EXHIBIT 1.1
FEDEX CORPORATION
(a Delaware corporation)
AND THE GUARANTORS NAMED HEREIN
$250,000,000 6 5/8% Notes due 2004
$250,000,000 6 7/8% Notes due 2006
$250,000,000 7 1/4% Notes due 2011
PURCHASE AGREEMENT
February 6, 2001
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Banc of America Securities LLC
Chase Securities Inc.
Commerzbank Capital Markets Corp.
Credit Suisse First Boston Corporation
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
FedEx Corporation, a Delaware corporation (the "Company"), and Federal
Express Corporation ("FedEx Express"), FedEx Ground Package System, Inc., FedEx
Custom Critical, Inc. and Viking Freight, Inc. (collectively, the "Initial
Guarantors" and, together with each subsidiary of the Company that pursuant to
the terms of the Indenture referred to below hereafter guarantees the Company's
obligations under such Indenture, the "Guarantors"), hereby confirm their
agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Banc of America Securities LLC, Chase Securities Inc., Commerzbank
Capital Markets Corp. and Credit Suisse First Boston Corporation (collectively,
the "Initial Purchasers") for whom Merrill Lynch is acting as representative (in
such capacity, the "Representative"), with respect to the issue and sale by the
Company and the purchase, severally and not jointly, by the Initial Purchasers
of the respective principal amounts set forth in Schedule A hereto, of
$250,000,000 aggregate principal amount of the Company's 6 5/8% Notes due 2004
(the "2004 Notes"), $250,000,000 aggregate principal amount of the Company's 6
7/8% Notes due 2006 (the "2006 Notes") and $250,000,000 aggregate principal
amount of the Company's 7 1/4% Notes due 2011
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(the "2011 Notes" and, together with the 2004 Notes and the 2006 Notes, the
"Offered Securities"). The Offered Securities are to be issued pursuant to an
indenture (the "Indenture"), to be dated as of February 12, 2001, among the
Company, as issuer, the Initial Guarantors, as guarantors, and The Bank of New
York, as trustee (the "Trustee"). The Offered Securities will be guaranteed as
to principal and interest pursuant to the Indenture by the Guarantors (each such
guarantee, a "Securities Guarantee").
The Company understands that the Initial Purchasers propose to make an
offering of the Offered Securities on the terms and in the manner set forth
herein and agrees that the Initial Purchasers may resell, subject to the
conditions set forth herein, all or a portion of the Offered Securities to
purchasers ("Subsequent Purchasers") at any time after the date of this
Agreement. The Offered Securities are to be offered and sold through the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "1933 Act"), in reliance upon exemptions therefrom. Pursuant to the terms
of the Offered Securities and the Indenture, investors that acquire Offered
Securities may only resell or otherwise transfer such Offered Securities if such
Offered Securities are hereafter registered under the 1933 Act or if an
exemption from the registration requirements of the 1933 Act is available
(including the exemptions afforded by Rule 144A ("Rule 144A") or Regulation S
("Regulation S") of the rules and regulations promulgated under the 1933 Act
(the "1933 Act Regulations") by the Securities and Exchange Commission (the
"Commission")).
The Company has prepared and delivered to each Initial Purchaser copies of
a preliminary offering memorandum dated February 2, 2001 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to each Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated February 6, 2001 (the "Final Offering Memorandum"),
each for use by such Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Offered Securities. "Offering Memorandum"
means, with respect to any date or time referred to in this Agreement, the most
recent offering memorandum (whether the Preliminary Offering Memorandum or the
Final Offering Memorandum, or any amendment or supplement to either such
document), including exhibits thereto and any documents incorporated therein by
reference, which has been prepared and delivered by the Company to the Initial
Purchasers in connection with their solicitation of purchases of, or offering
of, the Offered Securities.
All references in this Agreement to financial statements and schedules and
other information which are "contained," "included" or "stated" in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated by
reference in the Offering Memorandum.
The holders of Offered Securities will be entitled to the benefits of a
Registration Rights Agreement, in substantially the form attached hereto as
Exhibit C with such changes as shall be agreed to by the parties hereto (the
"Registration Rights Agreement"), pursuant to which the Company will file a
registration statement (the "Registration Statement") with the Commission
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registering the Offered Securities or the Exchange Notes referred to in the
Registration Rights Agreement under the 1933 Act.
Section 1. Representations and Warranties of the Company. (a) Each Initial
Guarantor, as to itself, and the Company, as to itself and its subsidiaries,
represents and warrants to each Initial Purchaser, as of the date hereof and as
of the Closing Time (as defined below), and agrees with each Initial Purchaser
as follows:
(i) Due Incorporation and Qualification. Each of the Company and the
Initial Guarantors (other than Viking Freight, Inc., but only as of the
date hereof and not as of the Closing Time) has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum, and is duly qualified to do business
and is in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company which is a
significant subsidiary as defined in Rule 405 of Regulation C of the 1933
Act Regulations (each, a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum and is duly qualified
as a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; and all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, except for directors' qualifying shares
(except as otherwise stated in the Offering Memorandum), is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iii) Offering Memorandum. The Offering Memorandum does not, and at
the Closing Time will not, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Offering Memorandum made in reliance upon and in conformity with
information furnished to the Company in writing by the Representative on
behalf of an Initial Purchaser expressly for use in the Offering
Memorandum.
(iv) Incorporated Documents. The documents incorporated by reference
in the Offering Memorandum, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act
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and the rules and regulations promulgated thereunder (the "1934 Act
Regulations"), and, when read together and with the other information in
the Offering Memorandum, did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were or are made, not misleading.
(v) Accountants. The accountants who certified the financial
statements included or incorporated by reference in the Offering Memorandum
are independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(vi) Financial Statements. The financial statements of the Company
included or incorporated by reference in the Offering Memorandum present
fairly the financial position of the Company as of the dates thereof and
the results of operations, changes in common stockholders' investment and
cash flows of the Company, for the respective periods covered thereby, all
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the entire period involved; and the financial
schedules included or incorporated by reference in the Offering Memorandum
meet the requirements of the 1933 Act Regulations or the 1934 Act
Regulations, as applicable.
