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


 




 




















 


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

















 


	
   

  	
  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

  	
   

  



 


ii

















 


	
   

  	
  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

  	
   

  



 


iii

















 


 


	
   

  	
   

  	
   

  	
   

  
	
  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

















 


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.


 

















 


“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 1⁄2 of 1%.  Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.


 


“Applicable 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

















 


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 


 


3

















 


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

















 


“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

















 


(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

















 


“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.


 


7

















 


“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.


 


8

















 


“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


 


9

















 


(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.


 


10

















 


“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).


 


11

















 


“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.


 


12

















 


“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.


 


13

















 


“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.


 


14

















 


“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”, 


 


15

















 


“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 


 


16

















 


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,


 


17

















 


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 


 


18

















 


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 


 


19

















 


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.


 


20

















 


(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.


 


21

















 


(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.


 


22

















 


(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.


 


23

















 


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 


 


24

















 


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 


 


25

















 


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.


 


26

















 


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 


 


27

















 


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 


 


28

















 


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 


 


29

















 


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 


 


30

















 


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 


 


31

















 


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 


 


32

















 


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 


 


33

















 


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.


 


34

















 


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;


 


35

















 


(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 


 


36

















 


(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:


 


37

















 


(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 


 


38

















 


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 


 


39

















 


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;


 


40

















 


(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;


 


41

















 


(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.


 


42

















 


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 


 


43

















 


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 


 


44

















 


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.


 


45

















 


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 


 


46

















 


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.


 


47

















 


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.


 


48

















 


(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 


 


49

















 


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

















 


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

















 


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

















 


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

















 


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

















 


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

















 


 


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

















 


	
  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

















 


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:

  
	
   

  	
   

  



 

















 


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


 


2

















 


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.


 


3

















 


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

  



 


4

















 


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


 

















 


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.


 


2

















 


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:

  



 

















 


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: