EXHIBIT 4.26
Confidential commercial and financial information has been omitted from the
exhibit and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
Exhibit 4.26
EXECUTION COPY
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FEDERAL EXPRESS CORPORATION
_____________________________
FACILITY AGREEMENT
Dated as of April 1, 1996
______________________________
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is attached
but is inserted for convenience of reference only.
Page
----
Section 1. Definitions............................. 1
Section 2. Commitments and Loans................... 5
2.01 Loans and Loan Certificates............. 5
2.02 Borrowings.............................. 5
2.03 Changes of Maximum Commitments.......... 6
2.04 Fees.................................... 6
2.05 Lending Offices......................... 7
2.06 Several Obligations..................... 7
2.07 Pro Rata Treatment...................... 7
2.08 Certain Notices......................... 8
2.09 Maximum Amounts......................... 8
Section 3. Conditions Precedent.................... 8
Section 4. Representations and Warranties.......... 9
4.01 Corporate Existence..................... 9
4.02 Authorization........................... 9
4.03 Enforceability.......................... 9
4.04 No Conflicts............................ 9
Section 5. The Agent............................... 9
5.01 Appointment, Powers and Immunities...... 9
5.02 Reliance by Agent....................... 10
5.03 Defaults, Etc........................... 11
5.04 Rights as a Bank........................ 11
5.05 Indemnification......................... 11
5.06 Non-Reliance on Agent and Other Banks... 12
5.07 Failure to Act.......................... 12
5.08 Resignation or Removal of Agent......... 12
Section 6. Funding Agreement and Indemnity......... 13
Section 7. Miscellaneous........................... 16
7.01 Waiver.................................. 16
7.02 Notices................................. 16
7.03 Expenses, Etc........................... 16
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7.04 Amendments, Etc......................... 17
7.05 Successors and Assigns.................. 17
7.06 Assignments and Participations.......... 18
7.07 Captions................................ 19
7.08 Counterparts............................ 19
7.09 Governing Law........................... 19
7.10 Severability............................ 19
Schedule 2.08 - Form of Notice of Borrowing
Exhibit A - Term Sheet
Exhibit B - Form of Trustee's Letter
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FACILITY AGREEMENT dated as of April 1, 1996 (as amended or
supplemented from time to time, this "Agreement"), among FEDERAL EXPRESS
CORPORATION, a corporation duly organized and validly existing under the laws of
the State of Delaware (the "Company"); each of the financial institutions that
is a signatory hereto identified under the caption "BANKS" on the signature
pages hereto or which, pursuant to Section 7.06(b) hereof, shall become a "Bank"
hereunder (individually, a "Bank" and, collectively, the "Banks"); and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as agent for the Banks (in such capacity,
together with its successors in such capacity, the "Agent").
The Company has requested the Banks to provide a facility under which
the Banks will make loans in an aggregate principal amount not exceeding
$[ * ], of which the aggregate principal amount outstanding at any one time
shall not exceed $[ * ] (as such amounts may be reduced from time to time
pursuant to Section 2.03 hereof), to the respective owner trustees designated by
the Company under leveraged lease transactions to finance a portion of the
purchase price by such owner trustees of one or more of the six Aircraft (as
hereinafter defined), each to be concurrently leased by such relevant owner
trustee to the Company. Each such Aircraft shall at the time the respective
loans are made hereunder be a new addition to the Company's fleet.
To induce the Banks to make such loans, the Company, the Banks and the
Agent propose to enter into this Agreement pursuant to which the Banks will make
a revolving credit facility available and to execute and deliver certain other
Operative Agreements in connection therewith.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in
Exhibit A hereto or, when used in respect of a particular Aircraft or any Loans
made to finance a portion of the purchase price thereof or the transactions
otherwise related thereto, in Schedule II to the Indenture entered into in
connection with the making of such Loans. In addition, as used herein, the
following terms shall have the following meanings (all terms defined in this
Section 1 or in other provisions of this Agreement in the singular to have the
same meanings when used in the plural and vice versa):
"Aggregate Maximum Exposure" shall mean the sum of the Maximum
Commitment of each Bank (as such amounts may be reduced from time to time
pursuant to Section 2.03 hereof). Initially such sum is $[ * ].
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
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"Aircraft" shall mean, individually, each of the six aircraft referred
to in the Term Sheet, in each case as more fully described in the Indenture and
the Indenture Supplement relating to such aircraft, and, collectively, all of
such aircraft.
"Applicable Lending Office" shall mean, for each Bank and for each Type
of Loan, the "Lending Office" of such Bank (or of an affiliate of such Bank)
designated for such Type of Loan on the signature pages hereof or such other
office of such Bank (or of an affiliate of such Bank) as such Bank may from time
to time specify to the Agent and the Company as the office by which its Loans of
such Type are to be made and maintained.
"Base Rate Loans" shall mean Loans that bear interest at rates based
upon the Base Rate.
"Business Day" shall mean any day (a) on which commercial banks are not
authorized or required to close in New York City and (b) on which dealings in
Dollar deposits are carried out in the London interbank market.
"Closing Date" shall mean April 18, 1996, or such later date occurring
on or before April 30, 1996 as the parties may agree on which this Agreement is
executed and delivered by the parties hereto.
"Commitment" shall mean, with respect to each Aircraft and for each
Bank, the obligation of such Bank in connection with the Company's entering into
a Leveraged Lease Transaction with respect to such Aircraft to make a Loan to
the relevant Owner Trustee to finance the purchase of such Aircraft in an amount
up to but not exceeding the amount set opposite the name of such Bank on the
signature pages hereof under the caption "Commitment for each Aircraft";
provided, however, that no Bank shall be obligated to make any Loan that would
result in the sum of the aggregate principal amount of Loans made by such Bank
then outstanding exceeding such Bank's Maximum Commitment. The sum of the
aggregate principal amount of all Loans for all of the Banks that may be
outstanding at any one time is the Aggregate Maximum Exposure. The aggregate
principal amount of the Commitments with respect to each Aircraft for all of the
Banks is $[ * ].
"Commitment Termination Date" shall mean the first to occur of (i) April
17, 1997, and (ii) the termination of the Commitments of all of the Banks with
respect to all of the Aircraft pursuant hereto.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
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"Delivery Date" shall mean, for any Loan, the date on which an Aircraft
to be purchased with the proceeds of such Loan is delivered under the relevant
Participation Agreement.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Floating Rate Loans" shall mean Loans that bear interest at rates based
upon LIBOR or the Treasury Rate.
"Indenture" shall mean each Trust Indenture, Mortgage and Security
Agreement between the respective Owner Trustee and the Indenture Trustee entered
into in connection with the making of any Loans, and any amendment or supplement
thereto from time to time entered into.
"Indenture Event of Default" shall mean an Indenture Event of Default as
defined in any Indenture.
"Indenture Trustee" shall mean State Street Bank and Trust Company, a
Massachusetts trust company, or such other bank or trust company designated as
such by the Company and satisfactory to the Agent, as Indenture Trustee under an
Indenture, and its successors and permitted assigns as trustee thereunder.
"Interest Period" shall have the meaning assigned to such term in the
Term Sheet.
"Leveraged Lease Transaction" with respect to an Aircraft, shall mean a
transaction in which, among other things, the Owner Trustee with respect to such
Aircraft purchases such Aircraft utilizing funds provided by the relevant Owner
Participant and the proceeds of secured Loans from the Banks pursuant to the
facility under this Agreement and the Owner Trustee immediately thereupon leases
such Aircraft to the Company pursuant to a triple net lease (the "Lease" with
respect to such Aircraft) for a basic rental at least sufficient to service such
Loans.
"Loans" shall mean the loans provided for by Section 2.01 hereof.
"Majority Banks" shall mean, subject to the last paragraph of Section
7.04 hereof, Banks having at least 51% of the aggregate amount of the
Commitments or, if the Commitments shall have terminated, Banks holding at least
51% of the aggregate unpaid principal amount of the Loans.
"Maximum Commitment" shall mean, for any Bank, the amount set opposite
the name of such Bank on the signature pages hereof under the caption "Maximum
Commitment" (in each case as the same may be reduced from time to time pursuant
to Section 2.03 hereof).
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"Morgan" shall mean Morgan Guaranty Trust Company of New York.
"Operative Agreements" shall mean, collectively, with respect to each
Aircraft, the Participation Agreement, the Indenture and the Lease with respect
to such Aircraft and all other agreements entered into pursuant to the Leveraged
Lease Transaction contemplated thereby and designated therein as an Operative
Agreement.
"Owner Trustee" with respect to an Aircraft shall mean First Security
Bank of Utah, National Association, or such other bank or trust company
designated by the Company and satisfactory to the Agent, as the trustee of a
grantor trust created by the initial equity investor (together with its
successors and permitted assigns, the "Owner Participant" with respect to such
Aircraft) with respect to such Aircraft, in its capacity as such trustee, and
its successors and permitted assigns as such trustee.
"Participation Agreement" shall mean, with respect to any Aircraft, the
Participation Agreement among the Company, the relevant Owner Participant, the
relevant Owner Trustee, the Banks, the Agent and the Indenture Trustee entered
into in connection with the purchase of such Aircraft, as amended or
supplemented from time to time.
"Permitted Investments" shall include each of the following (provided it
shall mature within ninety (90) days of the date of purchase thereof by the
Trustee or the Agent, as the case may be):
(i) direct obligations of the United States of America; or
(ii) obligations fully guaranteed by the United States of America; or
(iii) certificates of deposit issued by, or bankers' acceptances of, or time
deposits or a deposit account with, any bank, trust company or national
banking association incorporated or doing business under the laws of the
United States of America or one of its States, having a combined capital and
surplus of at least $500,000,000 and having a rating of "A" or better from
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings Group
("S&P"); or
(iv) commercial paper rated A-1/P-1 by S&P or Moody's, respectively (or if
neither such organization shall rate such commercial paper at any time, a
rating by any nationally recognized statistical rating organization in the
United States of America equal to the highest rating assigned by such rating
organization).
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
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"Term Sheet" shall mean the summary of terms and conditions entitled
"Federal Express Corporation, Interim Debt Financing For Aircraft Leveraged
Leases, Summary of Financial Terms and Conditions," attached hereto as Exhibit
A.
"Trustee" at any time shall mean the entity acting as Owner Trustee at
such time in its capacity as trustee for the Banks hereunder as evidenced by its
execution of a letter to the Agent in the form set forth as Exhibit B hereto.
"Type" shall mean a Floating Rate Loan or a Base Rate Loan.
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Section 2. Commitments and Loans.
2.01 Loans and Loan Certificates. Each Bank severally agrees, on the
terms and conditions of this Agreement and the Term Sheet (which are
incorporated herein by this reference and made a part hereof) in connection with
the Company's entering into one or more Leveraged Lease Transactions, to make
Loans to the respective Owner Trustees in Dollars on or before the Commitment
Termination Date in an amount with respect to each Aircraft up to but not
exceeding the amount of the Commitment of such Bank for such Aircraft; provided,
however, that the sum of the aggregate amount of such Loans made by such Bank
outstanding at any one time shall not exceed such Bank's Maximum Commitment.
The respective Owner Trustee (or the Company on its behalf) may elect to borrow
either Floating Rate Loans or Base Rate Loans, provided that all Loans in
respect of the same Aircraft shall at all times be of the same Type. For each
Aircraft each Bank will make only one Loan hereunder. Each Loan to be made by a
Bank hereunder shall be made on the Delivery Date of the Aircraft to be
purchased with the proceeds of such Loan. The relevant Owner Trustee (or the
Company on its behalf) may convert Floating Rate Loans made in respect of the
same Aircraft into Base Rate Loans and vice versa in accordance with the terms
of the related Indenture. To the maximum extent practicable the Company will
cause all Loans for all Aircraft outstanding at the same time to be of the same
Type and the then current Interest Periods therefor to end on the same day.
2.02 Borrowings. The Company shall give or cause the relevant Owner
Trustee to give the Banks and the Agent a Notice of Borrowing with respect to
each borrowing hereunder as provided in Section 2.08 hereof. Not later than
10:00 a.m. New York time on the date specified for each borrowing hereunder,
each Bank shall make the amount of the Loan to be made by it on such date
available (a) if the Trustee has executed and delivered to the Agent a letter in
the form of Exhibit B hereto, to the Trustee, at the account specified in such
letter, or (b) otherwise to the Agent, at account number [ * ] (Reference Fed Ex
Air, For Credit to: Loan Department) maintained by the Agent with Morgan (ABA #
[ * ] in New York, NY, in either case in immediately available funds. The amount
so received by the Trustee or the Agent shall, subject to the fulfillment to the
Agent's satisfaction of the terms and conditions of this Agreement (including
the Term Sheet) and of the relevant Participation Agreement, be made available
to the relevant Owner Trustee in the manner specified in the relevant
Participation Agreement.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
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2.03 Changes of Maximum Commitments.
(a) The aggregate unused amount of the Maximum Commitments of all of
the Banks with respect to all of the Aircraft shall be automatically reduced to
zero upon (i) the Commitment Termination Date, (ii) the Delivery Date of the
sixth Aircraft (but after the making of any Loans hereunder in respect thereof
on such date), or (iii) the occurrence and continuance of any Indenture Event of
Default and, in the case of clause (iii) above, the giving by any Bank to the
Company of notice that such Bank is terminating its Commitments, but without
protest or other notice or other action of any kind on the part of the Banks or
the Agent or any of them, all of which are hereby waived.
(b) The Company shall have the right at any time or from time to time
to terminate or reduce the aggregate unused amount of the Maximum Commitments of
the Banks, provided that (i) the Company shall give notice of each such
termination or reduction as provided in Section 2.08 hereof and each such
termination or reduction shall be applied as provided in Section 2.07 hereof,
and (ii) each partial reduction shall be in an aggregate amount at least equal
to $[ * ] or in multiples of $[ * ] in excess thereof.
(c) The Maximum Commitments once terminated or reduced may not be
reinstated.
2.04 Fees.
(a) The Company shall pay, or cause the relevant Owner Trustee to pay,
to the Agent for the account of each Bank with respect to each Aircraft (other
than the sixth Aircraft) a commitment-related fee equal to $[ * ]. Such fees
with respect to each Aircraft shall be payable on the Delivery Date of such
Aircraft.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
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(b) Promptly following the earliest date on which the Loans with
respect to any of the first three Aircraft are refinanced or prepaid in full
(the "Adjustment Date") the Company and the Agent will, if after consideration
of the Delivery Dates and refinancing or prepayment date for the first three
Aircraft and the then anticipated Delivery Dates for the remaining Aircraft they
mutually believe that absent any adjustment to the amount of the commitment-
related fees for each of the fourth and fifth Aircraft under subsection (a) of
this Section 2.04 the fees payable to the Banks under subsection (c) of this
Section 2.04 will be different than the amount for an Aircraft under such
subsection (a), adjust the fees under such subsection (a) for the fourth and
fifth Aircraft by such amount as they then mutually believe necessary in order
that, as so adjusted, the fees for each of the remaining Aircraft under such
subsections (a) and (c) will be equal to one another.
(c) On the earlier of the Delivery Date of the sixth Aircraft and the
Commitment Termination Date (the "Final Fee Date") the Company shall pay, or
cause to be paid, to the Agent for the account of each Bank a fee equal to the
amount, if any, by which (i) a hypothetical commitment fee for such Bank
calculated on the daily amount of such Bank's Maximum Commitment for the period
from and including the Closing Date to but not including the Final Fee Date at a
rate per annum equal to 1/10 of 1% exceeds (ii) the aggregate fees theretofore
paid to such Bank under subsection (a) (as the same may have been adjusted
pursuant to subsection (b) above) of this Section 2.04.
(d) For purposes of this Section 2.04, computations shall be made on the
basis of a year of 360 days and actual days elapsed.
(e) In addition, the Company shall pay, or cause the respective Owner
Trustee to pay, to the Agent for the Agent such additional fees as specified in
a letter agreement between the Company and the Agent dated April 5, 1996, as the
same may be supplemented and amended from time to time.
2.05 Lending Offices. The Loans of each Type made by each Bank shall
be made and maintained at such Bank's Applicable Lending Office for Loans of
such Type except as such Bank may otherwise designate from time to time.
2.06 Several Obligations. The failure of any Bank to make any Loan to
be made by it on the date specified therefor shall not relieve any other Bank of
its obligation to make its Loan on such date, but neither any Bank nor the Agent
shall be responsible for the failure of any other Bank to make a Loan to be made
by such other Bank, and no Bank shall have any obligation to the Agent or any
other Bank for the failure by such Bank to make any Loan required to be made by
such Bank.
2.07 Pro Rata Treatment. Except to the extent otherwise provided
herein, each borrowing of Loans from the Banks under Section 2.01 hereof shall
be made from the Banks, each payment of fees under Section 2.04 hereof in
respect of Commitments or Loans, as the case may be, shall be made for the
account of
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the Banks, and each termination or reduction of the amount of the
Maximum Commitments under Section 2.03 hereof shall be applied to the respective
Maximum Commitments of the Banks, in each case pro rata according to the amounts
of their respective Maximum Commitments or Loans at the time outstanding.
2.08 Certain Notices. Notices by the Company to the Banks and the
Agent of terminations or reductions of the Maximum Commitments and of borrowings
shall be irrevocable and shall be effective only if received by the Banks and
the Agent not later than 10:00 a.m. New York time on the date that is the number
of days or Business Days prior to the date of the relevant termination,
reduction or borrowing specified below:
Number of Days or
Notice Business Days Prior
------ -------------------
Termination or reduction
of Commitments 10 days
Borrowing of Floating 3 Business Days
Rate Loans
Borrowing of Base 1 Business Day
Rate Loans
Each such notice of termination or reduction shall specify the amount of unused
Maximum Commitments to be terminated or reduced. Each such notice of borrowing
(a "Notice of Borrowing") shall be substantially in the form of Schedule 2.08
hereto (or may be in the form, if any, specified by the relevant Participation
Agreement) and shall specify the Owner Trustee and the Aircraft with respect to
which the relevant Loans are to be made, whether such Loans shall be Floating
Rate Loans or Base Rate Loans, the Interest Period therefor (if Floating Rate
Loans), the aggregate amount (subject to Section 2.09 hereof) of the Loans to be
made and the date of borrowing (which shall be a Business Day and the Delivery
Date for such Aircraft).
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2.09 Maximum Amounts. Anything in this Agreement to the contrary
notwithstanding, in no event shall (a) the aggregate principal amount of the
Loans to be made hereunder with respect to any Aircraft exceed the least of
[ * ].
Section 3. Conditions Precedent. The obligation of any Bank to make
its Commitment with respect to an Aircraft available hereunder is subject (a) to
receipt by such Bank of due notice with respect to such borrowing pursuant to
Section 2.02 hereof, (b) to the payment by the Company of such fees and other
costs and expenses then or theretofore due as the Company shall have agreed to
pay hereunder or pursuant to the Term Sheet including, without limitation, any
fees and other costs and expenses payable pursuant to Section 2.04 or Section
7.03 hereof, and (c) to the fulfillment to the satisfaction of the Agent of the
other conditions specified in the Term Sheet and the relevant Participation
Agreement.
Section 4. Representations and Warranties. The Company represents and
warrants to the Agent and the Banks that:
4.01 Corporate Existence. The Company (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware with its principal place of business and chief executive office in
Memphis, Tennessee, and (b) has full power, authority and legal right to conduct
its current business and operations as currently conducted and to own or hold
under lease its properties and to enter into and perform its obligations under
this Agreement.
4.02 Authorization. The execution, delivery and performance by the
Company of this Agreement have been duly authorized by all necessary corporate
action of the Company.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
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4.03 Enforceability. This Agreement has been duly and validly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms except as such enforcement may be limited by applicable bankruptcy,
insolvency or other similar laws affecting creditor's rights generally.
4.04 No Conflicts. Neither the execution, delivery or performance by
the Company of this Agreement nor compliance with the terms and provisions
hereof conflicts or will conflict with or results or will result in a breach or
violation of any of the terms, conditions or provisions of, or will require any
consent or approval under, any law, governmental rule or regulation or the
charter documents, as amended, or bylaws, as amended, of the Company or any
order, writ, injunction or decree of any court or governmental authority against
the Company or by which it or any of its properties or other assets is bound or
any indenture, mortgage or contract or other agreement or instrument to which
the Company is a party or by which it or any of its properties or other assets
is bound, or constitutes or will constitute a default thereunder or results or
will result in the imposition of any Lien upon any of its Properties.
Section 5. The Agent.
5.01 Appointment, Powers and Immunities. Each Bank hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder and under the
other Operative Agreements with respect to each Aircraft with such powers as are
specifically delegated to the Agent by the terms of this Agreement and of the
other Operative Agreements, together with such other powers as are reasonably
incidental thereto. In addition, each Bank hereby agrees that, notwithstanding
any provision of this Agreement or any other Operative Agreement to the
contrary, the Agent, on behalf of such Bank, shall retain possession of any Loan
Certificate delivered to the Agent on behalf of such Bank pursuant to Article 2
of any Indenture unless and until such Bank shall direct the Agent in writing to
deliver such Loan Certificate to it or to such other Person as it may specify in
such direction, and that any references in this Agreement or in any other
Operative Agreement to the respective Owner Trustee's delivering any such Loan
Certificate to such Bank shall be satisfied by such Owner Trustee's delivering
such Loan Certificate to the Agent on behalf of such Bank. The Agent (which
term as used in this sentence and in Section 5.05 and the first sentence of
Section 5.06 hereof shall include reference to its affiliates and its own and
its affiliates' officers, directors, employees and agents): (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement
and in the other Operative Agreements, and shall not by reason of this Agreement
or any other be a trustee for any Bank (except as expressly provided in Section
6 hereof); (b) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this Agreement or in any
other Operative Agreement, or in any certificate or other document referred to
or provided for in, or received by any of them under, this Agreement or any
other Operative Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, any
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Loan Certificate or any other Operative Agreement or any other document referred
to or provided for herein or therein or for any failure by the Company or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Operative Agreement; and (d) shall not
be responsible for any action taken or omitted to be taken by it hereunder or
under any other Operative Agreement or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, except for its own gross negligence or willful misconduct. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith. The Agent may deem and treat the payee of any Loan Certificate as
the holder thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed with the Agent, together
with the consent of the Company to such assignment or transfer (to the extent
provided in Section 7.06 hereof).
5.02 Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement or any other Operative
Agreement, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Majority Banks or, if provided herein, in accordance with the
instructions given by all of the Banks as is required in such circumstance, and
such instructions of such Banks and any action taken or failure to act pursuant
thereto shall be binding on all of the Banks.
5.03 Defaults, Etc. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Indenture Event of Default unless the Agent has
received notice from a Bank or the Company specifying such Indenture Event of
Default and stating that such notice is a "Notice of Indenture Event of
Default". In the event that the Agent receives such a notice of the occurrence
of any Indenture Event of Default, the Agent shall give prompt notice thereof to
the Banks. The Agent shall (subject always to the provisions of the applicable
Indenture and to Section 5.07 hereof) take such action with respect to such
Indenture Event of Default as shall be directed by the Majority Banks, provided
that, unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Indenture Event of Default as it shall deem
advisable in the best interest of the Banks except to the extent that this
Agreement or the related Indenture expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of the Majority
Banks or all of the Banks.
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5.04 Rights as a Bank. With respect to its Commitments and the Loans
made by it, Morgan (and any successor acting as Agent) in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. Morgan (and any successor acting as Agent)
and its affiliates may (without having to account therefor to any Bank) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Company (and any of its
subsidiaries or affiliates) as if it were not acting as the Agent, and Morgan
and its affiliates may accept fees and other consideration from the Company for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
5.05 Indemnification. The Banks agree to indemnify the Agent (to the
extent not reimbursed under Section 7.03 hereof, but without limiting the
obligations of the Company under said Section 7.03) ratably in accordance with
their respective Commitments or Loans at the time outstanding, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including by any Bank)
arising out of or by reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Operative Agreement or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that the Company is obligated to pay under Section 7.03 hereof, but
excluding, unless any Indenture Event of Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
5.06 Non-Reliance on Agent and Other Banks. Each Bank agrees that it
has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement and the related Operative Agreements. The Agent shall not
be required to keep itself informed as to the performance or observance by the
Company of this Agreement or any of the other Operative Agreements or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Company. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Bank with any
-16-
credit or other information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries (or any of their Affiliates)
that may come into the possession of the Agent or any of its affiliates.
5.07 Failure to Act. Except for action expressly required of the Agent
hereunder and under the other Operative Agreements, the Agent shall in all cases
be fully justified in failing or refusing to act hereunder and thereunder unless
it shall receive further assurances to its satisfaction from the Banks of their
indemnification obligations under Section 5.05 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
5.08 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Banks, the Company and the Indenture
Trustee, and the Agent may be removed at any time with or without cause by the
Majority Banks. Upon any such resignation or removal, the Majority Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Majority Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Majority Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which successor Agent shall be a
bank that has an office in New York, New York. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 5
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
Section 6. Funding Agreement and Indemnity.
(a) If any Bank shall deliver any funds to the Trustee or the Agent
pursuant to Section 2.02 hereof, the Trustee or the Agent, as the case may be,
shall hold such funds in trust for the exclusive benefit of such Bank until the
Agent or such Bank authorizes the Trustee or the Agent, as the case may be, to
apply such funds in satisfaction of such Bank's obligation to make a Loan to the
Owner Trustee pursuant to the relevant Participation Agreement. If the Agent or
such Bank notifies the Trustee or the Agent, as the case may be, on or prior to
the scheduled Delivery Date for the relevant Aircraft that the Operative
Agreements will not be entered into and/or the conditions precedent set forth in
such Participation Agreement to the making of such Loan by such Bank are not
satisfied on such scheduled Delivery Date, the Trustee shall, on such scheduled
Delivery Date, cause such funds to be (a) held by the Trustee or the Agent, as
the case may be, in the account specified in clause (a) or (b), as the case may
be, of Section 2.02 hereof or paid into an account (either of such accounts,
which need not be segregated, being called herein the "Account") with the
Trustee or the Agent, as the case may be, the
-17-
funds so held or paid to be held by the Trustee or the Agent, as the case may
be, in trust for such Bank solely as trustee hereunder and (b) invested by the
Trustee or the Agent, as the case may be, pursuant to subsection (c) of this
Section 6.
(b) The Company shall pay interest to such Bank on the amounts in
respect of such Bank in the Account for the period from and including such
scheduled Delivery Date to but excluding the earlier of (i) the date such
Aircraft is actually delivered under the Operative Agreements or (ii) the date
such funds are returned to such Bank under subsection (e) of this Section 6.
Such interest shall accrue on the amounts in the Account at a rate per annum
equal to (i) LIBOR for the initial Interest Period (as defined in the Indenture
with respect to such Aircraft or, if not executed, in the last draft thereof
provided to such Bank prior to such scheduled Delivery Date) [ * ]%
(computed on the basis of actual days elapsed and a year of 360 days), as
determined by the Agent two Business Days prior to such scheduled Delivery Date
or (ii) if a Base Rate Loan was specified in the Notice of Borrowing with
respect to such amounts, at the Base Rate as in effect from time to time
(computed on the basis of actual days elapsed and a year of 365 or 366 days) as
determined by the Agent. Such interest shall be due and payable to the Lender
on the earlier of the last day of such initial Interest Period referred to above
(or, if accruing at the Base Rate, within 10 Business Days of the date specified
in clause (i) of the preceding sentence) and the date specified in clause (ii)
of the preceding sentence.
(c) The Trustee or the Agent, as the case may be, will invest and
reinvest the amounts in the Account at the sole discretion, for the account, and
at the risk of the Company, in any Permitted Investment or other investments
agreed upon by the parties hereto; provided that, in the absence of
instructions, the Trustee or the Agent, as the case may be, shall invest the
amount of any funds so paid or the proceeds thereof in overnight Permitted
Investments selected by it pending receipt of directions from the Company. Upon
the Company's written instructions following payment in full by the Company of
all amounts payable under subsection (b) or (e) of this Section 6, as the case
may be, earnings on any such investments shall be paid by the Trustee or the
Agent, as the case may be, to the Company in the manner specified in such
instructions.
(d) The Company shall reimburse the Account on demand of the Trustee,
the Agent or such Bank for any loss incurred by the Account as a result of the
investment of funds by the Trustee or the Agent, as the case may be, in
accordance with the terms hereof. Further, the Company shall indemnify the
Agent and the Trustee and hold it harmless from and against any loss, cost or
expense such Bank, the Agent or the Trustee may incur as a result of any
investment or transfer of funds referred to herein.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
-18-
(e) If for any reason (i) the Operative Agreements in respect of the
Aircraft shall not be entered into on or prior to the Commitment Termination
Date, (ii) the actual delivery date of the Aircraft under the Operative
Agreements shall not occur (whether by reason of a failure to meet a condition
precedent thereto set forth in the Participation Agreement or otherwise) on or
prior to the earlier of the Commitment Termination Date and the last day of the
initial Interest Period for the Loans for such Aircraft as specified in the
Notice of Borrowing with respect thereto or as contemplated by subsection (b) of
this Section 6 (or, if a Base Rate Loan was so specified, within 10 Business
Days after the scheduled Delivery Date), or (iii) the full amount of the Loans
for the Aircraft shall not be applied to the financing thereof, then the Company
hereby irrevocably agrees that (a) each Bank may cancel or terminate any
financial arrangements it may have made to fund the Loans for the Aircraft (or
the unutilized portion thereof), and each Bank may direct that funds paid by it
to the Trustee or the Agent pursuant to Section 2.02 hereof (or the unutilized
portion thereof) be returned to it, and (b) to the extent not theretofore
reimbursed under the Operative Agreements, the Company shall reimburse each Bank
on demand for Break Funding Costs (as defined in the relevant Indenture or, if
not executed, in the latest draft thereof delivered to such Bank prior to the
scheduled Delivery Date) on the amount of the returned funds calculated as of
the date of return as if prepaid on such date, and the Agent for any and all
out-of-pocket costs and expenses (including legal fees and expenses) relating to
the negotiation, execution and delivery of the Operative Agreements.
(f) The duties of the Trustee or the Agent, as the case may be, under
this Section 6 are limited to those specifically set forth in this Section 6.