(vii) Material Changes or Material Transactions. Except as stated in
the Offering Memorandum, subsequent to the respective dates as of which
information is given in the Offering Memorandum, neither the Company nor
any of its subsidiaries has incurred any liabilities or obligations, direct
or contingent, or entered into any transactions which are material to the
Company and its subsidiaries considered as one enterprise, and there has
not been any material adverse change in the capital stock or short-term
debt, or any material increase in long-term debt of the Company and its
subsidiaries considered as one enterprise, or any material adverse change,
or any development involving a prospective material adverse change, in the
condition (financial or other), business, prospects, net worth or results
of operations of the Company and its subsidiaries considered as one
enterprise.
(viii) No Defaults; Regulatory Approvals. None of the Company nor any
of its subsidiaries is in violation of its charter (or similar
organizational documents) or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or any of them or their
properties may be bound, except, in the case of the subsidiaries of the
Company which are not Initial Guarantors, for such violations or defaults
which individually or in the aggregate do not, or will not, have a material
adverse effect on the condition (financial or other), business, prospects
or results of operations of the Company and its subsidiaries considered as
one enterprise.
The execution and delivery of this Agreement, the Indenture, the
Registration Rights Agreement, the Securities Guarantees and the
consummation of the transactions contemplated herein and therein have been
duly authorized by all necessary corporate action and executed by the
Company and each Initial Guarantor and will not conflict with or constitute
a breach of, or default under, or result in the creation or imposition of
any
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lien, charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or any
such subsidiary is a party or by which it or any of them may be bound or to
which any of the property or assets of the Company or any such subsidiary
is subject, which conflict, breach or default would have, individually or
in the aggregate with any other such instances, a material adverse effect
on the condition (financial or other), business, prospects, net worth or
results of operations of the Company and its subsidiaries considered as one
enterprise or reasonably be expected to adversely affect the enforceability
of this Agreement, the Indenture, the Registration Rights Agreement or the
Securities Guarantees, nor will such action result in any violation of the
provisions of the charter or by-laws (or similar organizational documents)
of the Company or any Initial Guarantor or any law, administrative
regulation or administrative or court order or decree currently in effect
or in effect at the time of execution and delivery of this Agreement, the
Indenture, the Registration Rights Agreement or the Securities Guarantees
and applicable to the Company or any of its subsidiaries.
No consent, approval, authorization, order or decree of any court or
governmental agency or body is required for the consummation by the Company
and the Initial Guarantors of the transactions contemplated by this
Agreement, the Indenture, the Registration Rights Agreement or the
Securities Guarantees, except such as may be required under state
securities or Blue Sky laws.
(ix) Legal Proceedings; Contracts. Except for matters described in the
Offering Memorandum, there is no pending, or to the best knowledge of any
financial officer of the Company or any Initial Guarantor, threatened
action or proceeding before any court or administrative agency which
individually (or in the aggregate in the case of any group of related
lawsuits) is expected to have a material adverse effect on the financial
condition of the Company and its subsidiaries considered as one enterprise,
or the ability of the Company and the Initial Guarantors to perform their
respective obligations under this Agreement, the Indenture, the
Registration Rights Agreement or the Securities Guarantees.
(x) Compliance with Laws. The business and operations of the Company
and of each of the Initial Guarantors comply in all material respects with
all laws and regulations applicable thereto and, except as described in the
Offering Memorandum, there are no known, proposed or threatened changes in
any laws or regulations which would have a material adverse effect on the
Company and its subsidiaries considered as one enterprise, or the manner in
which it conducts its business. Each of the Company and the Initial
Guarantors possesses all valid and effective certificates, licenses and
permits required to conduct its business as now conducted, except for
instances which individually or in the aggregate do not, or will not, have
a material adverse effect on the condition (financial or other), business,
prospects or results of operations of the Company and its subsidiaries
considered as one enterprise.
(xi) Enforceability. Each of the Indenture and the Registration Rights
Agreement has been duly authorized by the Company and the Initial
Guarantors, will be
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substantially in the form heretofore supplied to you and, when duly
executed and delivered by the Company and the Initial Guarantors and the
other parties thereto, will constitute a valid and binding agreement of the
Company and the Initial Guarantors, enforceable against the Company and the
Initial Guarantors in accordance with its terms.
(xii) Validity of the Offered Securities and the Securities
Guarantees. When the Offered Securities have been executed, issued,
authenticated and delivered pursuant to the provisions of the Indenture and
sold and paid for as provided in this Agreement, and the Securities
Guarantees have been executed, issued and delivered pursuant to the
provisions of the Indenture, the Offered Securities and the Securities
Guarantees will constitute valid and legally binding obligations of the
Company and the respective Initial Guarantors enforceable in accordance
with their respective terms; and the holders of such Offered Securities and
Securities Guarantees will be entitled to the benefits provided by such
Indenture.
(xiii) Similar Offerings. Neither the Company nor any of its
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
(each, an "Affiliate"), has, directly or indirectly, solicited any offer to
buy, sold or offered to sell or otherwise negotiated in respect of, or will
solicit any offer to buy, sell or offer to sell or otherwise negotiate in
respect of, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Offered Securities in a manner that would require the Offered Securities to
be registered under the 1933 Act.
(xiv) Rule 144A Eligibility. The Offered Securities are eligible for
resale pursuant to Rule 144A and will not be, at the Closing Time, of the
same class as securities listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a U.S. automated
interdealer quotation system.
(xv) No General Solicitation. None of the Company, its Affiliates or
any person acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation) has engaged or
will engage, in connection with the offering of the Offered Securities, in
any form of general solicitation or general advertising within the meaning
of Rule 502(c) under the 1933 Act.
(xvi) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section 2
and the procedures set forth in Section 6 hereof, it is not necessary in
connection with the offer, sale and delivery of the Offered Securities to
the Initial Purchasers and to each Subsequent Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum to register the
Offered Securities under the 1933 Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended (the "1939 Act").
(xvii) No Directed Selling Efforts. With respect to those Offered
Securities sold in reliance on Regulation S, (A) none of the Company, its
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation) has
engaged or will engage in any directed selling efforts within the meaning
of Regulation S and (B) each of the Company and its Affiliates and any
person
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acting on its or their behalf (other than the Initial Purchasers, as to
whom the Company makes no representation) has complied and will comply with
the offering restrictions requirement of Regulation S.
