27409

 

 

 

 

 

 

 

Federal Express Corporation

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express (Australia) Pty. Ltd.

 

Australia

 

215-225 Euston Road
Alexandria
NSW 2015 Australia

 

 

 

 

 

 

 

Federal Express Aviation Services, Incorporated

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express Canada Ltd.

 

Canada

 

5895 Explorer Drive
Mississauga, Ontario L4W 5K6

 

 

 

 

 

 

 

Federal Express Europe, Inc.

 

Delaware

 

3610 Hacks Cross Road
Memphis TN  38125

 

 

 

 

 

 

 

Federal Express Europe, Inc. & Co., V.O.F./S.N.C.

 

Belgium

 

Airport Building 119
1820 Melsbroek, Belgium

 

 

 

 

 

 

 

Federal Express Holdings S.A.

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express Holdings (Mexico) y Compania S.N.C. de C.V.

 

Mexico

 

Calle Insurgentes
Sur 899
Napoles 03810
Mexico D.F., Mexico

 

 

 

 

 

 

 

Federal Express International, Inc.

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

--------------------------------------------------------------------------------

 

Subsidiary

 

Jurisdiction of
Organization

 

Address of Subsidiary’s
Executive Offices

 

 

 

 

 

 

 

Federal Express Japan K.K.

 

Japan

 

World Business Garden
Marine West
2-6 Nakase, Mihama-ku,
Chiba-shi
Chiba 261-7110, Japan

 

 

 

 

 

 

 

Federal Express Pacific, Inc.

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express (Singapore) Pte. Ltd.

 

Singapore

 

No. 6 Changi South St. 2
Singapore 486349

 

 

 

 

 

 

 

Federal Express Virgin Islands, Inc.

 

U.S. Virgin Islands

 

Havensite Mall
Charlotte Amalie
St. Thomas,
U.S. Virgin Islands

 

 

 

 

 

 

 

FedEx Corporate Services, Inc.

 

Delaware

 

942 S. Shady Grove Road
Memphis, TN  38120

 

 

 

 

 

 

 

FedEx Custom Critical, Inc.

 

Ohio

 

1475 Boettler Road
Uniontown, OH  44685

 

 

 

 

 

 

 

FedEx Freight Corporation
(formerly FedEx Freight System, Inc.)

 

Delaware

 

1715 Aaron Brenner Drive,
Suite 600
Memphis, TN  38120

 

 

 

 

 

 

 

FedEx Ground Package System, Inc.

 

Delaware

 

1000 FedEx Drive
Moon Township, PA  15108

 

 

 

 

 

 

 

FedEx Ground Package System, Ltd.

 

Wyoming

 

3930 Nashua Drive, Suite 201
Mississauga, Ontario L4V 1M5

 

 

 

 

 

 

 

FedEx Supply Chain Services, Inc.

 

Ohio

 

5455 Darrow Road
Hudson, OH  44236

 

 

 

 

 

 

 

FedEx Trade Networks, Inc.

 

Delaware

 

6075 Poplar Avenue, Suite 422
Memphis, TN  38119

 

 

 

 

 

 

 

FedEx Trade Networks Transport & Brokerage, Inc.
(formerly Tower Group International, Inc.)

 

New York

 

128 Dearborn Street
Buffalo, NY  14207

 

 

--------------------------------------------------------------------------------

 

Subsidiary

 

Jurisdiction of
Organization

 

Address of Subsidiary’s
Executive Offices

 

 

 

 

 

 

 

FedEx Trade Networks Transport & Brokerage
(Canada), Inc. (formerly Tower Group International Canada Inc.)

 

Canada

 

5915 Airport Rd., Suite 1100
Mississauga, Ontario LV4 1T1

 

 

 

 

 

 

 

FedEx Freight West, Inc. (formerly Viking Freight, Inc.)

 

California

 

6411 Guadalupe Mines Road
San Jose, CA  95120

 

 

 

 

 

 

 

World Tariff, Limited

 

California

 

220 Montgomery Street, Suite
448
San Francisco, CA  94104

 

 

--------------------------------------------------------------------------------

 

Exhibit A

 

FORM OF BORROWING REQUEST

 

Pursuant to Section 2.03 of the Credit Agreement dated as of February 11, 2004
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among FEDEX CORPORATION, a Delaware corporation (the “Borrower”),
the several banks and other financial institutions from time to time parties to
this Agreement (the “Lenders”), JPMORGAN CHASE BANK, a New York banking
corporation, as administrative agent (in such capacity, the “Administrative
Agent”), CITICORP USA, INC. and BANK OF AMERICA, N.A., as Co-Syndication Agents,
and BANK ONE, NA, BANK OF TOKYO-MITSUBISHI TRUST COMPANY, COMMERZBANK A.G. and
MERRILL LYNCH BANK USA, as Co-Documentation Agents, the undersigned hereby
delivers this Borrowing Request.

 

The Borrower hereby requests that a [Eurodollar / ABR] Loan be made in the
aggregate principal amount of                              on            , 200  
[with an Interest Period of 7 days/     months].

 

The undersigned hereby certifies as follows:

 

(A)                                  THE REPRESENTATIONS AND WARRANTIES MADE BY
THE BORROWER IN OR PURSUANT TO THE LOAN DOCUMENTS ARE TRUE AND CORRECT ON AND AS
OF THE DATE HEREOF WITH THE SAME EFFECT AS IF MADE ON THE DATE HEREOF; AND

 

(B)                                 NO DEFAULT HAS OCCURRED AND IS CONTINUING ON
THE DATE HEREOF OR AFTER GIVING EFFECT TO THE LOANS REQUESTED TO BE MADE ON SUCH
DATE.

 

Capitalized terms used herein and not defined herein shall have the meanings
given to them in the Credit Agreement.

 

The Borrower agrees that if prior to the time of the borrowing requested hereby
any matter certified to herein by it will not be true and correct in all
material respects at such time as if then made, it will immediately so notify
the Administrative Agent.  Except to the extent, if any, that prior to the time
of the borrowing requested hereby the Administrative Agent shall receive written
notice to the contrary from the Borrower, each matter certified to herein shall
be deemed once again to be certified as true and correct in all material
respects at the date of such borrowings as if then made.

 

--------------------------------------------------------------------------------

 

Please wire transfer the proceeds of the borrowing as directed by the Borrower
on the attached Schedule 1.

 

The Borrower has caused this Borrowing Request to be executed and delivered, and
the certification and warranties contained herein to be made, by the undersigned
Financial Officer this       day of       , 200  .

