EXHIBIT 10.44


 


SECOND
AMENDMENT TO CREDIT AGREEMENT


 


THIS SECOND AMENDMENT
TO CREDIT AGREEMENT (this “Amendment”) is entered into as of July 1, 2004, by
and between Expeditors International of Washington, Inc., a Washington
corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).


 


RECITALS


 


WHEREAS, Borrower is
currently indebted to Bank pursuant to the terms and conditions of that certain
Credit Agreement between Borrower and Bank dated as of July 1, 2002, as amended
from time to time (“Credit Agreement”).


 


WHEREAS, Bank and
Borrower have agreed to certain changes in the terms and conditions set forth
in the Credit Agreement and have agreed to amend the Credit Agreement to
reflect said changes.


 


NOW, THEREFORE, for
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be
amended as follows:


 


1.  Section 1.1.
(a) is hereby amended by deleting “July 1, 2004” as the last day on which Bank
will make advances under the Line of Credit, and by substituting for said date “July
1, 2005,” with such change to be effective upon the execution and delivery to
Bank of a promissory note substantially in the form of Exhibit A attached
hereto (which promissory note shall replace and be deemed the Line of Credit
Note defined in and made pursuant to the Credit Agreement) and all other
contracts, instruments and documents required by Bank to evidence such change.


 


2.  Except as
specifically provided herein, all terms and conditions of the Credit Agreement
remain in full force and effect, without waiver or modification.  All
terms defined in the Credit Agreement shall have the same meaning when used in
this Amendment.  This Amendment and the Credit Agreement shall be read together,
as one document.


 


3.  Borrower
hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein.  Borrower further
certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.


 


ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR ENFORCING REPAYMENT OF A
DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.


 


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IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be executed as of the day and
year first written above.


 


	
  Expeditors International of

  Washington, Inc.

  	
  WELLS FARGO BANK,

  NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  R. Jordan Gates

  	
   

  	
  By:

  	
  /s/
  Russell Carson

  	
   

  
	
   

  	
  Jordan Gates, Executive Vice

  President/CFO

  	
   

  	
  Russell Carson, Relationship Manager

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Charles Lynch

  	
   

  	
   

  
	
   

  	
  Charles Lynch, Vice President/

  Corporate Controller

  	
   

  



 


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REVOLVING
LINE OF CREDIT NOTE


 


	
  $50,000,000.00

  	
   

  	
  Seattle,
  Washington

  
	
   

  	
   

  	
  July
  1, 2004

  



 


FOR VALUE RECEIVED,
the undersigned Expeditors International of Washington, Inc. (“Borrower”)
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”)
at its office at Seattle RCBO, 999 Third Avenue 11th Floor, Seattle,
Washington 98104, or at such other place as the holder hereof may designate, in
lawful money of the United States of America and in immediately available
funds, the principal sum of Fifty Million Dollars ($50,000,000.00), or so much
thereof as may be advanced and be outstanding, with interest thereon, to be
computed on each advance from the date of its disbursement as set forth herein.


 


DEFINITIONS:


 


As used herein, the
following terms shall have the meanings set forth after each, and any other
term defined in this Note shall have the meaning set forth at the place
defined:


 


(a)           “Business Day” means any day except a
Saturday, Sunday or any other day on which commercial banks in Washington are
authorized or required by law to close.


 


(b)           “Fixed Rate Term” means a period
commencing on a Business Day and continuing for 1, 2, 3 or 6 months, as
designated by Borrower, during which all or a portion of the outstanding
principal balance of this Note bears interest determined in relation to LIBOR;
provided however, that no Fixed Rate Term may be selected for a principal
amount less than One Million Dollars ($1,000,000.00); and provided further,
that no Fixed Rate Term shall extend beyond the scheduled maturity date
hereof.  If any Fixed Rate Term would end on a day, which is not a
Business Day, then such Fixed Rate Term shall be extended to the next
succeeding Business Day.


 


(c)           “LIBOR” means the rate per annum
(rounded upward, if necessary, to the nearest whole 1/8 of 1%) and determined
pursuant to the following formula:


 


 


	
   

  	
  LIBOR=

  	
  Base
  LIBOR

  	
   

  
	
   

  	
  100% - LIBOR Reserve

  Percentage

  	
   

  



 


(i)            “Base LIBOR” means the rate per
annum for United States dollar deposits quoted by Bank as the Inter-Bank Market
Offered Rate, with the understanding that such rate is quoted by Bank for the
purpose of calculating effective rates of interest for loans making reference
thereto, on the first day of a Fixed Rate Term for delivery of funds on said
date for a period of time approximately equal to the number of days in such
Fixed Rate Term and in an amount approximately equal to the principal amount to
which such Fixed Rate Term applies.  Borrower understands and agrees that
Bank may base its quotation of the Inter-Bank Market Offered Rate upon such
offers or other market indicators of the Inter-Bank Market as Bank in its
discretion deems appropriate including, but not limited to, the rate offered
for U.S. dollar deposits on the London Inter-Bank Market.