The representations and warranties made by the Company and the Initial
Guarantors as to the enforceability of the Indenture, the Registration Rights
Agreement , the Offered Securities and the Securities Guarantees set forth in
subparagraphs (xi) and (xii) above are limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
the enforcement of creditors' rights or by general equity principles, and the
enforceability of the Indenture is also limited by applicable laws which may
affect the remedies provided therein but which do not affect the validity of
such Indenture or make such remedies inadequate for the practical realization of
the benefits intended to be provided thereby.
(b) Additional Certifications. Any certificate signed by any officer of the
Company or any Initial Guarantor and delivered to you or your counsel in
connection with an offering of the Offered Securities shall be deemed a
representation and warranty by the Company or such Initial Guarantor to each
Initial Purchaser participating in such offering as to the matters covered
thereby on the date of such certificate unless subsequently amended or
supplemented subsequent thereto.
Section 2. Purchase and Sale. (a) On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Initial Purchaser, and each Initial
Purchaser agrees, severally and not jointly, to purchase from the Company, at
the purchase price specified in Schedule B hereto, the amount of Offered
Securities set forth opposite the name of such Initial Purchaser in Schedule A
plus any additional principal amount of Offered Securities which such Initial
Purchaser may become obligated to purchase pursuant to the provisions of Section
11 hereof. It is understood that you propose to offer the Offered Securities for
sale as set forth in the Offering Memorandum.
(b) Payment of the purchase price for, and delivery of the certificates
for, the Offered Securities to be purchased by the Initial Purchasers shall be
made at the office of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York 10017, or at such other place as shall be agreed upon by the Representative
and the Company, at 9:00 A.M., Eastern time, on the third business day after the
date hereof (unless postponed in accordance with the provisions of Section 11),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representative and the Company (such time and date of payment
and delivery being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against book-entry
delivery through the facilities of The Depository Trust Company to the
Representative for the respective accounts of the Initial Purchasers of the
Offered Securities to be purchased by them. It is understood that each Initial
Purchaser has authorized the Representative, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Offered
Securities which it has agreed to purchase. Merrill Lynch, individually and not
as representative of the Initial Purchasers, may (but shall not be obligated to)
make payment of the purchase price for the Offered Securities to
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be purchased by any Initial Purchaser whose funds have not been received by the
Closing Time, but such payment shall not relieve such Initial Purchaser from its
obligations hereunder.
(c) Each Initial Purchaser, severally and not jointly, represents and
warrants to, and agrees with, the Company that it is a "qualified institutional
buyer" within the meaning of Rule 144A under the 1933 Act (a "Qualified
Institutional Buyer").
(d) Certificates for the Offered Securities shall be in such denominations
and registered in such names as the Initial Purchasers may request in writing at
least one full business day before the Closing Time.
Section 3. Covenants of the Company and the Initial Guarantors. The Company
and each of the Initial Guarantors covenants with each Initial Purchaser
participating in the offering as follows:
(a) Notice of Certain Proposed Filings. At any time when the Offering
Memorandum is required to be delivered pursuant to Section 6(a)(vi) hereof, the
Company will give you notice of its intention to prepare any amendment to the
Offering Memorandum, whether by the filing of documents pursuant to the 1934 Act
or otherwise, and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed or prepared a reasonable time
in advance of such proposed filing or preparation, as the case may be.
(b) Copies of the Offering Memorandum. The Company will deliver to you as
many copies of the Offering Memorandum and of each amendment thereto (including
documents incorporated by reference in the Offering Memorandum) as you may
reasonably request.
(c) Revisions of Offering Memorandum--Material Changes. If at any time when
the Offering Memorandum is required to be delivered pursuant to Section 6(a)(vi)
hereof any event shall occur or condition exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Company or the Initial
Purchasers, to further amend or supplement the Offering Memorandum in order that
the Offering Memorandum will not include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time it
is delivered to a Subsequent Purchaser, the Company will promptly prepare such
amendment or supplement, whether by filing documents pursuant to the 1934 Act or
otherwise, as may be necessary to correct such untrue statement or omission.
(d) Blue Sky Qualifications. The Company and the Initial Guarantors will
endeavor, in cooperation with you, to qualify the Offered Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Initial Purchasers may designate, and
will maintain such qualifications in effect for so long as may be required for
the distribution of the Offered Securities; provided, however, that neither the
Company nor the Initial Guarantors shall be obligated to file any general
consent to service of process or to qualify as a foreign corporation or to
subject itself to taxation as doing business in any jurisdiction in which it is
not otherwise required to be so qualified. The Company and the Initial
Guarantors will file such statements and reports as may be required by the laws
of each jurisdiction in which the Offered Securities have been qualified as
provided above.
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(e) 1934 Act Filings. The Company and FedEx Express, during the period when
the Offering Memorandum is required to be delivered pursuant to Section 6(a)(vi)
hereof, will file, within the required time periods, all documents required to
be filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the 1934 Act.
(f) Stand-Off Agreement. The Company will not, between the date of this
Agreement and the Closing Time, without your consent, offer or sell, or enter
into any agreement to sell, any debt securities of the Company (other than the
Offered Securities which are to be sold pursuant hereto and commercial paper in
the ordinary course of business).
Section 4. Payment of Expenses.
(a) The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(i) the preparation of the Offering Memorandum and all amendments
thereto and the Preliminary Offering Memorandum;
(ii) the preparation, issuance and delivery of the Offered Securities;
(iii) the reasonable fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and of any
registrar, paying agent and authenticating agent;
(iv) the qualification of the Offered Securities under securities laws
in accordance with the provisions of Section 3(d), including filing fees
and the reasonable fees and disbursements of counsel to the Initial
Purchasers in connection therewith and in connection with the preparation
of any Blue Sky Survey and any Legal Investment Survey;
(vi) the printing and delivery to the Initial Purchasers in quantities
as may be reasonably requested of copies of the Offering Memorandum and any
amendments or supplements thereto, and the delivery by the Initial
Purchasers of the Offering Memorandum and any amendments or supplements
thereto in connection with solicitations or confirmations of sales of the
Offered Securities;
(vii) the preparation and delivery to the Initial Purchasers of copies
of the Indenture; and
(viii) any fees charged by rating agencies for the rating of the
Offered Securities.