Neither the Trustee nor the Agent shall incur any liability hereunder except for
its gross negligence or willful misconduct or its simple negligence relating to
the holding or disposing of funds hereunder. The Trustee or the Agent, as the
case may be, shall hold the funds as escrow agent for the Banks and shall give
such funds the degree of care it gives other similar property held in such a
capacity. Neither the Trustee nor the Agent shall have any responsibility to
determine the authenticity or validity of any written notice, instruction,
request or other document delivered to it and shall be protected in acting or
refraining from acting upon any written notice, instruction or request furnished
to it hereunder and believed by it to be genuine and purporting to have been
signed by the proper party or parties. Without limiting the generality of the
foregoing, neither the Trustee nor the Agent shall have any responsibility for
any loss allocable to the Account from any investment made by the Trustee or the
Agent, as the case may be, in accordance with subsection (e) of this Section 6.
Upon making payment of the whole of the Account or any portion thereof in any
manner provided in this Agreement, the Trustee and the Agent shall have no
further liability under this Section 6 for such paid amount so delivered. The
Company hereby agrees to pay the Trustee's fee for the services to be rendered
hereunder and to promptly pay or reimburse the Trustee or the Agent upon request
for all reasonable expenses, including reasonable attorneys' fees, incurred or
made by either of them in connection with carrying out its duties hereunder.
The Company hereby agrees to indemnify the Trustee and the Agent
-19-
for, and to hold the Trustee and the Agent harmless against, any loss, liability
or expense incurred without gross negligence or willful misconduct on the part
of the Trustee or the Agent arising out of or in connection with the Trustee's
or the Agent's carrying out its duties hereunder or without simple negligence on
the part of the Trustee or the Agent, as the case may be, relating to the
holding or disposing of funds hereunder. In the event that the Trustee or the
Agent is uncertain as to the application of any provision of this Section 6, or
such provision appears to be in conflict with any other applicable provisions
hereof, the Trustee or the Agent, as the case may be, may seek instructions from
the relevant Bank (or, in the case of the Trustee, the Agent) and shall not be
liable to the Company or any other Person to the extent that it acts in good
faith in accordance with the instructions of the relevant Bank (or, in the case
of the Trustee, the Agent). Neither the Trustee nor the Agent shall be obligated
to take any action under this Section 6 which may, in its reasonable judgment,
involve it in any liability unless it shall have been furnished with indemnity
reasonably satisfactory to it in amount, form and substance.
Section 7. Miscellaneous.
7.01 Waiver. No failure on the part of the Agent or any Bank to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
7.02 Notices. Unless otherwise expressly specified or permitted by the
terms of this Agreement, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, return receipt requested or delivered by hand
or by FedEx service or other delivery service of established reputation or by
confirmed telex or facsimile to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof; or, as to any
party, at such other address as shall be designated by such party in a notice to
each other party. Any notice given pursuant to this Section 7.02 shall be
deemed given, and such requirement shall be deemed satisfied, when such notice
is received, if such notice is mailed by certified mail, postage prepaid or is
delivered by hand or FedEx service or other delivery service of established
reputation, or is sent by confirmed telex, telecopy or facsimile (if, in the
case of a facsimile, transmitted on a Business Day and during normal business
hours of the recipient, and otherwise on the next Business Day following
transmission), in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
7.03 Expenses, Etc The Company agrees to pay or reimburse the Agent
for paying all reasonable out-of-pocket costs and expenses of the Agent
-20-
(including, without limitation, the reasonable fees and expenses of Milbank,
Tweed, Hadley & McCloy, special New York counsel for the Banks), in connection
with (i) the negotiation, preparation, execution and delivery of this Agreement
and (ii) any modification, supplement or waiver of any of the terms of this
Agreement.
7.04 Amendments, Etc. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be amended, modified or
supplemented only by an instrument in writing signed by the Company, the Agent
and the Majority Banks, or by the Company and the Agent acting with the consent
of the Majority Banks, and any provision of this Agreement may be waived by the
Majority Banks or by the Agent acting with the consent of the Majority Banks;
provided that: (a) no amendment, modification, supplement or waiver shall,
unless by an instrument signed by all of the Banks affected or by the Agent
acting with the consent of all of the Banks affected: (i) increase, or extend
the term of any of the Commitments or Maximum Commitments, or extend the time or
waive any requirement for the reduction or termination of any of the Commitments
or Maximum Commitments, (ii) reduce the margin over LIBOR or the Treasury Rate
in determining the interest rate for any Loan, (iii) modify the definition of
the term "Majority Banks", or modify in any other manner the number or
percentage of the Banks required to make any determinations or waive any rights
hereunder or to modify any provision hereof, (iv) waive any of the conditions
precedent set forth in Section 3 hereof or (v) reduce the rate specified in
Section 2.04(c)(i) utilized to compute the fee due on the Final Fee Date; and
(b) any modification or supplement of Section 5 or 6 hereof shall require the
consent of the Agent.
Anything in this Agreement to the contrary notwithstanding, if at a time
when the conditions precedent set forth in Section 3 hereof to the making of
Commitments hereunder are, in the opinion of the Majority Banks, satisfied, any
Bank shall fail to fulfill its obligations to make such Commitments then, for so
long as such failure shall continue, such Bank shall (unless the Majority Banks,
as the case may be, determined as if such Bank were not a "Bank" hereunder,
shall otherwise consent in writing) be deemed for all purposes relating to
amendments, modifications, waivers or consents under this Agreement or any of
the other Operative Agreements (including, without limitation, under this
Section 7.04) to have no Loans, shall not be treated as a "Bank" hereunder when
performing the computation of Majority Banks and shall have no rights under the
preceding paragraph of this Section 7.04; provided that any action taken by the
other Banks with respect to the matters referred to in clause (a) of the
preceding paragraph shall not be effective as against such Bank.
7.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
-21-
7.06 Assignments and Participations.
(a) The Company may not assign any of its rights or obligations
hereunder without the prior consent of all of the Banks and the Agent.
(b) Subject to satisfaction of the conditions to assignment or transfer
provided in the Operative Agreements with respect to such Aircraft, each Bank
may assign any of its Loans and the Loan Certificates and its Commitments, but
only with the consent of the Company, which consent shall not be unreasonably
withheld, and, in the case of any assignment of a Commitment, the consent of the
Agent; provided that (i) prior to December 26, 1996, no such assignment shall be
made by any Bank other than to an affiliate of such Bank or to another Bank,
(ii) no such consent by the Company or the Agent shall be required in the case
of any assignment to another Bank, (iii) no such consent of the Company shall be
required at any time that any Indenture Event of Default shall have occurred and
be continuing (but the transferor or the transferee shall give notice of such
transfer to the Company), (iv) each such assignment by a Bank of its Loans and
the Loan Certificates or Commitments shall be made in such manner so that the
same portion of its Loans and the Loan Certificates and Commitments is assigned
to the respective assignee, and (v) each such assignment by a Bank of its Loans
and the Loan Certificates and/or its Commitments shall, unless otherwise
consented to by the Agent, be in an aggregate principal amount at least equal to
$[ * ]. Upon execution and delivery by the assignee to the Company and the
Agent of an instrument in writing pursuant to which such assignee agrees to
become a "Bank" hereunder (if not already a Bank) having the Commitment(s) and
Loans specified in such instrument, and upon consent thereto by the Company and
the Agent, to the extent required above, the assignee shall have, to the extent
of such assignment (unless otherwise provided in such assignment with the
consent of the Company and the Agent), the obligations, rights and benefits of a
Bank hereunder holding the Commitment(s) and Loans (or portions thereof)
assigned to it (in addition to the Commitment(s) and Loans theretofore held by
such assignee) and the assigning Bank shall, to the extent of such assignment,
be released from the Commitment(s) (or portion(s) thereof) so assigned.
(c) A Bank may sell or agree to sell to one or more other Persons a
participation in all or any part of any Loans and the Loan Certificates
evidencing the same held by it, or in its Commitments, provided that each
purchaser of a participation (a "Participant") shall not have any rights or
benefits under this Agreement or any Loan Certificate or any other Operative
Agreement (the Participant's rights against such Bank in respect of such
participation to be those set forth in the agreements executed by such Bank in
favor of the Participant).
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
-22-
(d) In addition to the assignments and participations permitted under
the foregoing provisions of this Section 7.06, any Bank may assign and pledge
all or any portion of its Loans and its Loan Certificates evidencing the same to
any Federal Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such assignment
shall release the assigning Bank from its obligations hereunder.
(e) Anything in this Section 7.06 to the contrary notwithstanding, no
Bank may assign or participate any interest in any Loan and Loan Certificates
evidencing the same held by it hereunder to the Company or any of its Affiliates
or Subsidiaries without the prior written consent of each other Bank.
7.07 Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
7.08 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
7.09 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
7.10 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 of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
-23-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
FEDERAL EXPRESS CORPORATION
By /s/ ROBERT D. HENNING
----------------------
Name: Robert D. Henning
Title: Asst. Treasurer/Managing Dir.
Structured Finance
Address for Notices:
2007 Corporate Avenue
Memphis, TN 38132
Attention: Vice President and
Treasurer
Telecopier: 901-395-4758
Telex: 534684
(Answerback: FEDEX INT MFS)
with a copy to:
1980 Nonconnah Drive
Memphis, TN 38132
Attention: Senior Vice President
and General Counsel
-24-
Commitment for each MORGAN GUARANTY TRUST COMPANY
Aircraft: OF NEW YORK
$[ * ]*
Maximum Commitment: By /s/ STEPHEN B. KING
--------------------
Name: Stephen B. King
$[ * ] Title: Vice President
Lending Office for all Loans:
60 Wall Street, 22nd Floor
New York, NY 10260
Address for Notices:
60 Wall Street, 22nd Floor
New York, NY 10260
Attention: Stephen B. King,
Vice President
Telephone No.: (212) 648-7415
Telecopier No.: (212) 648-5336
(with a copy to:
J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713
Attention: Andrew Lipsett
Telephone No.: (302) 634-8177
Telecopier No.: (302) 634-1091)
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
____________________
* In the event that the Owner Participant for any Leveraged Lease
Transaction may be an Affiliate of a Bank and as a result the Commitment
of such Bank for the related Aircraft must be reduced, the documentation
will be modified to provide for Morgan to cover such reduction (up to
$14,025,000 on only one such occasion) and for appropriate related
adjustments including, without limitation, as to allocating to Morgan an
appropriate portion of the fee otherwise payable to such Bank with
respect to such Aircraft under Section 2.04.
-25-
Commitment for each BANK OF AMERICA NATIONAL TRUST
Aircraft: AND SAVINGS ASSOCIATION
$[ * ]
*Maximum Commitment: By /s/ TIMOTHY C. HINTZ
--------------------
Name: Timothy C. Hintz
$[ * ] Title: Managing Director
Lending Office for all Loans:
Bank of America National Trust
and Savings Association
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, CA 94520
Address for Notices:
Bank of America National Trust
and Savings Association
GPO Account Admin. #5693
1850 Gateway Blvd.
Concord, CA 94520
Attention: Ms. Marianne Runyan
Telex No.: 67652
(Answerback: BANKAMERSFO)
Telephone No.: (510) 675-7719
Telecopier No.: (510) 675-7531
_______________________
*This commitment supersedes the commitment of $43,400,000 contained
in Bank of America's letter to J.P. Morgan Securities, Inc. dated April 11,
1996, which commitment is no longer effective.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
-26-
Commitment for each THE CHASE MANHATTAN BANK
Aircraft: (NATIONAL ASSOCIATION)
$[ * ]
Maximum Commitment: By /s/ MATTHEW H. MASS
----------------------
Name: Matthew H. Massie
$[ * ] Title: Vice President
Lending Office for all Loans:
1 Chase Manhattan Plaza
New York, NY 10081
Address for Notices:
1 Chase Manhattan Plaza, 3rd Floor
New York, NY 10081
Attention: Matthew H. Massie
Telephone No.: (212) 552-3005
Telecopier No.: (212) 552-5879
(with a copy to:
2 Chase Manhattan Plaza, 5th floor
New York, NY 10081
Attention: Carlos Morales
Telephone No: 212-552-4517
Telecopy No: 213-552-4455)
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
-27-
Commitment for each COMMERZBANK AG, ATLANTA AGENCY
Aircraft:
$[ * ]
Maximum Commitment: By /s/ ANDREAS K. BREMER
-----------------------
Name: Andreas K. Bremer
$[ * ] Title: Senior Vice President & Manager
By /s/ HARRY P. YERGEY
---------------------
Name: Harry P. Yergey
Title: Vice President
Lending Office for all Loans:
Promenade 2
Suite 3500
1230 Peachtree Street
Atlanta, GA 30309
Address for Notices:
Promenade 2
Suite 3500
1230 Peachtree Street
Atlanta, GA 30309
Attention:
Telephone No.: (404) 888-6500
Telecopier No.: (404) 888-6539
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
Commitment for each NATIONSBANK, N.A. (SOUTH)
Aircraft:
$[ * ]
Maximum Commitment: By /s/ STEVE L. DALTON
---------------------
Name: Steve L. Dalton
$[ * ] Title: Vice President
Lending Office for all Loans:
One NationsBank Plaza, 5th Floor
Nashville, TN 37239-1697
Address for Notices:
One NationsBank Plaza, 5th Floor
Nashville, TN 37239-1697
Attention: Corporate Finance
Telephone No.: (615) 749-4228
Telecopier No.: (615) 749-4640
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
-29-
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Agent
By /s/ STEPHEN B. KING
---------------------
Name: Stephen B. King
Title: Vice President
Address for Notices to
Morgan as Agent:
60 Wall Street, 22nd Floor
New York, NY 10260
Attention: Stephen B. King,
Vice President
Telephone No.: (212) 648-7415
Telecopier No.: (212) 648-5336
(with a copy to:
J.P. Morgan Services Inc.
500 Stanton Christiana Road
Newark, DE 19713
Telephone No.: (302) 634-8177
Telecopier No.: (302) 634-1091)
Schedule 2.08
NOTICE OF BORROWING
_____________ __, 199_
Morgan Guaranty Trust Company
of New York
Attention:
Ladies and Gentlemen:
Reference is made to the Facility Agreement dated as of April 1, 1996 (the
"Facility Agreement") between Federal Express Corporation ("Federal"), Morgan
Guaranty Trust Company of New York, as Agent, and the Banks named therein.
Capitalized terms used herein, unless otherwise defined herein, are used herein
as used or defined in the Facility Agreement.
Pursuant to Sections 2.02 and 2.08 of the Facility Agreement, Federal hereby
gives you irrevocable notice of its request that the Banks make [Floating/Base]
Rate Loans to [First Security Bank of Utah, National Association], as Owner
Trustee, in the aggregate amount of $[___________] (the "Loan Amount") with
respect to the Aircraft bearing manufacturer's serial number [_______], on
_______ __, 199 , which date is a Business Day and the scheduled Delivery Date
for such Aircraft. [The initial Interest Period in respect of such Floating
Rate Loan shall be a [___-month/one-week] period, commencing on such Delivery
Date and ending __________ __, 199 .]* Federal hereby represents and
warrants to you and the Banks that the Loan Amount does not exceed the maximum
amount permitted with respect to such Aircraft pursuant to Section 2.09.
Please make the proceeds of the Loan available as provided in Section 2.02
of the Facility Agreement and Section __ of the Participation Agreement with
respect to the Aircraft.
Very truly yours,
FEDERAL EXPRESS CORPORATION
By_________________________
Name:
Title:
__________________________
* To be included in Notice of Borrowing for Floating Rate Loan only.
Exhibit A to the
Facility Agreement
(Please see attached term sheet.)
JPMORGAN
FEDERAL EXPRESS CORPORATION
INTERIM DEBT FINANCING FOR AIRCRAFT LEVERAGED LEASES
SUMMARY OF FINANCIAL TERMS AND CONDITIONS
Aircraft: Four new A300s and two used MD11s. The
airframes together with the associated
engines are referred to herein,
individually or collectively as the
context may require as the "Aircraft."
Lessor(s): To be determined.
Lessee: Federal Express Corporation ("FedEx")
pursuant to a lease or leases
from the Lessor(s) (the "Leases").
Arranger: J. P. Morgan Securities Inc.
Administrative Agent: Morgan Guaranty Trust Company of
New York.
Lenders: A syndicate of banks acceptable to FedEx
and the Administrative Agent. To the
extent that any of the Lenders or their
affiliates is also a Lessor of an
Aircraft, the other Lenders will provide
(on a pro rata basis or such other basis
as the Lenders may agree) that portion
of the debt financing which the affected
Lender is unable to provide.
Facility Description: A revolving credit facility (the
"Facility") to provide the debt portion
of U.S. leveraged lease financings
involving the Aircraft. The Facility
will be available on or before April 19,
1996 (the "Effective Date"). Loans drawn
under the Facility (the "Loans") may be
borrowed, repaid and reborrowed within
364 days of the Effective Date.
Facility Amount: $[ * ], with the amount available for
any individual Aircraft to be limited to
the lesser of (a) $[ * ] or (b) [ * ]%
of the Lessor's purchase price, which
purchase price will not
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
April 5, 1996 1
exceed the fair market value determined
by an appraisal from a firm of
internationally recognized appraisers
mutually acceptable to FedEx and the
Administrative Agent (it being agreed
that BK Associates, Inc. is acceptable).
All appraisal costs shall be for the
account of FedEx.
Drawings under the Facility will reduce
the available Facility Amount, while
refinancings and principal repayments
will replenish availability under the
Facility.
Term and Amortization of Loans: The maximum term of the Loans shall be
24.5 years from the dates they are
incurred (the "Funding Dates"). The
Loans will amortize in accordance with
an amortization schedule provided by the
Lessor and acceptable to the
Administrative Agent and FedEx (the
average life of such Loans to be agreed
to by the parties, but in no event to
exceed 16 years). If rent is payable
semiannually, interest shall be rolled
up and capitalized at the end of each
Interest Period that ends on a date
other than a semiannual lease payment
date. Reoptimization of the Loans may be
effected by FedEx once, and by the
Lessor once following a change in tax
rate, following the closing date of the
leveraged lease so long as the average
life is not increased by more than six
months from the initial amortization
schedule, the principal amount of such
Loans is not increased, the amount of
principal to be paid on the last day of
the then current Interest Period is not
changed and the final maturity of such
Loans is not changed to a later date.
Interest Rate: The Interest rate on Loans under the
Facility shall be as follows:
(1) For the first twelve months
following their Funding Dates:
(a) LIBOR [ * ]% per annum,
or (b) the Base Rate.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
April 5, 1996 2
(2) For months thirteen through
eighteen following their Funding
Dates: (a) LIBOR [ * ]% per
annum, or (b) the Base Rate.
(3) Thereafter, the higher of (a)
LIBOR or (b) the Treasury Rate
plus, in either case, [ * ]% per
annum.
FedEx (or the Lessor) shall have the
option, exercisable at least three
business days prior to the commencement
of each Interest Period to select
interest rates based on LIBOR, if
applicable, for interest periods (the
"Interest Periods") of one week
(provided that such option may not be
selected more than three times per Loan)
or one, three or six months, provided
that no Interest Period shall commence
before and end after any principal
amortization date of such Loan under the
Facility. If FedEx or the Lessor has not
selected an interest rate based on LIBOR
(if applicable), the Base Rate option
will apply. There shall be only one
Interest Period per Loan at any one
time.
"LIBOR" means, for a given Interest
Period, an annual rate equal to the
London Interbank Offered Rate for the
corresponding deposits of U.S. Dollars
as displayed on Telerate Page 3750 or,
if unavailable on Telerate Page 3750,
the average of the rates quoted on
Reuters Page LIBO or, if neither service
displays any such quote, as quoted by
two reputable dealers selected by the
Administrative Agent, in either case two
business days' prior to the start of
each Interest Period. LIBOR will be
adjusted for Regulation D reserve
requirements.
"Treasury Rate" means, as of the first
day of any Interest Period, the weighted
average yield to maturity of, and
resulting from the bidding for, the most
recently auctioned United States
Treasury securities with maturities most
closely corresponding to (interpolating
between the maturities next succeeding
and next preceding)
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
April 5, 1996 3
the remaining maturity of the affected
Loans (such yield to be rounded, if
necessary to the nearest 1/100 of 1%
with any figure of 1/200 of 1% or above
rounded upward) as displayed on the
applicable Telerate Page or, is such
service no longer displays any such
quote, as quoted by two reputable
dealers in United States Treasury
securities selected by the
Administrative Agent, in either case at
approximately 11:00 a.m. New York time
on such day.
"Base Rate" means, for any day, the
higher of (i) the Federal funds rate (as
published by the Federal Reserve Bank of
New York) plus [ * ]% per annum or (ii)
the Administrative Agent's prime rate,
as announced from time to time at its
head office. Each change in any interest
rate provided for herein based upon the
Base Rate resulting from a change in the
Base Rate shall take effect at the time
of such change in the Base Rate.
All calculations of interest based on
LIBOR and all other amounts (other than
interest at the Treasury Rate or the
prime rate) shall be made on the basis
or a year of 360 days and actual days
elapsed. Interest based on the Treasury
Rate shall be calculated on the basis of
a year of twelve 30-day months. Interest
based on the prime rate shall be
calculated on the basis of a year of
365/366 days and actual days elapsed.
Commitment Fee: FedEx shall pay the Lenders the
equivalent of on the available
(unused) Facility Amount from the
Effective Date to the date the Facility
is terminated.
Commitment Termination: FedEx shall have the right to terminate
or reduce on a pro rata basis the
Facility Amount (in an aggregate amount,
in each case, of at least $[ * ] or in
multiples of $[ * ] in excess thereof)
upon not less than three business days'
notice to the Administrative Agent
(which notice shall be irrevocable and
shall be effective only upon receipt by
the Administrative Agent). Amounts which
are terminated or reduced may not be
reinstated.
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
April 5, 1996 4
Prepayment: The Loans shall be prepaid or paid (as
the case may be) in their entirety
(except in the case of an event which
applies to a specific Aircraft, in which
case only the relevant Loan will be
prepaid or paid), together with accrued
interest, Break Amount, fees, and all
other amounts payable under the relevant
Indenture, prior to stated maturity in
the following events:
(1) Upon an event of loss if the
affected Aircraft is not replaced
(provided that so long as FedEx is
not in default under the
transaction documents, such
prepayment may (at FedEx's option)
be postponed until the end of the
then current Interest Period in
respect of LIBOR-based Loans for
such Aircraft).
(2) If, at any time, the Lease
terminates with respect to an
Aircraft for any reason
whatsoever.
(3) At any time upon any sale of an
Aircraft.
(4) Upon acceleration subsequent to
an Event of Default.
(5) Upon the refinancing of the Loans
by FedEx.
Break Amount: Upon any payment, prepayment, conversion
or purchase of any principal of any Loan
on a day other than the last day of an
Interest Period with respect thereto, or
upon any failure to borrow, pay, prepay,
convert or purchase any principal of any
Loan on the scheduled date therefor
(whether by acceleration or otherwise),
FedEx or the Lessor shall pay to each
Lender such amount as shall be
determined by such Lender to be the
amount required to compensate such
Lender for any loss, cost or expense
which it may incur as a result of such
failure to borrow, payment, prepayment,
conversion or purchase or such failure
to pay, prepay, convert or purchase.
Security: All amounts payable on or in respect of
each Loan (including all indemnity
payments and all fees) must be at all
times secured by:
(1) a first lien of record on the
relevant Aircraft;
April 5, 1996 5
(2) an assignment of the Leases; and
(3) additional customary security,
including, without limitation, an
assignment of airframe and engine
manufacturers' warranties,
insurance and requisition proceeds.
Section 1110: All Loans shall be structured so as
to ensure that the Lenders shall be
entitled to the benefits of Section
1110 of the Bankruptcy Code, and
the Lenders shall receive an
opinion of counsel to FedEx at each
Loan closing to the effect that
such Loans will be entitled to such
benefits.
Indenture Trustee: An institution to be determined,
satisfactory to the Administrative
Agent.
Conditions Precedent: Conditions precedent to each Loan
(or, in the case of clause (3)
below, the initial Loan only) shall
include, without limitation:
(1) the execution of documentation
satisfactory in form and
substance to all parties that
will reflect the terms and
conditions contained herein;
(2) the obtaining of all necessary
governmental approvals and
comments relating to the
transaction documentation;
(3) no material adverse change in
the principal business or
financial condition of FedEx
taken as a whole in any case
from that pertaining on
February 29, 1996.
(4) obtaining satisfactory legal
(including as to Section 1110
of the Bankruptcy Code) and
FAA opinions; and
(5) no Event of Default or event
that with notice and/or lapse
of time or both would become
an Event of Default.
Events of Default: Events of Default under the
Facility shall include, without
limitation:
(1) failure to pay principal of,
Break Amount or interest on
the Loans or any fee payable
to the Lenders, the
April 5, 1996 6
Administrative Agent or the
Indenture Trustee within five
business days of the due date
therefor or failure to pay any
other amount payable to the
Lenders, the Administrative
Agent or the Indenture Trustee
within 30 days after demand
therefor;
(2) an Event of Default that
occurs under the Leases (a
"Lease Event of Default");
(3) breach of representation or
warranty that is material at
the time made and continues to
be material where such breach
remains unremedied for 30 days
after written notice;
(4) breach of covenant by FedEx or
the Lessor that remains
unremedied for 30 days after
written notice; provided that
in the event such breach is
curable and so long as (but
for no longer than 150 days
after such 30-day period)
FedEx shall have promptly
undertaken such cure, which
undertaking shall be
diligently and continuously
pursued using FedEx's best
efforts, such breach shall not
constitute an Event of
Default;
(5) failure to maintain the
Aircraft free of all liens
other than customarily
permitted liens;
(6) either FedEx or the Lessor
shall (i) file or consent to a
voluntary bankruptcy, (ii)
make an assignment for the
benefit of creditors or (iii)
consent to the appointment of
a custodian, receiver or
trustee; or
(7) involuntary bankruptcy filed
against FedEx or the Lessor
and not dismissed or stayed
within 60 days.
Quiet Enjoyment: The documentation will contain
provisions that so long as no Lease
Event of Default has occurred and is
continuing, no party shall take or cause
to be taken any action contrary to
FedEx's right to quiet enjoyment and the
continuing possession, use and operation
of the Aircraft.
April 5, 1996 7
Indemnities: Subject to customary exceptions
acceptable to FedEx and the
Administrative Agent, FedEx will hold
the Lenders, the Administrative Agent
and the Indenture Trustee harmless
against any loss, liability, claim or
expense incurred as a result of the
purchase, ownership, use, lease or
operation of the Aircraft or the failure
to FedEx to perform any of its
obligations under any of the operative
documents or relating to any claims
associated with the issuance or sale of
the equity interest in connection with
the proposed leveraged lease financing.
Increased Costs, etc.: In accordance with customary practice,
FedEx shall pay to each Lender such
additional amounts as shall be necessary
to compensate such Lender for any costs
of making or maintaining its Commitment
or Loans including without limitation as
a result of any tax imposed by any
taxing authority of or in Tennessee, or
as result of any change after the date
of the Facility in any (including any
new) law, rule or regulation or
interpretation thereof that changes the
basis of taxation of any amounts payable
to such Lender or imposes or modifies
reserve or similar requirements or
imposes other conditions affecting its
Commitment or Loans, or attributable to
maintenance of capital following any
changes referred to above or
implementing any risk-based or other
capital guidelines or requirements
(whether or not compliance therewith is
required by law), in any case to the
extent related to the transactions
contemplated hereby and without
duplication of any amounts already
included in the interest rate on the
Loans.
Use, Maintenance, and Insurance
of Aircraft: In accordance with customary practice in
FedEx aircraft financings.
Reregistration and Subleasing: FedEx may sublease and/or reregister the
Aircraft at any time in accordance with
customary practice in FedEx aircraft
financings.
Debt-Equity Issues: To be negotiated in good faith by the
parties.
Transfers and Participants: On or after December 26, 1996, the
Lenders will have the right to transfer,
assign, participate or otherwise dispose
of all or any part of their Loans or
their commitments under the Facility
April 5, 1996 8
subject, unless (i) an Event of Default
shall have occurred and be continuing or
(ii) the transfer is to another Lender,
or (iii) the transfer is by
participation, to FedEx's approval
(which shall not be unreasonably
withheld). Prior thereto, the Lenders
may transfer their Loans or Commitments
in whole or in part to an affiliate and
may discount any of their Loans with the
Federal Reserve.
Expenses: FedEx will pay all reasonable legal
expenses of Milbank, Tweed, Hadley and
McCloy, counsel to the Administrative
Agent, and other reasonable and
customary out-of-pocket expenses
incurred by the Administrative Agent and
related to this transaction and by the
Lenders related to any subsequent
amendments or waivers (including,
without limitation, the costs associated
with the filing of any Uniform
Commercial Code ("UCC") financing
statements, except for UCC financing
statements in Tennessee with respect to
a Lease, that the Administrative Agent
may deem reasonably advisable).
Documentations: Documentation will include but not be
limited to representations, covenants
and other provisions customary to
transactions of this type.
The transaction documents shall be in
form and substance satisfactory to FedEx
and the Administrative Agent and shall
be governed by New York law.
April 5, 1996 9
Exhibit B to the
Facility Agreement
[Letterhead of Entity acting as Owner Trustee]
[date]
Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street, 22nd Floor
New York, NY 10260
Dear Sirs:
We have reviewed the provisions of Sections 2.02 and 6 of the Facility
Agreement dated as of April 1, 1996 among Federal Express Corporation, each of
the financial institutions signatory thereto as Banks, and Morgan Guaranty Trust
Company of New York as agent for the Banks and agree to act as, and perform the
duties of, the Trustee as provided therein with the same effect as if we were a
party to the Facility Agreement.
The account referred to in Section 2.02(a) of the Facility Agreement is
account number [ * ] maintained by us at The First National Bank of Chicago, ABA
No. [ * ], Attention: Margaret Kennelly, Reference: Federal Express.
[NAME OF SUCH ENTITY]
By______________________________
Name:
Title:
____________________
*Blank space contained confidential information which has been filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.