 


(ii)           “LIBOR Reserve Percentage” means the
reserve percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for “Eurocurrency


 


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Liabilities” (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.


 


(d)           “Prime Rate” means at any time the
rate of interest most recently announced within Bank at its principal office as
its Prime Rate, with the understanding that the Prime Rate is one of Bank’s
base rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Bank may designate.


 


INTEREST:


 


(a)           Interest.  The
outstanding principal balance of this Note shall bear interest (computed on the
basis of a 360-day year, actual days elapsed) either (i) at a fluctuating rate
per annum equal to the Prime Rate in effect from time to time, or (ii) at a
fixed rate per annum determined by Bank to be three-quarters percent (.75%)
above LIBOR in effect on the first day of the applicable Fixed Rate Term. 
When interest is determined in relation to the Prime Rate, each change in the
rate of interest hereunder shall become effective on the date each Prime Rate change
is announced within Bank.  With respect to each LIBOR selection hereunder,
Bank is hereby authorized to note the date, principal amount, interest rate and
Fixed Rate Term applicable thereto and any payments made thereon on Bank’s
books and records (either manually or by electronic entry) and/or on any
schedule attached to this Note, which notations shall be prima facie evidence
of the accuracy of the information noted.


 


(b)           Selection of Interest Rate Options. 
At any time any portion of this Note bears interest determined in relation to
LIBOR, it may be continued by Borrower at the end of the Fixed Rate Term
applicable thereto so that all or a portion thereof bears interest determined
in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated
by Borrower.  At any time any portion of this Note bears interest
determined in relation to the Prime Rate, Borrower may convert all or a portion
thereof so that it bears interest determined in relation to LIBOR for a Fixed
Rate Term designated by Borrower.   At such time as Borrower requests
an advance hereunder or wishes to select a LIBOR option for all or a portion of
the outstanding principal balance hereof, and at the end of each Fixed Rate
Term, Borrower shall give Bank notice specifying: (i) the interest rate option
selected by Borrower; (ii) the principal amount subject thereto; and (iii) for
each LIBOR selection, the length of the applicable Fixed Rate Term.  Any
such notice may be given by telephone (or such other electronic method as Bank
may permit) so long as, with respect to each LIBOR selection, (A) if requested
by Bank, Borrower provides to Bank written confirmation thereof not later than
three (3) Business Days after such notice is given, and (B) such notice is
given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or
at a later time during any Business Day if Bank, at it’s sole option but
without obligation to do so, accepts Borrower’s notice and quotes a fixed rate
to Borrower.  If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate.  If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance
or the principal amount to which such Fixed Rate Term applied.


 


(c)           Taxes and Regulatory Costs. 
Borrower shall pay to Bank immediately upon demand, in addition to any other
amounts due or to become due hereunder, any and all (i) withholdings, interest
equalization taxes, stamp taxes or other taxes (except income and franchise
taxes) imposed by any domestic or foreign governmental authority and related in
any


 


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manner to LIBOR, and (ii) future, supplemental,
emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements
or costs imposed by any domestic or foreign governmental authority or resulting
from compliance by Bank with any request or directive (whether or not having
the force of law) from any central bank or other governmental authority and
related in any manner to LIBOR to the extent they are not included in the
calculation of LIBOR. In determining which of the foregoing are attributable to
any LIBOR option available to Borrower hereunder, any reasonable allocation
made by Bank among its operations shall be conclusive and binding upon
Borrower.


 


(d)           Payment of Interest. 
Interest accrued on this Note shall be payable on the first day of each month,
commencing August 1, 2004.


 


(e)           Default Interest.  From
and after the maturity date of this Note, or such earlier date as all principal
owing hereunder becomes due and payable by acceleration or otherwise, the
outstanding principal balance of this Note shall bear interest until paid in
full at an increased rate per annum (computed on the basis of a 360-day year,
actual days elapsed) equal to four percent (4%) above the rate of interest from
time to time applicable to this Note.


 


BORROWING AND REPAYMENT:


 


(a)           Borrowing and Repayment. 
Borrower may from time to time during the term of this Note borrow, partially
or wholly repay its outstanding borrowings, and reborrow, subject to all of the
limitations, terms and conditions of this Note and of any document executed in
connection with or governing this Note; provided however, that the total
outstanding borrowings under this Note shall not at any time exceed the
principal amount stated above. The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of principal payments made hereon by or for any Borrower, which
balance may be endorsed hereon from time to time by the holder. The outstanding
principal balance of this Note shall be due and payable in full on July 1,
2005.