(b) If this Agreement is terminated by the Initial Purchasers in accordance
with the provisions of Section 5 or clause (i) of Section 10 hereof, the Company
shall reimburse upon demand the Initial Purchasers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers, that shall have been incurred by them in
connection with the proposed purchase and sale of the Offered Securities.
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Section 5. Conditions of Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Offered Securities
pursuant to this Agreement will be subject at all times to the accuracy of the
representations and warranties on the part of the Company and the Initial
Guarantors herein, to the accuracy of the statements of the officers of the
Company or of any of the Initial Guarantors made in any certificate furnished
pursuant to the provisions hereof, to the performance and observance by the
Company and the Initial Guarantors of their respective covenants and agreements
contained herein to be performed and observed on their respective parts and to
the following additional conditions precedent:
(a) Ratings Change; etc. At the Closing Time, (i) the rating assigned
as of the date of this Agreement by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule 436(g)
under the 1933 Act Regulations, to any debt securities of the Company
(including for purposes of this Section 5(a)(i) any rating indicated by the
Company as of the date of this Agreement as the rating orally confirmed to
the Company by any such rating organization as the rating to be assigned to
the Offered Securities) shall not have been lowered since the execution of
this Agreement nor shall any such rating organization have publicly
announced that it has placed any debt securities of the Company on what is
commonly termed a "watch list" for possible downgrading, and (ii) there
shall not have come to the attention of any of the Initial Purchasers any
facts that would cause them to believe that the Offering Memorandum, at the
time it was required to be delivered to a purchaser of the Offered
Securities pursuant to Section 6(a)(vi) hereof, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
existing at such time, not misleading.
(b) Legal Opinions. At the Closing Time, you shall have received the
following documents:
(i) Opinion of the Executive Vice President, General Counsel and
Secretary of the Company. The opinion of Kenneth R. Masterson,
Executive Vice President and General Counsel of the Company, dated as
of the Closing Time, in form and substance reasonably satisfactory to
the Initial Purchasers, to the effect as set forth in Exhibit A.
(ii) Opinion of Davis Polk & Wardwell. The opinion of Davis Polk
& Wardwell, counsel to the Company, dated as of the Closing Time, in
form and substance reasonably satisfactory to the Initial Purchasers,
to the effect as set forth in Exhibit B.
(iii) Opinion of Brown & Wood LLP. The opinion of Brown & Wood
LLP, counsel to the Initial Purchasers, dated as of the Closing Time,
with respect to such matters as the Initial Purchasers may reasonably
request.
(c) Officers' Certificate. At the Closing Time, there shall not have
been, since the respective dates as of which information is given in the
Offering Memorandum, any material adverse change in the condition
(financial or other), business, prospects or results of operations of the
Company and its subsidiaries considered as one enterprise;
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and you shall have received a certificate of the President or any Vice
President of the Company and of each Initial Guarantor, dated as of the
Closing Time, to the effect (i) in the case of the certificate to be
provided by the President or a Vice President of the Company, that there
has been no such material adverse change, (ii) that the other
representations and warranties contained in Section 1 are true and correct
with the same force and effect as though expressly made at and as of the
date of such certificate, except to the extent that such representations
and warranties expressly relate to an earlier date or later date (in which
case such representations and warranties are true and correct on and as of
such earlier date or will be true and correct on and as of such later date,
as the case may be), and (iii) that the Company or such Initial Guarantor,
as the case may be, has complied with all agreements and satisfied all
conditions on their respective parts to be performed or satisfied at or
prior to the date of such certificate. The officer signing and delivering
each such certificate may rely upon the best of his or her knowledge as to
proceedings threatened.
(d) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from Arthur Andersen LLP
a letter dated such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter
for each of the other Initial Purchasers containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to Initial Purchasers with respect to the financial statements and
certain financial information contained in the Offering Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the Representative
shall have received from Arthur Andersen LLP a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to the Closing Time.
(f) Registration Rights Agreement. At the Closing Time, the
Registration Rights Agreement shall have been fully executed and delivered
by the Company.
(g) Other Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as
such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Offered Securities as herein
contemplated and related proceedings, or in order to evidence the accuracy
and completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company or the Initial Guarantors in connection with the
issuance and sale of Offered Securities as herein contemplated shall be
satisfactory in form and substance to you.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Initial Purchasers by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party
except as provided in Section 4 hereof.
11
Section 6. Subsequent Offers and Resales of the Offered Securities.
(a) Offer and Sale Procedures. Each of the Initial Purchasers and the
Company hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Offered Securities:
(i) Offers and Sales only to Qualified Institutional Buyers or
Pursuant to Regulation S. Offers and sales of the Offered Securities shall
only be made (A) to persons whom the offeror or seller reasonably believes
to be qualified institutional buyers, as defined in Rule 144A under the
1933 Act ("Qualified Institutional Buyers"), or (B) non-U.S. persons
outside the United States, as defined in Regulation S under the 1933 Act,
to whom the offeror or seller reasonably believes offers and sales of the
Offered Securities may be made in reliance upon Regulation S under the 1933
Act. Each Initial Purchaser severally agrees that it will not offer, sell
or deliver any of the Offered Securities in any jurisdiction outside the
United States except under circumstances that will result in compliance
with the applicable laws thereof, and that it will take at its own expense
whatever action is required to permit its purchase and resale of the
Offered Securities in such jurisdictions.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 1933 Act) will be
used in the United States in connection with the offering or sale of the
Offered Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of an Offered Security acting as a fiduciary for one
or more third parties, each third party shall, in the reasonable judgment
of the applicable Initial Purchaser, be a Qualified Institutional Buyer or
a non-U.S. person outside the United States.
(iv) Subsequent Purchaser Notification. Each Initial Purchaser will
take reasonable steps to inform, and cause each of its U.S. Affiliates to
take reasonable steps to inform, persons acquiring Offered Securities from
such Initial Purchaser or Affiliate, as the case may be, in the United
States that the Offered Securities (A) have not been and will not be
registered under the 1933 Act, (B) are being sold to them without
registration under the 1933 Act in reliance on Rule 144A or in accordance
with another exemption from registration under the 1933 Act, as the case
may be, and (C) may not be offered, sold or otherwise transferred except
(1) to the Company, (2) outside the United States in accordance with
Regulation S, or (3) inside the United States in accordance with (x) Rule
144A to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Offered Securities for its own
account or for the account of a Qualified Institutional Buyer to whom
notice is given that the offer, sale or transfer is being made in reliance
on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.