 

 

FEDEX CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

2

--------------------------------------------------------------------------------

 

Exhibit B

 

FORM OF INTEREST ELECTION REQUEST

 

Pursuant to subsection 2.05(b) of the Credit Agreement, dated as of February 11,
2004 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among FEDEX CORPORATION, a Delaware corporation (the
“Borrower”), the several banks and other financial institutions from time to
time parties to this Agreement (the “Lenders”), JPMORGAN CHASE BANK, a New York
banking corporation, as administrative agent (in such capacity, the
“Administrative Agent”), CITICORP USA, INC. and BANK OF AMERICA, N.A., as
Co-Syndication Agents, and BANK ONE, NA, BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
COMMERZBANK A.G. and MERRILL LYNCH BANK USA, as Co-Documentation Agents, this
represents the Borrower’s request to convert or continue Loans as follows:

 

1                                          Date of conversion/continuation:

 

2.                                       Amount of Loans being
converted/continued: $

 

3.                                       Type of Loans being
converted/continued:

 

o                                    a.                                      
Eurodollar Loans

o                                    b.                                      ABR
Loans

 

4.                                       Nature of conversion/continuation:

 

o                                    a.                                      
Conversion of ABR Loans to Eurodollar ABR Loans

o                                    b.                                     
Conversion of Eurodollar Loans to ABR Loans

o                                    c.                                      
Continuation of Eurodollar Loans as such

 

5.                                       Interest Periods:

 

If Loans are being continued as or converted to Eurodollar Loans, the duration
of the new Interest Period that commences on the conversion/ continuation date:
7 days/      month(s)

 

--------------------------------------------------------------------------------

 

In the case of a conversion to or continuation of Eurodollar Loans, the
undersigned officer, to the best of his or her knowledge, on behalf of the
Borrower, certifies that no Default or Event of Default has occurred and is
continuing under the Credit Agreement.

 

DATED:

 

 

FEDEX CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

2

--------------------------------------------------------------------------------

 

Exhibit C

 

FORM OF GUARANTEE AGREEMENT

 

THIS GUARANTY (this “Guaranty”) is made as of the 11th day of February, 2004, by
each Subsidiary listed on Schedule I hereto (collectively, the “Initial
Guarantors”, and together with each Subsidiary which becomes a party to this
Agreement by executing an Addendum hereto in the form attached as Annex I, the
“Guarantors”) in favor of the Administrative Agent, for the ratable benefit of
the Lenders, under (and as defined in) the Credit Agreement referred to below.

 

W I T N E S S E T H:

 

WHEREAS, FedEx Corporation, a Delaware corporation (the “Borrower”), JPMorgan
Chase Bank, as administrative agent (in such capacity, the “Administrative
Agent”), and certain Lenders have entered into a certain Credit Agreement dated
as of February 11, 2004 (as the same may be amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), providing, subject to the
terms and conditions thereof, for extensions of credit to be made by the Lenders
to the Borrower;

 

WHEREAS, it is a condition precedent to the initial extensions of credit by the
Lenders under the Credit Agreement that each of the Guarantors execute and
deliver this Guaranty, whereby each of the Guarantors shall guarantee the
payment when due, subject to Section 8 hereof, of any and all of the
Obligations; and

 

WHEREAS, in consideration of the financial and other support that the Borrower
has provided, and such financial and other support as the Borrower may in the
future provide, to the Guarantors, and in order to induce the Lenders and the
Administrative Agent to enter into the Credit Agreement, each of the Guarantors
is willing to guarantee the Obligations of the Borrower under the Credit
Agreement;

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

SECTION 1.                         Definitions.  Unless otherwise defined
herein, capitalized terms used herein shall have the meanings ascribed to them
in the Credit Agreement.

 

SECTION 2.                         Representations And Warranties.  Each of the
Guarantors represents and warrants (which representations and warranties shall
be deemed to have been renewed at the time of each borrowing by the Borrower
under the Credit Agreement) that:

 

(A)                                  IT IS A CORPORATION, LIMITED LIABILITY
COMPANY, PARTNERSHIP OR OTHER COMMERCIAL ENTITY DULY INCORPORATED OR FORMED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS JURISDICTION OF
INCORPORATION OR FORMATION AND HAS ALL REQUISITE AUTHORITY TO CONDUCT ITS
BUSINESS AS A FOREIGN PERSON IN EACH JURISDICTION IN WHICH ITS BUSINESS IS
CONDUCTED, EXCEPT WHERE THE FAILURE TO HAVE SUCH REQUISITE AUTHORITY WOULD NOT
HAVE A MATERIAL ADVERSE EFFECT.

 

(B)                                 IT HAS THE POWER AND AUTHORITY AND LEGAL
RIGHT TO EXECUTE AND DELIVER THIS GUARANTY AND TO PERFORM ITS OBLIGATIONS
HEREUNDER.  THE EXECUTION AND DELIVERY BY IT OF THIS

 

--------------------------------------------------------------------------------

 

GUARANTY AND THE PERFORMANCE BY IT OF ITS OBLIGATIONS HEREUNDER HAVE BEEN DULY
AUTHORIZED BY PROPER PROCEEDINGS, AND THIS GUARANTY CONSTITUTES A LEGAL, VALID
AND BINDING OBLIGATION OF SUCH GUARANTOR ENFORCEABLE AGAINST SUCH GUARANTOR IN
ACCORDANCE WITH ITS TERMS, EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY
BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING THE ENFORCEMENT OF CREDITORS’
RIGHTS GENERALLY, AND SUBJECT ALSO TO THE AVAILABILITY OF EQUITABLE REMEDIES IF
EQUITABLE REMEDIES ARE SOUGHT.

 

(C)                                  NEITHER THE EXECUTION AND DELIVERY BY IT OF
THIS GUARANTY, NOR THE CONSUMMATION BY IT OF THE TRANSACTIONS HEREIN
CONTEMPLATED, NOR COMPLIANCE BY IT WITH THE TERMS AND PROVISIONS HEREOF, WILL
VIOLATE ANY LAW, RULE, REGULATION, ORDER, WRIT, JUDGMENT, INJUNCTION, DECREE OR
AWARD BINDING ON IT OR ITS CERTIFICATE OR ARTICLES OF INCORPORATION OR BY-LAWS,
LIMITED LIABILITY COMPANY OR PARTNERSHIP AGREEMENT OR THE PROVISIONS OF ANY
INDENTURE, INSTRUMENT OR MATERIAL AGREEMENT TO WHICH IT IS A PARTY OR IS
SUBJECT, OR BY WHICH IT, OR ITS PROPERTY, IS BOUND, OR CONFLICT WITH OR
CONSTITUTE A DEFAULT THEREUNDER, OR RESULT IN THE CREATION OR IMPOSITION OF ANY
LIEN IN, OF OR ON ITS PROPERTY PURSUANT TO THE TERM OF ANY SUCH INDENTURE,
INSTRUMENT OR MATERIAL AGREEMENT.  NO ORDER, CONSENT, APPROVAL, LICENSE,
AUTHORIZATION, OR VALIDATION OF, OR FILING, RECORDING OR REGISTRATION WITH, OR
EXEMPTION BY, ANY GOVERNMENTAL AUTHORITY, IS REQUIRED TO AUTHORIZE, OR IS
REQUIRED IN CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE BY IT OF, OR
THE LEGALITY, VALIDITY, BINDING EFFECT OR ENFORCEABILITY OF, THIS GUARANTY.