 


(b)           Advances.  Advances hereunder,
to the total amount of the principal sum stated above, may be made by the
holder at the written request of Jordan Gates and Charles Lynch, acting
together, who are authorized to request advances and direct the disposition of
any advances to any deposit account of the Borrower until written notice of the
revocation of such authority is received by the holder at the office designated
above, which advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of Borrower regardless of the fact that
persons other than those authorized to request advances may have authority to
draw against such account.


 


(c)           Application of Payments. 
Each payment made on this Note shall be credited first, to any interest then
due and second, to the outstanding principal balance hereof. All payments
credited to principal shall be applied first, to the outstanding principal
balance of this Note which bears interest determined in relation to the Prime
Rate, if any, and second, to the outstanding principal balance of this Note
which bears interest determined in relation to LIBOR, with such payments
applied to the oldest Fixed Rate Term first.


 


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PREPAYMENT:


 


(a)           Prime Rate.  Borrower may
prepay principal on any portion of this Note which bears interest determined in
relation to the Prime Rate at any time, in any amount and without penalty.


 


(b)           LIBOR.  Borrower may
prepay principal on any portion of this Note which bears interest determined in
relation to LIBOR at any time and in the minimum amount of One Hundred Thousand
Dollars ($100,000.00); provided however, that if the outstanding principal
balance of such portion of this Note is less than said amount, the minimum
prepayment amount shall be the entire outstanding principal balance thereof. In
consideration of Bank providing this prepayment option to Borrower, or if any
such portion of this Note shall become due and payable at any time prior to the
last day of the Fixed Rate Term applicable thereto by acceleration or
otherwise, Borrower shall pay to Bank immediately upon demand a fee which is
the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated
as follows for each such month:


 


(i)            Determine
the amount of interest which would have accrued each month on the amount
prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the Fixed Rate Term applicable thereto.


 


(ii)           Subtract
from the amount determined in (i) above the amount of interest which would have
accrued for the same month on the amount prepaid for the remaining term of such
Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made
for such term and in a principal amount equal to the amount prepaid.


 


(iii)          If
the result obtained in (ii) for any month is greater than zero, discount that
difference by LIBOR used in (ii) above.


 


Each Borrower acknowledges that prepayment of
such amount may result in Bank incurring additional costs, expenses and/or
liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses and/or liabilities. Each Borrower, therefore, agrees to pay the
above-described prepayment fee and agrees that said amount represents a
reasonable estimate of the prepayment costs, expenses and/or liabilities of
Bank. If Borrower fails to pay any prepayment fee when due, the amount of such
prepayment fee shall thereafter bear interest until paid at a rate per annum
two percent (2.00%) above the Prime Rate in effect from time to time (computed
on the basis of a 360-day year, actual days elapsed). Each change in the rate
of interest on any such past due prepayment fee shall become effective on the
date each Prime Rate change is announced within Bank.


 


EVENTS OF DEFAULT:


 


This Note is made
pursuant to and is subject to the terms and conditions of that certain Credit
Agreement between Borrower and Bank dated as of July 1, 2002, as amended from
time to time (the “Credit Agreement”). Any default in the payment or
performance of any obligation under this Note, or any defined event of default
under the Credit Agreement, shall constitute an “Event of Default” under this
Note.


 


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MISCELLANEOUS:


 


(a)           Remedies.  Upon the
occurrence of any Event of Default, the holder of this Note, at the holder’s
option, may declare all sums of principal and interest outstanding hereunder to
be immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by each Borrower, and the obligation, if any, of the
holder to extend any further credit hereunder shall immediately cease and
terminate. Subject to the last sentence of this paragraph (which provides that
the prevailing party in an action to enforce this Note is entitled to recover
certain fees and costs in connection therewith), each Borrower shall pay to the
holder immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees), expended or incurred by the holder in connection with
the enforcement of the holder’s rights and/or the collection of any amounts
which become due to the holder under this Note, and the prosecution or defense
of any action in any way related to this Note, including without limitation,
any action for declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion
brought by Bank or any other person) relating to any Borrower or any other
person or entity. Notwithstanding anything herein to the contrary, the
prevailing party in any action to enforce this Note shall be entitled to
recover its reasonable outside attorneys’ fees and costs incurred in connection
with such action from the non-prevailing party in such action.


 


(b)           Governing Law.  This Note
shall be governed by and construed in accordance with the laws of the State of
Washington.


 


ORAL AGREEMENTS OR ORAL
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR ENFORCING REPAYMENT OF A
DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.


 


IN WITNESS WHEREOF,
the undersigned has executed this Note as of the date first written above.


 


 


	
  Expeditors International of Washington, Inc.

  
	
   

  
	
  By:

  	
  /s/
  R. Jordan Gates

  	
   

  
	
   

  	
  R. Jordan Gates, Executive Vice President/CFO

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Charles Lynch

  	
   

  
	
   

  	
  Charles Lynch, Vice President/Corporate
  Controller

  



 


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