(v) Restrictions on Transfer. The transfer restrictions and the other
provisions set forth in the Offering Memorandum under the heading "Notice
to
12
Investors," including the legends required thereby, shall apply to the
Offered Securities except as otherwise agreed by the Company and the
Initial Purchasers.
(vi) Delivery of Offering Memorandum. Each Initial Purchaser will
deliver to each purchaser of the Offered Securities from such Initial
Purchaser, in connection with its original distribution of the Offered
Securities, a copy of the Offering Memorandum, as amended and supplemented
at the date of such delivery.
(b) Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
(i) Integration. Except following the effectiveness of the
Registration Statement, the Company agrees that it will not and will cause
its Affiliates not to, directly or indirectly, solicit any offer to buy,
sell or make any offer or sale of, or otherwise negotiate in respect of,
securities of the Company of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the 1933 Act, such offer or
sale would render invalid (for the purpose of (i) the sale of the Offered
Securities by the Company to the Initial Purchasers, (ii) the resale of the
Offered Securities by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the Offered Securities by such Subsequent Purchasers to
others) the exemption from the registration requirements of the 1933 Act
provided by Section 4(2) thereof or by Rule 144A or by Regulation S
thereunder or otherwise.
(ii) Rule 144A Information. Each of the Company and the Initial
Guarantors agrees that, in order to render the Offered Securities eligible
for resale pursuant to Rule 144A under the 1933 Act, until the earlier of
(A) the second anniversary of the original issuance date of the Offered
Securities and (B) the date when no Offered Securities remain outstanding,
it will make available, upon request, to any holder of Offered Securities
or prospective purchasers of Offered Securities the information specified
in Rule 144A(d)(4), unless the Company or the Initial Guarantors furnish
information to the Commission pursuant to Section 13 or 15(d) of the 1934
Act.
(iii) Restriction on Repurchases. Until the expiration of two years
after the original issuance of the Offered Securities, the Company will
not, and will cause its Affiliates not to, resell any Offered Securities
which are "restricted securities" (as such term is defined under Rule
144(a)(3) under the 1933 Act), whether as beneficial owner or otherwise
(except as agent acting as a securities broker on behalf of and for the
account of customers in the ordinary course of business in unsolicited
broker's transactions).
(c) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each Initial
Purchaser understands that the Offered Securities have not been and will not be
registered under the 1933 Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the 1933 Act or pursuant to an exemption from
the registration requirements of the 1933 Act. Each Initial Purchaser severally
represents and agrees, that, except as permitted by Section 6(a) above, it has
offered and sold Offered Securities and will offer and sell Offered Securities
(i) as part of their distribution at any time and (ii) otherwise until forty
days after the later of the date upon which
13
the offering of the Offered Securities commences and the Closing Time, only in
accordance with Rule 903 of Regulation S, Rule 144A under the 1933 Act or
another applicable exemption from the registration requirements of the 1933 Act.
Accordingly, neither the Initial Purchasers, their affiliates nor any persons
acting on their behalf have engaged or will engage in any directed selling
efforts with respect to Offered Securities sold hereunder pursuant to Regulation
S, and the Initial Purchasers, their Affiliates and any person acting on their
behalf have complied and will comply with the offering restriction requirements
of Regulation S. Each Initial Purchaser severally agrees that, at or prior to
confirmation of a sale of Offered Securities pursuant to Regulation S it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Offered Securities from it or through
it during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered
under the United States Securities Act of 1933 (the
"Securities Act") and may not be offered or sold within the
United States or to or for the account or benefit of U.S.
persons (i) as part of their distribution at any time and
(ii) otherwise until forty days after the later of the date
upon which the offering of the Securities commenced and the
date of closing, except in either case in accordance with
Regulation S or Rule 144A under the Securities Act. Terms
used above have the meaning given to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by
Regulation S.
(d) Additional Representations and Warranties of Initial Purchasers. Each
Initial Purchaser severally represents and agrees that it has not entered and
will not enter into any contractual arrangements with respect to the
distribution of the Offered Securities, except with its Affiliates or with the
prior written consent of the Company.
(e) Compliance with United Kingdom Law. Each Initial Purchaser, severally
and not jointly, represents and agrees that it (a) has not offered or sold and
will not offer or sell any Offered Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their business or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulation 1995, (b) has complied with and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Offered Securities, in, from
or otherwise involving the United Kingdom, and (c) has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issue or sale of the Offered Securities to a person who
is a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996, as amended by the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1997, or is a
person to whom the document may otherwise lawfully be issued or passed on.
14
(f) Compliance with Law of the Netherlands. Each Initial Purchaser,
severally and not jointly, represents and agrees that it has not, directly or
indirectly, offered or sold and will not, directly or indirectly, offer or sell
in the Netherlands any Offered Securities other than to persons who trade or
invest in securities in the conduct of a profession or business (which include
banks, stockbrokers, insurance companies, pension funds, other institutional
investors and finance companies and treasury departments of large enterprises).
Section 7. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever arising out of or based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred, reasonably
incurred in investigating, preparing or defending against any litigation,
or investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever arising out of or based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser expressly for use in the Offering Memorandum; and provided,
further, that the foregoing indemnity agreement, with respect to any Preliminary
Offering Memorandum shall not inure to the benefit of any Initial Purchaser from
whom the person asserting any such losses, claims, damages or liabilities
purchased Offered Securities, or any person controlling such Initial Purchaser,
if a copy of the Offering Memorandum (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Initial Purchaser to such person, if required
by law so to have been delivered, at or prior to the written confirmation of the
sale of the Offered Securities to such person, and if the Offering Memorandum
(as so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities.
15
(b) Each Initial Purchaser severally agrees to indemnify and hold harmless
the Company, each Initial Guarantor, their respective directors and officers and
each person, if any, who controls the Company or any Initial Guarantor within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Offering Memorandum in reliance upon and in conformity
with written information furnished to the Company by such Initial Purchaser
expressly for use in the Offering Memorandum (or any amendment thereto).