 

SECTION 3.                                The Guaranty.  Subject to Section 8
hereof, each of the Guarantors hereby unconditionally guarantees, jointly with
the other Guarantors and severally, the full and punctual payment when due
(whether at stated maturity, upon acceleration or otherwise) of the Obligations,
(the foregoing, subject to the provisions of Section 8 hereof, being referred to
collectively as the “Guaranteed Obligations”).  Upon failure by the Borrower to
pay punctually any such amount, each of the Guarantors agrees that it shall
forthwith on demand pay such amount at the place and in the manner specified in
the Credit Agreement or the relevant Loan Document, as the case may be.  Each of
the Guarantors hereby agrees that this Guaranty is an absolute, irrevocable and
unconditional guaranty of payment and is not a guaranty of collection.

 

SECTION 4.                                Guaranty Unconditional.  Subject to
Section 8 hereof, the obligations of each of the Guarantors hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:

 

(A)                                  ANY EXTENSION, RENEWAL, SETTLEMENT,
INDULGENCE, COMPROMISE, WAIVER OR RELEASE OF OR WITH RESPECT TO THE GUARANTEED
OBLIGATIONS OR ANY PART THEREOF OR ANY AGREEMENT RELATING THERETO, OR WITH
RESPECT TO ANY OBLIGATION OF ANY OTHER GUARANTOR OF ANY OF THE GUARANTEED
OBLIGATIONS, WHETHER (IN ANY SUCH CASE) BY OPERATION OF LAW OR OTHERWISE, OR ANY
FAILURE OR OMISSION TO ENFORCE ANY RIGHT, POWER OR REMEDY WITH RESPECT TO THE
GUARANTEED OBLIGATIONS OR ANY PART THEREOF OR ANY AGREEMENT RELATING THERETO, OR
WITH RESPECT TO ANY OBLIGATION OF ANY OTHER GUARANTOR OF ANY OF THE GUARANTEED
OBLIGATIONS;

 

(B)                                 ANY MODIFICATION OR AMENDMENT OF OR
SUPPLEMENT TO THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT, INCLUDING,
WITHOUT LIMITATION, ANY SUCH AMENDMENT WHICH MAY INCREASE THE AMOUNT OF THE
OBLIGATIONS GUARANTEED HEREBY;

 

(C)                                  ANY RELEASE, SURRENDER, COMPROMISE,
SETTLEMENT, WAIVER, SUBORDINATION OR MODIFICATION, WITH OR WITHOUT
CONSIDERATION, OF ANY COLLATERAL SECURING THE GUARANTEED

 

2

--------------------------------------------------------------------------------

 

OBLIGATIONS OR ANY PART THEREOF, ANY OTHER GUARANTIES WITH RESPECT TO THE
GUARANTEED OBLIGATIONS OR ANY PART THEREOF, OR ANY OTHER OBLIGATION OF ANY
PERSON OR ENTITY WITH RESPECT TO THE GUARANTEED OBLIGATIONS OR ANY PART THEREOF,
OR ANY NONPERFECTION OR INVALIDITY OF ANY DIRECT OR INDIRECT SECURITY FOR THE
GUARANTEED OBLIGATIONS;

 

(D)                                 ANY CHANGE IN THE CORPORATE, PARTNERSHIP OR
OTHER EXISTENCE, STRUCTURE OR OWNERSHIP OF THE BORROWER OR ANY OTHER GUARANTOR
OF ANY OF THE GUARANTEED OBLIGATIONS, OR ANY INSOLVENCY, BANKRUPTCY,
REORGANIZATION OR OTHER SIMILAR PROCEEDING AFFECTING THE BORROWER OR ANY OTHER
GUARANTOR OF THE GUARANTEED OBLIGATIONS, OR ANY OF THEIR RESPECTIVE ASSETS OR
ANY RESULTING RELEASE OR DISCHARGE OF ANY OBLIGATION OF THE BORROWER OR ANY
OTHER GUARANTOR OF ANY OF THE GUARANTEED OBLIGATIONS;

 

(E)                                  THE EXISTENCE OF ANY CLAIM, SETOFF OR OTHER
RIGHTS WHICH THE GUARANTORS MAY HAVE AT ANY TIME AGAINST THE BORROWER, ANY OTHER
GUARANTOR OF ANY OF THE GUARANTEED OBLIGATIONS, THE ADMINISTRATIVE AGENT, ANY
LENDER OR ANY OTHER PERSON, WHETHER IN CONNECTION HEREWITH OR IN CONNECTION WITH
ANY UNRELATED TRANSACTIONS, PROVIDED THAT NOTHING HEREIN SHALL PREVENT THE
ASSERTION OF ANY SUCH CLAIM BY SEPARATE SUIT OR COMPULSORY COUNTERCLAIM;

 

(F)                                    THE ENFORCEABILITY OR VALIDITY OF THE
GUARANTEED OBLIGATIONS OR ANY PART THEREOF OR THE GENUINENESS, ENFORCEABILITY OR
VALIDITY OF ANY AGREEMENT RELATING THERETO OR WITH RESPECT TO ANY COLLATERAL
SECURING THE GUARANTEED OBLIGATIONS OR ANY PART THEREOF, OR ANY OTHER INVALIDITY
OR UNENFORCEABILITY RELATING TO OR AGAINST THE BORROWER OR ANY OTHER GUARANTOR
OF ANY OF THE GUARANTEED OBLIGATIONS, FOR ANY REASON RELATED TO THE CREDIT
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY PROVISION OF APPLICABLE LAW OR
REGULATION PURPORTING TO PROHIBIT THE PAYMENT BY THE BORROWER OR ANY OTHER
GUARANTOR OF THE GUARANTEED OBLIGATIONS, OF ANY OF THE GUARANTEED OBLIGATIONS;

 

(G)                                 THE FAILURE OF THE ADMINISTRATIVE AGENT TO
TAKE ANY STEPS TO PERFECT AND MAINTAIN ANY SECURITY INTEREST IN, OR TO PRESERVE
ANY RIGHTS TO, ANY SECURITY OR COLLATERAL FOR THE GUARANTEED OBLIGATIONS, IF
ANY;

 

(H)                                 THE ELECTION BY, OR ON BEHALF OF, ANY ONE OR
MORE OF THE LENDERS, IN ANY PROCEEDING INSTITUTED UNDER CHAPTER 11 OF TITLE 11
OF THE UNITED STATES CODE (11 U.S.C. 101 ET SEQ.) (THE “BANKRUPTCY CODE”), OF
THE APPLICATION OF SECTION 1111(B)(2) OF THE BANKRUPTCY CODE;

 

(I)                                     ANY BORROWING OR GRANT OF A SECURITY
INTEREST BY THE BORROWER, AS DEBTOR-IN-POSSESSION, UNDER SECTION 364 OF THE
BANKRUPTCY CODE;

 

(J)                                     THE DISALLOWANCE, UNDER SECTION 502 OF
THE BANKRUPTCY CODE, OF ALL OR ANY PORTION OF THE CLAIMS OF ANY OF THE LENDERS
OR THE ADMINISTRATIVE AGENT FOR REPAYMENT OF ALL OR ANY PART OF THE GUARANTEED
OBLIGATIONS;

 

(K)                                  THE FAILURE OF ANY OTHER GUARANTOR TO SIGN
OR BECOME PARTY TO THIS GUARANTY OR ANY AMENDMENT, CHANGE, OR REAFFIRMATION
HEREOF; OR

 

(L)                                     ANY OTHER ACT OR OMISSION TO ACT OR
DELAY OF ANY KIND BY THE BORROWER, ANY OTHER GUARANTOR OF THE GUARANTEED
OBLIGATIONS, THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY

 

3

--------------------------------------------------------------------------------

 

OTHER PERSON OR ANY OTHER CIRCUMSTANCE WHATSOEVER WHICH MIGHT, BUT FOR THE
PROVISIONS OF THIS SECTION 4, CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OF ANY
GUARANTOR’S OBLIGATIONS HEREUNDER.

 

SECTION 5.                                Discharge Only Upon Payment In Full;
Reinstatement In Certain Circumstances.  Except as otherwise provided in Section
9.14 of the Credit Agreement, each of the Guarantors’ obligations hereunder
shall remain in full force and effect until all Guaranteed Obligations shall
have been paid in full and the Commitments under the Credit Agreement shall have
terminated or expired. If at any time any payment of any portion of the
Obligations is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, each
Guarantor’s obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.

 

SECTION 6.                                General Waivers.  Each of the
Guarantors irrevocably waives acceptance hereof, presentment, demand or action
on delinquency, protest, the benefit of any statutes of limitations and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Borrower, any other guarantor of the Guaranteed Obligations, or any other
Person.

 

SECTION 7                                   Subordination Of Subrogation.  Until
the Obligations have been indefeasibly paid in full in cash and the Commitments
under the Credit Agreement shall have terminated or expired, the Guarantors
(i) shall have no right of subrogation with respect to such Obligations and
(ii) waive any right to enforce any remedy which the Lenders or the
Administrative Agent now have or may hereafter have against the Borrower, any
endorser or any guarantor of all or any part of the Obligations or any other
Person, and the Guarantors waive any benefit of, and any right to participate
in, any security or collateral given to the Lenders and the Administrative Agent
to secure the payment or performance of all or any part of the Obligations or
any other liability of the Borrower to the Lenders. Should any Guarantor have
the right, notwithstanding the foregoing, to exercise its subrogation rights,
each Guarantor hereby expressly and irrevocably (a) subordinates any and all
rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off that the Guarantor may have to the
indefeasible payment in full in cash of the Obligations and (b) waives any and
all defenses available to a surety, guarantor or accommodation co-obligor until
the Obligations are indefeasibly paid in full in cash. Each Guarantor
acknowledges and agrees that this subordination is intended to benefit the
Administrative Agent and the Lenders and shall not limit or otherwise affect
such Guarantor’s liability hereunder or the enforceability of this Guaranty, and
that the Administrative Agent, the Lenders and their respective successors and
assigns are intended third party beneficiaries of the waivers and agreements set
forth in this Section 7.

 

SECTION 8.                                Limitation.  Notwithstanding any
provision herein contained to the contrary, each Guarantor’s liability under
this Guaranty (which liability is in any event in addition to amounts for which
such entity may be primarily liable) shall be limited to an amount not to exceed
as of any date of determination the greater of:

 

(A)                                  THE NET AMOUNT OF ALL LOANS ADVANCED TO THE
BORROWER UNDER THIS AGREEMENT AND THEN RE-LOANED OR OTHERWISE TRANSFERRED TO, OR
FOR THE BENEFIT OF, SUCH GUARANTOR; AND

 

(B)                                 THE AMOUNT WHICH COULD BE CLAIMED BY THE
ADMINISTRATIVE AGENT AND THE LENDERS FROM SUCH GUARANTOR UNDER THIS GUARANTY
WITHOUT RENDERING SUCH CLAIM VOIDABLE OR AVOIDABLE UNDER SECTION 548 OF CHAPTER
11 OF THE BANKRUPTCY CODE OR UNDER ANY APPLICABLE

 

4

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STATE UNIFORM FRAUDULENT TRANSFER ACT, UNIFORM FRAUDULENT CONVEYANCE ACT OR
SIMILAR STATUTE OR COMMON LAW AFTER TAKING INTO ACCOUNT, AMONG OTHER THINGS,
SUCH GUARANTOR’S RIGHT OF CONTRIBUTION AND INDEMNIFICATION FROM EACH OTHER
GUARANTOR UNDER SECTION 9.

 

SECTION 9.                                Contribution With Respect To Guaranty
Obligations.

 

(A)                                  TO THE EXTENT THAT ANY GUARANTOR SHALL MAKE
A PAYMENT UNDER THIS GUARANTY (A “GUARANTOR PAYMENT”) WHICH, TAKING INTO ACCOUNT
ALL OTHER GUARANTOR PAYMENTS THEN PREVIOUSLY OR CONCURRENTLY MADE BY ANY OTHER
GUARANTOR, EXCEEDS THE AMOUNT WHICH SUCH GUARANTOR WOULD OTHERWISE HAVE PAID IF
EACH GUARANTOR HAD PAID THE AGGREGATE OBLIGATIONS SATISFIED BY SUCH GUARANTOR
PAYMENT IN THE SAME PROPORTION THAT SUCH GUARANTOR’S “ALLOCABLE AMOUNT” (AS
DEFINED BELOW) (AS DETERMINED IMMEDIATELY PRIOR TO SUCH GUARANTOR PAYMENT) BORE
TO THE AGGREGATE ALLOCABLE AMOUNTS OF EACH OF THE GUARANTORS AS DETERMINED
IMMEDIATELY PRIOR TO THE MAKING OF SUCH GUARANTOR PAYMENT, THEN, FOLLOWING
INDEFEASIBLE PAYMENT IN FULL IN CASH OF THE OBLIGATIONS AND TERMINATION OR
EXPIRATION OF THE COMMITMENTS UNDER THE CREDIT AGREEMENT, SUCH GUARANTOR SHALL
BE ENTITLED TO RECEIVE CONTRIBUTION AND INDEMNIFICATION PAYMENTS FROM, AND BE
REIMBURSED BY, EACH OTHER GUARANTOR FOR THE AMOUNT OF SUCH EXCESS, PRO RATA
BASED UPON THEIR RESPECTIVE ALLOCABLE AMOUNTS IN EFFECT IMMEDIATELY PRIOR TO
SUCH GUARANTOR PAYMENT.

 

(B)                                 AS OF ANY DATE OF DETERMINATION, THE
“ALLOCABLE AMOUNT” OF ANY GUARANTOR SHALL BE EQUAL TO THE MAXIMUM AMOUNT OF THE
CLAIM WHICH COULD THEN BE RECOVERED FROM SUCH GUARANTOR UNDER THIS GUARANTY
WITHOUT RENDERING SUCH CLAIM VOIDABLE OR AVOIDABLE UNDER SECTION 548 OF CHAPTER
11 OF THE BANKRUPTCY CODE OR UNDER ANY APPLICABLE STATE UNIFORM FRAUDULENT
TRANSFER ACT, UNIFORM FRAUDULENT CONVEYANCE ACT OR SIMILAR STATUTE OR COMMON
LAW.

 

(C)                                  THIS SECTION 9 IS INTENDED ONLY TO DEFINE
THE RELATIVE RIGHTS OF THE GUARANTORS AND NOTHING SET FORTH IN THIS SECTION 9 IS
INTENDED TO OR SHALL IMPAIR THE OBLIGATIONS OF THE GUARANTORS, JOINTLY AND
SEVERALLY, TO PAY ANY AMOUNTS AS AND WHEN THE SAME SHALL BECOME DUE AND PAYABLE
IN ACCORDANCE WITH THE TERMS OF THIS GUARANTY.

 

(D)                                 THE PARTIES HERETO ACKNOWLEDGE THAT THE
RIGHTS OF CONTRIBUTION AND INDEMNIFICATION HEREUNDER SHALL CONSTITUTE ASSETS OF
THE GUARANTOR TO WHICH SUCH CONTRIBUTION AND INDEMNIFICATION IS OWING.

 

(E)                                  THE RIGHTS OF THE INDEMNIFYING GUARANTORS
AGAINST OTHER GUARANTORS UNDER THIS SECTION 9 SHALL BE EXERCISABLE UPON THE FULL
AND INDEFEASIBLE PAYMENT OF THE OBLIGATIONS AND THE TERMINATION OR EXPIRATION OF
THE COMMITMENTS UNDER THE CREDIT AGREEMENT.

 

SECTION 10.                          Stay Of Acceleration.  If acceleration of
the time for payment of any of the Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of the Credit Agreement, or any other Loan
Document shall nonetheless be payable by each of the Guarantors hereunder
forthwith on demand by the Administrative Agent.

 

SECTION 11.                          No Waivers.  No failure or delay by the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the

 

5

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exercise of any other right, power or privilege. The rights and remedies
provided in this Guaranty, the Credit Agreement, and the other Loan Documents
shall be cumulative and not exclusive of any rights or remedies provided by law.

 

SECTION 12.                          Successors And Assigns.  This Guaranty is
for the benefit of the Administrative Agent and the Lenders and their respective
successors and permitted assigns and in the event of an assignment of any
amounts payable under the Credit Agreement, or the other Loan Documents in
accordance with the respective terms thereof, the rights hereunder, to the
extent applicable to the indebtedness so assigned, may be transferred with such
indebtedness.  This Guaranty shall be binding upon each of the Guarantors and
their respective successors and assigns.

 

SECTION 13.                          Changes In Writing.  Neither this Guaranty
nor any provision hereof may be changed, waived, discharged or terminated
orally, but only in writing signed by each of the Guarantors and the
Administrative Agent with the consent of the Lenders required for such change,
waiver, discharge or termination pursuant to the terms of the Credit Agreement.

SECTION

 

SECTION 14.                          GOVERNING LAW.  ANY DISPUTE BETWEEN ANY
GUARANTOR AND THE ADMINISTRATIVE AGENT OR ANY LENDER ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

 

SECTION 15.                          CONSENT TO JURISDICTION; SERVICE OF
PROCESS; JURY TRIAL.

 

(a)                                  EXCLUSIVE JURISDICTION.  EXCEPT AS PROVIDED
IN SUBSECTION (B), EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG
THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS GUARANTY OR ANY OF
THE OTHER LOAN DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN
NEW YORK, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK.  EACH OF THE
PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A)
ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.

 

(b)                                 OTHER JURISDICTIONS.  EACH OF THE GUARANTORS
AGREES THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY INDEMNITEE SHALL HAVE
THE RIGHT TO PROCEED AGAINST SUCH GUARANTOR OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER SUCH
GUARANTOR OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
SUCH PERSON.  EACH OF THE GUARANTORS AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON.  EACH OF THE GUARANTORS
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH

 

6

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SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).

 

(c)                                  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH.  EACH OF THE PARTIES
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS GUARANTY WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

 

(d)                                 ADVICE OF COUNSEL.  EACH OF THE PARTIES
REPRESENTS TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND,
SPECIFICALLY, THE PROVISIONS OF THIS SECTION 15, WITH ITS COUNSEL.

 

SECTION 16.                          No Strict Construction.  The parties hereto
have participated jointly in the negotiation and drafting of this Guaranty. In
the event an ambiguity or question of intent or interpretation arises, this
Guaranty shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Guaranty.

 

SECTION 17.                          Taxes, Expenses Of Enforcement, Etc.  All
payments required to be made by any of the Guarantors hereunder shall be made
without setoff or counterclaim and free and clear of and without deduction or
withholding for or on account of, any present or future taxes, levies, imposts,
duties or other charges of whatsoever nature imposed by any government or any
political or taxing authority thereof; provided, however, that if any of the
Guarantors is required by law to make such deduction or withholding, such
Guarantor shall forthwith pay to the Administrative Agent or any Lender, as
applicable, such additional amount as results in the net amount received by the
Administrative Agent or any Lender, as applicable, equaling the full amount
which would have been received by the Administrative Agent or any Lender, as
applicable, had no such deduction or withholding been made.  The Guarantors also
agree to reimburse the Administrative Agent and the Lenders for any reasonable
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys’ fees and time charges of attorneys for the Administrative Agent and
the Lenders, which attorneys may be employees of the Administrative Agent or the
Lenders) paid or incurred by the Administrative Agent or any Lender in
connection with the collection and enforcement of amounts due under the Loan
Documents, including without limitation this Guaranty.

 

SECTION 18.                          Setoff.  At any time after all or any part
of the Guaranteed Obligations have become due and payable (by acceleration or
otherwise), each Lender and the Administrative Agent may, without notice to any
Guarantor and regardless of the acceptance of any security or collateral for the
payment hereof, appropriate and apply toward the payment of all or any part of
the Guaranteed Obligations (i) any indebtedness due or to become due from such
Lender or the Administrative Agent to any Guarantor, and (ii) any moneys,
credits or other property belonging to

 

7

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any Guarantor, at any time held by or coming into the possession of such Lender
or the Administrative Agent or any of their respective affiliates.