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
the indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
Section 8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 7 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the Initial
Purchasers of each offering of Offered Securities shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and the Initial
Guarantors, on the one hand, and one or more of the Initial Purchasers, on the
other hand, in respect of such offering, as incurred, in such proportions that
the Initial Purchasers are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Offering Memorandum in respect of such offering bears to the initial public
offering price appearing thereon and the Company is responsible for the balance;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as such Initial Purchaser,
and each officer or director of the Company or any Initial Guarantor, and each
person, if any, who controls the Company or any Initial Guarantor within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company.
Section 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company or any Initial Guarantor
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Initial Purchaser or
controlling person, or by or on behalf of the Company or any
16
Initial Guarantor, and shall survive each delivery of and payment for any of the
Offered Securities.
Section 10. Termination of Agreement. You may terminate this Agreement,
immediately upon notice to the Company, at any time prior to the Closing Time
if: (i) there has been, since the date hereof or since the respective dates as
of which information is given in the Offering Memorandum, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, (ii) there shall have occurred any material adverse change in
the financial markets in the United States or any outbreak or escalation of
hostilities or other national or international calamity or crisis, the effect of
which shall be such as to make it, in your judgment, impracticable to market the
Offered Securities or enforce contracts for the sale of the Offered Securities,
(iii) trading in any securities of the Company shall have been suspended by the
Commission or a national securities exchange, or if trading generally on either
the American Stock Exchange or the New York Stock Exchange shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, by either of
said exchanges or by order of the Commission or any other governmental
authority, or (iv) if a banking moratorium shall have been declared by either
federal or New York authorities.
In the event of any termination of this Agreement, the provisions of
Section 4 hereof, the indemnity and contribution agreements set forth in
Sections 7 and 8 hereof, and the provisions of Sections 9 and 14 hereof shall
remain in effect.
Section 11. Default by One or More Initial Purchasers. If any Initial
Purchaser shall fail at the Closing Time to purchase the Offered Securities
which it is obligated to purchase hereunder (the "Defaulted Securities"), and
the aggregate amount of Defaulted Securities is not more than one-tenth of the
aggregate amount of the Offered Securities to be purchased on such date, the
other Initial Purchasers shall be obligated severally in the proportions that
the amount of the Offered Securities set forth opposite their respective names
in Schedule A hereto bears to the aggregate amount of Offered Securities set
forth opposite the names of all such non-defaulting Initial Purchasers to
purchase the Defaulted Securities; provided that in no event shall the amount of
Defaulted Securities that any Initial Purchaser has agreed to purchase pursuant
to this Agreement be increased by an amount in excess of one-tenth of such
amount of Offered Securities without the written consent of such Initial
Purchaser. If the aggregate amount of Defaulted Securities is more than
one-tenth of the aggregate amount of the Offered Securities to be purchased at
the Closing Time, and arrangements satisfactory to the Initial Purchasers and
the Company for the purchase of such Defaulted Securities are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Initial Purchasers or the Company.
No action taken pursuant to this Section shall relieve a defaulting Initial
Purchaser from liability in respect of its default under this Agreement.
In the event of any such default which does not result in a termination of
this Agreement, either the non-defaulting Initial Purchasers or the Company
shall have the right to postpone the
17
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Offering Memorandum or in any other documents or
arrangements.
Section 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed, delivered
by Federal Express service or transmitted by any facsimile communication.
Notices to the Initial Purchasers shall be directed to Merrill Lynch & Co.,
North Tower, World Financial Center, New York, New York 10281, Attention: George
Ackert (Fax: 212-449-0776). Notices to the Company shall be directed to it at
942 South Shady Grove Road, Memphis, Tennessee 38120 (if by mail or Federal
Express service), Attention: Corporate Vice President and Treasurer, Fax:
901-818-7121 with copies thereof directed to the Legal Department of the Company
at 942 South Shady Grove Road, Memphis, Tennessee 38120 (if by mail or Federal
Express Service), Attention: Staff Vice President - Securities and Corporate
Law, Fax: 901-818-7103.
Section 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company, the Initial Guarantors and any Initial Purchaser who
becomes a party hereto and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 7 and 8 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto, their respective successors and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Offered Securities from
any Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
Section 14. Governing Law. This Agreement and the rights and obligations of
the parties created hereby and thereby shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in such state. Any suit, action or proceeding brought by the
Company or any Initial Guarantor against any Initial Purchaser or, any suit
action or proceeding brought by any Initial Purchaser against the Company or any
Initial Guarantor, in connection with or arising under this Agreement shall be
brought solely in the state or federal court of appropriate jurisdiction located
in the Borough of Manhattan, The City of New York.
18
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you, the Company and the Initial Guarantors in accordance with its terms.
Very truly yours,
FEDEX CORPORATION
By: /s/ Charles M. Buchas, Jr.
---------------------------------
Name: Charles M. Buchas, Jr.
Title: Corporate Vice President and
Treasurer
FEDERAL EXPRESS CORPORATION
By: /s/ Tracy G. Schmidt
---------------------------------
Name: Tracy G. Schmidt
Title: Senior Vice President and
Chief Financial Officer
FEDEX GROUND PACKAGE SYSTEM, INC.
By: /s/ Ronald R. Trombetta
---------------------------------
Name: Ronald R. Trombetta
Title: Sr. Vice President & CFO
FEDEX CUSTOM CRITICAL, INC.
By: /s/ R. Bruce Simpson
---------------------------------
Name: R. Bruce Simpson
Title: President and CEO
VIKING FREIGHT, INC.
By: /s/ Tilton G. Gore
---------------------------------
Name: Tilton G. Gore
Title: President and CEO
19
CONFIRMED AND ACCEPTED, as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
COMMERZBANK CAPITAL MARKETS CORP.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Jay Caldwell
---------------------------------------
Authorized Representative
Acting on behalf of itself and the other
named Initial Purchasers
20
EXHIBIT A
Form of Opinion of
the Executive Vice President and General Counsel of the Company
Form of Opinion of Company Counsel
February 12, 2001
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Banc of America Securities LLC
Chase Securities Inc.
Commerzbank Capital Markets Corp.