 

SECTION 19.                          Financial Information.  Each Guarantor
hereby assumes responsibility for keeping itself informed of the financial
condition of the Borrower and any and all endorsers and/or other Guarantors of
all or any part of the Guaranteed Obligations, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations, or any part
thereof, that diligent inquiry would reveal, and each Guarantor hereby agrees
that none of the Lenders or the Administrative Agent shall have any duty to
advise such Guarantor of information known to any of them regarding such
condition or any such circumstances.  If any Lender or the Administrative Agent,
in its sole discretion, undertakes at any time or from time to time to provide
any such information to a Guarantor, such Lender or the Administrative Agent
shall be under no obligation (i) to undertake any investigation not a part of
its regular business routine, (ii) to disclose any information which such Lender
or the Administrative Agent, pursuant to accepted or reasonable commercial
finance or banking practices, wishes to maintain confidential or (iii) to make
any other or future disclosures of such information or any other information to
such Guarantor.

 

SECTION 20.                          Severability.  Wherever possible, each
provision of this Guaranty shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Guaranty
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Guaranty.

 

SECTION 21.                          Merger.  This Guaranty represents the final
agreement of each of the Guarantors with respect to the matters contained herein
and may not be contradicted by evidence of prior or contemporaneous agreements,
or subsequent oral agreements, between the Guarantor and any Lender or the
Administrative Agent.

 

SECTION 22.                          Execution In Counterparts.  This Guaranty
may be executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may execute this
Guaranty by signing any such counterpart.

 

SECTION 23.                          Headings.  Section headings in this
Guaranty are for convenience of reference only and shall not govern the
interpretation of any provision of this Guaranty.

 

8

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IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty to be duly
executed by its authorized officer as of the day and year first above written.

 

 

[GUARANTORS]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

9

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SCHEDULE I TO GUARANTY

 

Subsidiary

 

Jurisdiction of Organization

 

Address of Subsidiary’s
Executive Offices

 

 

 

 

 

 

 

FedEx Freight East, Inc.
(formerly American Freightways, Inc.)

 

Arkansas

 

2200 Forward Drive
Harrison, AR  72601

 

 

 

 

 

 

 

Caribbean Transportation Services, Inc.

 

Delaware

 

7304 West Market Street
Greensboro, NC  27409

 

 

 

 

 

 

 

Federal Express Corporation

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express (Australia) Pty. Ltd.

 

Australia

 

215-225 Euston Road
Alexandria NSW 2015
Australia

 

 

 

 

 

 

 

Federal Express Aviation Services, Incorporated

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express Canada Ltd.

 

Canada

 

5895 Explorer Drive
Mississauga, Ontario L4W 5K6

 

 

 

 

 

 

 

Federal Express Europe, Inc.

 

Delaware

 

3610 Hacks Cross Road
Memphis TN  38125

 

 

 

 

 

 

 

Federal Express Europe, Inc. & Co., V.O.F./S.N.C.

 

Belgium

 

Airport Building 119 1820
Melsbroek, Belgium

 

 

 

 

 

 

 

Federal Express Holdings S.A.

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express Holdings
(Mexico) y Compania S.N.C. de C.V.

 

Mexico

 

Calle Insurgentes
Sur 899
Napoles 03810
Mexico D.F., Mexico

 

 

 

 

 

 

 

Federal Express International, Inc.

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express Japan K.K.

 

Japan

 

World Business Garden
Marine West
2-6 Nakase, Mihama-ku,
Chiba-shi
Chiba 261-7110, Japan

 

 

--------------------------------------------------------------------------------

 

Subsidiary

 

Jurisdiction of Organization

 

Address of Subsidiary’s
Executive Offices

 

 

 

 

 

 

 

Federal Express Pacific, Inc.

 

Delaware

 

3610 Hacks Cross Road
Memphis, TN  38125

 

 

 

 

 

 

 

Federal Express (Singapore) Pte. Ltd.

 

Singapore

 

No. 6 Changi South St. 2
Singapore 486349

 

 

 

 

 

 

 

Federal Express Virgin Islands, Inc.

 

U.S. Virgin Islands

 

Havensite Mall
Charlotte Amalie
St. Thomas,
U.S. Virgin Islands

 

 

 

 

 

 

 

FedEx Corporate Services, Inc.

 

Delaware

 

942 S. Shady Grove Road
Memphis, TN  38120

 

 

 

 

 

 

 

FedEx Custom Critical, Inc.

 

Ohio

 

1475 Boettler Road

Uniontown, OH  44685

 

 

 

 

 

 

 

FedEx Freight Corporation
(formerly FedEx Freight System, Inc.)

 

Delaware

 

1715 Aaron Brenner Drive,
Suite 600
Memphis, TN  38120

 

 

 

 

 

 

 

FedEx Ground Package System, Inc.

 

Delaware

 

1000 FedEx Drive
Moon Township, PA  15108

 

 

 

 

 

 

 

FedEx Ground Package System, Ltd.

 

Wyoming

 

3930 Nashua Drive, Suite 201
Mississauga, Ontario L4V 1M5

 

 

 

 

 

 

 

FedEx Supply Chain Services, Inc.

 

Ohio

 

5455 Darrow Road
Hudson, OH  44236

 

 

 

 

 

 

 

FedEx Trade Networks, Inc.

 

Delaware

 

6075 Poplar Avenue, Suite 422
Memphis, TN  38119

 

 

 

 

 

 

 

FedEx Trade Networks Transport & Brokerage, Inc.
(formerly Tower Group International, Inc.)

 

New York

 

128 Dearborn Street
Buffalo, NY  14207

 

 

 

 

 

 

 

FedEx Trade Networks Transport & Brokerage
(Canada), Inc. (formerly Tower Group International Canada Inc.)

 

Canada

 

5915 Airport Rd., Suite 1100
Mississauga, Ontario LV4 1T1

 

 

2

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Subsidiary

 

Jurisdiction of Organization

 

Address of Subsidiary’s
Executive Offices

 

 

 

 

 

 

 

FedEx Freight West, Inc.
(formerly Viking Freight, Inc.)

 

California

 

6411 Guadalupe Mines Road
San Jose, CA  95120

 

 

 

 

 

 

 

World Tariff, Limited

 

California

 

220 Montgomery Street,
Suite 448
San Francisco, CA  94104

 

 

3

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ANNEX I TO GUARANTY

 

FORM OF ADDENDUM

 

Reference is hereby made to the Guaranty (the “Guaranty”) made as of the 11th
day of February, 2004 by each Subsidiary listed on Schedule I thereto
(collectively, the “Initial Guarantors”, together with each Significant
Subsidiary which has become a party thereto and with the undersigned, the
“Guarantors”) in favor of the Administrative Agent, for the ratable benefit of
the Lenders, under the Credit Agreement.  Capitalized terms used herein and not
defined herein shall have the meanings given to them in the Guaranty. By its
execution below, the undersigned [NAME OF NEW GUARANTOR], a
                         , agrees to become, and does hereby become, a Guarantor
under the Guaranty and agrees to be bound by such Guaranty as if originally a
party thereto.  By its execution below, the undersigned represents and warrants
as to itself that all of the representations and warranties contained in Section
2 of the Guaranty are true and correct in all respects as of the date hereof.

 

IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a                               
has executed and delivered this Addendum counterpart to the Guaranty as of this
             day of                             , 200  .

 

 

 

[NAME OF NEW GUARANTOR]

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

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Exhibit D

 

FORM OF OPINION OF BORROWER’S COUNSEL

 

[Letterhead of Christine P. Richards]

 

The Administrative Agent and the Lenders who are parties to the
Credit Agreement described below

February 11, 2004

Re:  Credit Facility

Ladies and Gentlemen:

 

I am the Corporate Vice President – Customer and Business Transactions and
Corporate Counsel of FedEx Corporation, a Delaware corporation (the “Borrower”),
and have acted as such in connection with the Credit Agreement dated as of
February 11, 2004 among the Borrower, the Lenders named therein, the
Co-Syndication Agents named therein, the Co-Documentation Agents named therein
and JPMorgan Chase Bank, as Administrative Agent (the “Agreement”).  This
opinion is being delivered pursuant to the provisions of Section 4.01(b) of the
Agreement.  Unless the context otherwise requires, all terms used in this
opinion which are specifically defined in the Agreement shall have the meanings
given such terms in the Agreement.

 

In connection with the opinions expressed below, I have examined the Loan
Documents and the other schedules, exhibits, certificates, instruments,
agreements and documents delivered in connection therewith.  I have relied upon
originals or copies, certified or otherwise identified to my satisfaction, of
such corporate records, documents and other instruments as in my judgment are
relevant to rendering the opinions expressed below.  As to any facts material to
the opinions expressed below (other than any thereof relating to the Borrower or
any Guarantor), I have relied upon the representations and warranties made in
the Loan Documents, the accuracy of which I have not independently investigated
or verified.  In such examination, I have assumed the genuineness of all
signatures (other than the signatures of the Borrower and any Guarantor) and the
authenticity of all documents submitted to me as originals and the conformity
with the originals of all documents submitted to me as copies.  I also have
assumed that each of the parties to the Agreement, other than the Borrower, has
full power, authority and legal right to enter into the Agreement and that the
Agreement has been duly authorized, executed and delivered by each of such
parties.

 

Based upon the foregoing, it is my opinion that:

 

1.                                       The Borrower is a corporation duly
incorporated and validly existing in good standing under the laws of the State
of Delaware.  The Borrower has the power and authority to execute and deliver
the Agreement and perform its obligations under the Agreement and to borrow
under the Agreement.  The Borrower has all corporate power required to carry on
its ordinary course of business.

 

--------------------------------------------------------------------------------

 

2.                                       Each Significant Subsidiary and each
Guarantor is a corporation duly incorporated and validly existing in good
standing under the laws of the jurisdiction of its incorporation.

 

3.                                       Each of the Borrower and each
Significant Subsidiary and Guarantor is duly qualified as a foreign corporation
in good standing to do business in all jurisdictions where the failure to so
qualify would have a material adverse effect on the business of the Borrower and
the Significant Subsidiaries taken as a whole.

 

4.                                       The consummation of the Kinko’s
Acquisition is within the Borrower’s corporate powers and authority.

 

5.                                       The execution and delivery of the Loan
Documents by the Borrower and each of the Guarantors and the consummation of the
transactions contemplated thereby, the borrowings by the Borrower under the
Agreement, the performance by the Borrower and the Guarantors of their
respective obligations under the Loan Documents and the consummation of the
Kinko’s Acquisition have been duly authorized by all necessary corporate action
and proceedings on the part of the Borrower and each Guarantor and do not at
this time:

 

(A)          REQUIRE ANY CONSENT OF THE BORROWER’S OR ANY GUARANTOR’S
SHAREHOLDERS, OR

 

(B)         CONTRAVENE, OR CONSTITUTE A DEFAULT UNDER, ANY PROVISION OF ANY LAW
OR REGULATION APPLICABLE TO THE BORROWER OR ANY GUARANTOR OR OF THE CERTIFICATE
OR ARTICLES OF INCORPORATION OR BYLAWS OF THE BORROWER OR ANY GUARANTOR OR OF
ANY MATERIAL CONTRACT, AGREEMENT, JUDGMENT, ORDER, DECREE, ADJUDICATION OR OTHER
INSTRUMENT BINDING UPON THE BORROWER OR ANY GUARANTOR, OR BY WHICH THE BORROWER
OR ANY GUARANTOR OR ANY OF THEIR RESPECTIVE PROPERTY MAY BE BOUND OR AFFECTED,
OR RESULT IN THE CREATION OF ANY LIEN ON ANY PROPERTY NOW OWNED BY THE BORROWER,
ANY GUARANTOR OR ANY SIGNIFICANT SUBSIDIARY PURSUANT TO THE PROVISIONS OF ANY
AGREEMENT, INDENTURE OR OTHER INSTRUMENT BINDING UPON IT.

 

6.                                       The Loan Documents delivered as of the
date hereof have been duly executed and delivered by the Borrower and each of
the Guarantors, and constitute the legal, valid and binding obligations of the
Borrower and the Guarantors, respectively, to the extent each is a party
thereto, enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.

 

7.                                       Except for the matters described under
Notes 1 and 11 to the financial statements included in the Borrower’s Quarterly
Report on Form 10-Q for the fiscal quarter ended November 30, 2003, as to all of
which I can express no opinion at this time concerning the Borrower’s or any
Subsidiary’s liability (if any) or the effect of

 

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any adverse determination upon the business, Property, condition (financial or
otherwise), results of operations, or prospects of the Borrower and its
Subsidiaries taken as a whole, or the ability of the Borrower to perform its
obligations under the Loan Documents, there is no action, suit, proceeding or
investigation of which I am aware pending or threatened against or affecting the
Borrower, any Guarantor or any Significant Subsidiary before any court,
regulatory commission, arbitration tribunal, governmental department,
administrative agency or instrumentality which, if such action, suit, proceeding
or investigation were determined adversely to the interest of the Borrower, the
Guarantors and the Significant Subsidiaries, would have a Material Adverse
Effect.

 

8.                                       Neither the Borrower nor any Guarantor
or Significant Subsidiary is in default or violation in any respect which would
have a Material Adverse Effect with respect to any law, rule, regulation, order,
writ, judgment, injunction, decree, adjudication, determination or award
presently in effect and applicable to it.

 

9.                                       No approval, authorization, consent,
adjudication or order of any governmental authority, which has not been obtained
by the Borrower or any Guarantor, is required to be obtained by the Borrower or
any Guarantor in connection with the execution and delivery of the Loan
Documents delivered as of the date hereof, the borrowings under the Agreement or
in connection with the performance by the Borrower or any of the Guarantors of
their respective obligations under the Loan Documents.

 

10.                                 The consummation of the Kinko’s Acquisition
does not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except (A) such as have been
obtained or made and are in full force and effect, (B) the filing of a
certificate of merger with the Delaware Secretary of State and appropriate
documents with the relevant authorities of other states in which the Borrower is
qualified to do business, (C) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder (the “HSR Act”) and of laws, rules and
regulations analogous to the HSR Act existing in foreign jurisdictions,
including Japan, South Korea and China, (D) compliance with any applicable
securities laws, and (E) any consents, approvals, registrations or filings, the
absence of which would not be reasonably expected to materially impair the
ability of the Borrower to consummate the Kinko’s Acquisition.

 

11.                                 The Borrower is not engaged principally or
as one of its important activities in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock and is not otherwise subject
to the registration requirements of Section 3(b) of Regulation U.

 

12.                                 The Borrower is not an “investment company,”
within the meaning of the Investment Company Act of 1940, as currently in
effect.

 

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13.                                 The laws of the State of Tennessee which
limit interest rates or other amounts payable with respect to borrowed money or
interest thereon are not applicable to the Agreement.

 

14.                                 Federal Express Corporation is not 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., Subtitle B, Chapter V, as amended.

 

15.                                 The certificates issued to Federal Express
Corporation pursuant to 49 U.S.C. §41102(a) and 49 U.S.C. §41103 and the
operating certificates issued to Federal Express Corporation pursuant to Part
119 of the Federal Aviation Regulations 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 my knowledge, threatened (or any basis therefor known to me) 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 the operations of
the Borrower and its Subsidiaries.

 

I do not express any opinion as to matters governed by any law other than the
federal laws of the United States of America, the General Corporation Law of the
State of Delaware and the laws of the State of Tennessee.  To the extent that
matters covered by this opinion letter involve the laws of any state other than
the State of Tennessee or the General Corporation Law of the State of Delaware,
I have assumed, without independent verification of the accuracy or correctness
of such assumption, that the laws of such other state which apply to the matter
in question are the same as the substantive law of the State of Tennessee (but
without regard to choice of law or conflicts of law principles) which would
apply were such matter governed by the laws of the State of Tennessee.

 

This opinion may be relied upon by the Administrative Agent, the Lenders, and
their respective permitted participants, assignees, and other transferees. It is
understood that this opinion speaks as of the date given, notwithstanding any
delivery as contemplated above on any other date.

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

Christine P. Richards

 

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Exhibit E

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Credit Agreement, dated as of February 11, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among FedEx Corporation (the “Borrower”), the Lenders party thereto
and JPMORGAN CHASE BANK, as administrative agent for the Lenders (in such
capacity, the “Administrative Agent”), CITICORP USA, INC. and BANK OF AMERICA,
N.A., as Co-Syndication Agents, and BANK ONE, NA, BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, COMMERZBANK A.G. and MERRILL LYNCH BANK USA, as Co-Documentation
Agents.  Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

 

The Assignor identified on Schedule l hereto (the “Assignor”) and the Assignee
identified on Schedule l hereto (the “Assignee”) agree as follows:

 

1.              The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date (as defined below), the interest described in Schedule 1
hereto (the “Assigned Interest”) in and to the Assignor’s rights and obligations
under the Credit Agreement with respect to those credit facilities contained in
the Credit Agreement as are set forth on Schedule 1 hereto (individually, an
“Assigned Facility”; collectively, the “Assigned Facilities”), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.

 

2.              The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim and (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Affiliates or any other obligor
or the performance or observance by the Borrower, any of its Affiliates or any
other obligor of any of their respective obligations under the Credit Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto.

 

3.              The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to Section 3.04 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the
Administrative Agent or any Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are

 

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delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to Section
2.15(d) of the Credit Agreement.

 

4.              The effective date of this Assignment and Acceptance shall be
the Effective Date of Assignment described in Schedule 1 hereto (the “Effective
Date”).  Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).

 

5.              Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date.

 

6.              From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.

 

7.              This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.

 

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Schedule 1
to Assignment and Acceptance with respect to
the Credit Agreement,
dated as of February 11, 2004
among the Borrower, the Lenders party thereto,
the Co-Documentation Agents, the Co-Syndication Agents
and JPMorgan Chase Bank, as Administrative Agent

 

Name of Assignor:

 

Name of Assignee:

 

Effective Date of Assignment:

 

Credit Facility Assigned

 

Principal
Amount Assigned

 

Commitment
Percentage Assigned

 

 

 

 

 

 

 

 

 

$

 

         .                             

%

 

 

 

 

 

 

 

 

[Name of Assignee]

 

[Name of Assignor]

 

 

 

 

 

 

By:

 

 

By:

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

Accepted for Recordation in the Register:

 

Required Consents (if any):

 

 

 

JPMORGAN CHASE BANK, as
Administrative Agent

 

[FEDEX CORPORATION, as Borrower]

 

 

 

By:

 

 

By:

 

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

 

 

 

JPMORGAN CHASE BANK, as
Administrative Agent

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

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Exhibit F

 

FORM OF EXEMPTION CERTIFICATE

 

Reference is made to the Credit Agreement, dated as of February 11, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among FedEx Corporation (the “Borrower”), the Lenders party
thereto, the Co-Documentation Agents and Co-Syndication Agents named therein and
JPMorgan Chase Bank, as administrative agent (in such capacity, the
“Administrative Agent”).  Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.                                       (the “Non-U.S. Lender”)
is providing this certificate pursuant to Section 2.15(d) of the Credit
Agreement.  The Non-U.S. Lender hereby represents and warrants that:

 

1.  The Non-U.S. Lender is the sole record and beneficial owner of the Loans in
respect of which it is providing this certificate.

 

2.  The Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”).  In this regard, the
Non-U.S. Lender further represents and warrants that:

 

(a) the Non-U.S. Lender is not subject to regulatory or other legal requirements
as a bank in any jurisdiction; and

 

(b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental Authority,
any application made to a rating agency or qualification for any exemption from
tax, securities law or other legal requirements.

 

3.  The Non-U.S. Lender is not a 10-percent shareholder of the Borrower within
the meaning of Section 881(c)(3)(B) of the Code.

 

4.  The Non-U.S. Lender is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 881(c)(3)(C) of the
Code.

 

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

 

 

[NAME OF NON-U.S. LENDER]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

Date:

 

 

 

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