Credit Suisse First Boston Corporation
Re: FedEx Corporation
Debt Securities (the "Offered Securities")
Ladies and Gentlemen:
This opinion is directed to the Initial Purchasers pursuant to Section
5(b)(i) of the Purchase Agreement dated February 6, 2001 (the "Purchase
Agreement"), among the Company, the Initial Guarantors and you, with respect to
the offer and sale of the Offered Securities and the Securities Guarantees. All
terms defined or used in the Purchase Agreement have the same meaning when used
herein, unless otherwise noted.
I am the Executive Vice President and General Counsel of the Company and
have acted as such in connection with the Offered Securities, the Securities
Guarantees and the Purchase Agreement. I or attorneys under my supervision have
made such examination and investigation as we have deemed necessary in order to
give the following opinion.
I do not express any opinion as to matters governed by any law other than
the federal laws of the United States of America, the General Corporation Law of
the State of Delaware and the laws of the State of Tennessee.
Based on the foregoing, it is my opinion that:
1. Each of the Company and the Initial Guarantors is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority
under such laws to own its properties and to conduct its business as described
in the Offering Memorandum; each of the Company and the Initial Guarantors is
duly qualified to do business and is in good standing in each jurisdiction in
which it owns or leases real property or in which the conduct of its business
requires such qualification, except for such instances which in the aggregate
will not have a material adverse
A-1
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise;
2. Each subsidiary of the Company which is a significant subsidiary as
defined in Rule 405 of Regulation C of the 1933 Act Regulations (each a
"Significant Subsidiary") has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Offering Memorandum,
and, to the best of my knowledge, is duly qualified to do business and is in
good standing in each jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a material adverse effect
on the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; all of the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued and is fully paid and
non-assessable, and all of such capital stock, except for directors' qualifying
shares, is owned by the Company, directly or through subsidiaries, free and
clear of any mortgage, pledge, lien, encumbrance, claim or equity;
3. Except for matters described in the Offering Memorandum, there is no
pending, or to my knowledge, threatened action or proceeding before any court or
administrative agency which individually (or in the aggregate in the case of any
group of related lawsuits) is expected to have a material adverse effect on the
financial condition of the Company or its subsidiaries considered as one
enterprise or the ability of the Company or the Initial Guarantors to perform
their respective obligations under the Purchase Agreement, the Indenture, the
Registration Rights Agreement or the Securities Guarantee;
4. The Indenture has been duly and validly authorized, executed and
delivered by the Company and the Initial Guarantors;
5. The Registration Rights Agreement has been duly and validly authorized,
executed and delivered by the Company and the Initial Guarantors;
6. The Offered Securities and Securities Guarantees have been duly and
validly authorized by all necessary corporate action of the Company and the
Initial Guarantors;
7. Each of the Company and the Initial Guarantors possesses all permits,
approvals, franchises and other rights from federal aviation, aeronautical,
communications, transportation and shipping authorities which are requisite for
the conduct of its business as described in the Offering Memorandum or for the
actions contemplated by the Purchase Agreement and the Registration Rights
Agreement and the offering contemplated by the Offering Memorandum; and the
actions contemplated by the Purchase Agreement, the Indenture and the
Registration Rights Agreement and the offering contemplated by the Offering
Memorandum, are not in violation of any federal statute or regulation relating
to aviation, aeronautics, communications, transportation or shipping;
8. I have reviewed or caused to be reviewed by attorneys under my
supervision the Offering Memorandum and each amendment and supplement thereto
(including the documents incorporated by reference) and have no reason to
believe that, as of its issue date, or as of the
A-2
Closing Time, the Offering Memorandum or any such amendment or supplement (or
any such documents incorporated by reference) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
9. I do not know of any statute or regulation or legal or governmental
proceeding material to the business of the Company and its subsidiaries
considered as one enterprise which is not described in the Offering Memorandum,
nor of any contract or document material to the business of the Company and its
subsidiaries considered as one enterprise which is not described in the Offering
Memorandum; and the descriptions in the Offering Memorandum of the contracts and
other documents therein described are accurate and fairly present the
information shown;
10. The execution and delivery by the Company and the Initial Guarantors of
the Purchase Agreement and the consummation by the Company and the Initial
Guarantors of the transactions herein and therein contemplated and compliance
with the terms of the Purchase Agreement do not and will not conflict with or
result in a breach of any of the terms of the Certificate of Incorporation or
By-laws of the Company or of any Initial Guarantor, and will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan, credit or note
agreement, lease or other agreement or instrument material to the Company or any
Initial Guarantor to which the Company or any Initial Guarantor is a party or by
which it or any of its properties are bound, or any existing applicable law,
rule, regulation, judgment, order or decree of any government, governmental
instrumentality or court, having jurisdiction over the Company or any Initial
Guarantor or any of their respective properties;
11. The Offered Securities, the Securities Guarantees, the Registration
Rights Agreement and the Indenture conform in all material respects to the
description thereof contained in the Offering Memorandum.
12. No authorization, approval, consent or license of any regulatory body
or authority (other than under the securities or Blue Sky laws of the various
states) is required for the valid authorization, issuance, sale and delivery of
the Offered Securities and the Securities Guarantees as herein contemplated or
the valid authorization, execution, delivery and performance by the Company or
the Initial Guarantors of the Purchase Agreement and the Indenture or the
consummation by the Company and the Initial Guarantors of the transactions
contemplated herein or therein, or, if so required, all such authorizations,
approvals, consents and licenses, specifying the sale, have been obtained and
are in full force and effect;
13. The documents incorporated by reference in the Offering Memorandum
comply as to form in all material respects with the requirements of the 1934 Act
and the 1934 Act Regulations in effect at the time such documents were filed
with the Commission; and
14. The Purchase Agreement has been duly and validly authorized, executed
and delivered by the Company and the Initial Guarantors.
A-3
With respect to the opinions set forth in paragraphs (4), (5), (6) and (14)
above, I have relied upon the opinion of local counsel in respect of Initial
Guarantors not incorporated in Delaware or Tennessee.
In rendering the foregoing opinion, we have assumed that (i) all signatures
on all documents examined by us are genuine and that where any such signature
(other than a signature purporting to have been made on behalf of the Company or
any Initial Guarantor) purports to have been made in a corporate, governmental,
fiduciary or other capacity, the person who affixed such signature had the due
authority to do so, (ii) certain factual matters contained in certificates of
public officials are accurate, true and correct, and (iii) photostat copies of
such documents, records and certificates conform to the originals.
This opinion is intended solely for the benefit of the Initial Purchasers
and is not to be relied on by, and no copies of it are to be delivered to, any
other person without my prior written consent, except that Davis Polk &
Wardwell, special counsel to the Company, and counsel to the Initial Purchasers
may rely upon this opinion as to all matters of Tennessee law in rendering its
opinion of even date herewith. I am not assuming any professional responsibility
to any other person by rendering this opinion. It is understood that this
opinion speaks as of the date given, notwithstanding any delivery as
contemplated above on any other date.
Very truly yours,
Kenneth R. Masterson
A-4
EXHIBIT B
Form of Opinion of Davis Polk & Wardwell
1. The Indenture has been duly and validly authorized, executed and delivered by
the Company and the Initial Guarantors and (assuming the Indenture has been duly
authorized, executed and delivered by the Trustee) constitutes a valid and
binding agreement of the Company and the Initial Guarantors, enforceable in
accordance with its terms;
2. Each of the Purchase Agreement and the Registration Rights Agreement has been
duly and validly authorized, executed and delivered by the Company and the
Initial Guarantors and (assuming the due execution thereof by the other parties
thereto) constitutes a valid and binding agreement of the Company and the
Initial Guarantors, enforceable in accordance with its terms;
3. The Offered Securities and Securities Guarantees are in due and proper form
and have been duly and validly authorized by all necessary corporate action and,
when executed and authenticated as specified in the Indenture and delivered
against payment of the consideration therefor determined in accordance with the
Purchase Agreement, will be valid and binding obligations of the Company and the
Initial Guarantors, enforceable in accordance with their terms, and each holder
of the Offered Securities and Securities Guarantees will be entitled to the
benefits of the Indenture;
4. It is not necessary in connection with the offer, sale and delivery of the
Offered Securities and Securities Guarantees to the Initial Purchasers and to
each Subsequent Purchaser in the manner contemplated by the Purchase Agreement
and the Offering Memorandum (it being understood that no opinion is expressed as
to any other offer or resale of the Offered Securities) to register the Offered
Securities and the Securities Guarantees under the 1933 Act or to qualify the
Indenture under the 1939 Act; and
5. We have reviewed the Offering Memorandum and each amendment and supplement
thereto (including the documents incorporated by reference) and have no reason
to believe that, as of its issue date, or as of the Closing Time, the Offering
Memorandum or any such amendment or supplement (or any such documents
incorporated by reference) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstance under which they were
made, not misleading.
Our opinions as to the enforceability of the Indenture, the Registration
Rights Agreement, the Offered Securities, the Securities Guarantees and Purchase
Agreement set forth in subparagraphs (1), (2) and (3) above are limited by
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting enforcement of creditors' rights or by general equity
principles and subject to any principles of public policy limiting the right to
enforce the indemnification and contribution provisions contained in Sections 7
and 8 of the Purchase Agreement and in Section 5 of the Registration Rights
Agreement.
B-1
In rendering the foregoing opinion, we have assumed that (i) all signatures
on all documents examined by us are genuine and that where any such signature
purports to have been made in a corporate, governmental, fiduciary or other
capacity, the person who affixed such signature had the due authority to do so,
(ii) certain factual matters contained in certificates of public officials are
accurate, true and correct, and (iii) photostat copies of such documents,
records and certificates conform to the originals.
With respect to the opinions set forth in paragraphs (1), (2) and (3)
above, Davis Polk and Wardwell may rely on the opinion of the Executive Vice
President and General Counsel of the Company and local counsel with respect to
Initial Guarantors not incorporated in Delaware or Tennessee with respect to
issues involving the corporate law of states other than New York and Delaware.
This opinion is being rendered at the request of the Company solely for the
benefit of the Initial Purchasers and is not to be relied on by, and no copies
of it to be delivered to, any other person without prior written consent of
Davis Polk & Wardwell, except that Kenneth R. Masterson, Executive Vice
President and General Counsel of the Company may rely on this opinion as to all
matters of New York law in rendering his opinion of even date herewith.
Very truly yours,
B-2
EXHIBIT C
Form of Registration Rights Agreement
C-1
SCHEDULE A
Principal
Amount of
Name of Initial Purchaser 2004 Notes
-------------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................ $125,000,000
Banc of America Securities LLC................................ 50,000,000
Chase Securities Inc.......................................... 50,000,000
Commerzbank Capital Markets Corp.............................. 12,500,000
Credit Suisse First Boston Corporation........................ 12,500,000
------------
Total......................................................... $250,000,000
============
Principal
Amount of
Name of Initial Purchaser 2006 Notes
-------------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................ $125,000,000
Banc of America Securities LLC................................ 50,000,000
Chase Securities Inc.......................................... 50,000,000
Commerzbank Capital Markets Corp.............................. 12,500,000
Credit Suisse First Boston Corporation........................ 12,500,000
------------
Total......................................................... $250,000,000
============
Sch A-1
Principal
Amount of
Name of Initial Purchaser 2011 Notes
-------------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................ $125,000,000
Banc of America Securities LLC................................ 50,000,000
Chase Securities Inc.......................................... 50,000,000
Commerzbank Capital Markets Corp.............................. 12,500,000
Credit Suisse First Boston Corporation........................ 12,500,000
-------------
Total......................................................... $250,000,000
============
Sch A-2
SCHEDULE B
FEDEX CORPORATION
$250,000,000
6 5/8% Notes due 2004
1. The initial public offering price of the 2004 Notes shall be 99.885% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the 2004
Notes shall be 99.435% of the principal amount thereof.
3. The interest rate on the 2004 Notes shall be 6 5/8% per annum.
$250,000,000
6 7/8% Notes due 2006
1. The initial public offering price of the 2006 Notes shall be 99.928% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the 2006
Notes shall be 99.328% of the principal amount thereof.
3. The interest rate on the 2006 Notes shall be 6 7/8% per annum.
$250,000,000
7 1/4% Notes due 2011
1. The initial public offering price of the 2011 Notes shall be 99.278% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the 2011
Notes shall be 98.628% of the principal amount thereof.
3. The interest rate on the 2011 Notes shall be 7 1/4% per annum.
Sch B-1