AMENDMENT NO. 1
DATED AS OF DECEMBER 10, 1998
TO
CREDIT AGREEMENT
DATED AS OF JANUARY 15, 1998
THIS AMENDMENT NO. 1 TO THE CREDIT AGREEMENT (the "Amendment") is made
as of December 10, 1998 by and among FDX Corporation, a Delaware corporation
(the "Borrower"), the Lenders and The First National Bank of Chicago, in its
capacity as agent ("Agent"). Defined terms used herein and not otherwise defined
herein shall have the meanings given to them in that certain Credit Agreement
dated as of January 15, 1998 by and among the Borrower, the Lenders, First
Chicago Capital Markets, Inc., as Arranger, X.X. Xxxxxx Securities Inc., as
Co-Arranger and Syndication Agent, Chase Securities Inc., as Co-Arranger and
Documentation Agent, and the Agent (the "Credit Agreement").
WITNESSETH
WHEREAS, the Borrower, the Lenders and the Agent are parties to the
Credit Agreement;
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend
the Credit Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, the Lenders and the Agent agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT. Effective as of December 10, 1998
subject to the satisfaction of the conditions precedent set forth in SECTION 4
below, the Credit Agreement is hereby amended as follows:
1.1. Article I is amended as follows:
(a) The definitions of "Applicable Tranche A Facility Fee
Percentage" and "Applicable Tranche B Facility Fee Percentage" are
amended in their entirety to read as follows:
"'Applicable Tranche A Facility Fee Percentage' means, subject
to the following provisions of this definition, the per annum
rate corresponding to the Level in effect from time to time,
as set forth in the following table:
Level Applicable Tranche A Facility Fee Percentage
----- --------------------------------------------
I .100%
II .125%
III .150%
IV .200%
V .250%
Each change in the Applicable Tranche A Facility Fee
Percentage resulting from a change in a Rating shall take
effect at the time such change in such Rating is publicly
announced by the relevant rating agency."
"'Applicable Tranche B Facility Fee Percentage' means, subject
to the following provisions of this definition, the per annum
rate corresponding to the Level in effect from time to time,
as set forth in the following table:
Level Applicable Tranche B Facility Fee Percentage
----- --------------------------------------------
I .075%
II .100%
III .125%
IV .175%
V .225%
Each change in the Applicable Tranche B Facility Fee
Percentage resulting from a change in a Rating shall take
effect at the time such change in such Rating is publicly
announced by the relevant rating agency."
(b) The definitions of "Applicable Tranche A Margin" and
"Applicable Tranche B Margin" are amended in their entirety to read as
follows:
"'Applicable Tranche A Margin' means, subject to the following
provisions of this definition, the per annum rate of interest
corresponding to the Level in effect from time to time, as set
forth in the following table:
2
Level Applicable Tranche A Margin
----- ---------------------------
I .275%
II .375%
III .475%
IV .675%
V 1.125%
Each change in the Applicable Tranche A Margin resulting from
a change in a Rating shall take effect at the time such change
in such Rating is publicly announced by the relevant rating
agency."
"'Applicable Tranche B Margin' means, subject to the following
provisions of this definition, the per annum rate of interest
corresponding to the Level in effect from time to time, as set
forth in the following table:
Level Applicable Tranche B Margin
----- ---------------------------
I .300%
II .400%
III .500%
IV .700%
V 1.15%
Each change in the Applicable Tranche B Margin resulting from
a change in a Rating shall take effect at the time such change
in such Rating is publicly announced by the relevant rating
agency."
(c) The definition of "Consolidated Cash Flow" is amended in
its entirety to read as follows:
"'Consolidated Cash Flow' means, on a consolidated basis for
the Borrower and its Consolidated Subsidiaries for the twelve
most recent complete fiscal months, the sum of (i) Adjusted
Net Income, PLUS (ii) Interest Expense, PLUS (iii) Rent
Expense, in each case as determined in accordance with GAAP."
(d) The definition of "Material Adverse Effect" is amended in
its entirety to read as follows:
3
"Material Adverse Effect" means a material adverse effect
(excluding the effects of an actual or threatened business
interruption, including but not limited to self-help actions
or a strike, by members of the FedEx Pilots Association in
late 1998 or 1999, or contingency plans related thereto) on
(i) the business, Property, condition (financial or
otherwise), results of operations, or prospects of the
Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the
Loan Documents, or (iii) the validity or enforceability of any
of the Loan Documents or the rights or remedies of the Agent
or the Lenders thereunder.
(e) The definitions of "Xxxxx'x Rating" and "S&P Rating" are
amended to add the phrase "non-credit enhanced" after the word
"unsecured" in the second line of each such definition.
(f) The following definitions are added to Article I in
appropriate alphabetical order:
"Adjusted Net Income" means, on a consolidated basis, for the
Borrower and its Consolidated Subsidiaries for the twelve most
recent complete fiscal months, income (loss) before income
taxes MINUS, to the extent included in determining income
(loss) before income taxes, any net loss or gain realized in
connection with any sale or disposition of any asset (other
than in the ordinary course of business) or any extraordinary
or non-recurring loss or gain resulting from an actual or
threatened business interruption relating to any self-help
actions or strike, by members of the FedEx Pilots Association
in late 1998 or 1999, or contingency plans related thereto,
provided that the aggregate amount of the foregoing reductions
to income (loss) before income taxes shall not exceed
$1,000,000,000.
"L/C Facility" means the Syndicated Revolving Standby Letter
of Credit Facility dated as of July 7, 1998, among the
Borrower, the issuing banks named therein, The Sumitomo Bank,
Limited, as agent thereunder, and the co-agents named therein,
and all instruments, agreements and contractual obligations
entered into in connection therewith, as amended by that
certain First Amendment and Second Amendment (Temporary)
thereto, each dated as of December 10, 1998, and as the same
may be further amended, modified or supplemented from time to
time.
"Year 2000 Problem" means the risk that computer applications
used by the Borrower or any of its Subsidiaries (or their
respective suppliers and vendors) may be unable to recognize
or properly perform date-sensitive functions involving certain
dates prior to and any date after December 31, 1999.
1.2 Section 2.5 is amended to add the following at the end
thereof:
4
"(e) The Borrower agrees to pay to the Agent, for the
account of each Lender, for each calendar month in which the
average daily amount of all Advances outstanding hereunder
during such calendar month exceeds 25% of the average daily
Aggregate Commitment during such month, a utilization fee on
the average daily amount of Advances outstanding during such
calendar month, at a per annum rate equal to 0.125%. Such
utilization fee shall be payable in arrears on each Payment
Date hereafter and on the Tranche A Facility Termination Date
and the Tranche B Facility Termination Date."
1.3 The first sentence of Section 5.4 is deleted and the
following is substituted therefor:
"5.4. FINANCIAL STATEMENTS. The May 31, 1998 audited
consolidated financial statements and August 31, 1998
unaudited consolidated financial statements of the Borrower
and its Consolidated Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with GAAP in effect on the
dates such statements were prepared and fairly present the
consolidated financial condition and operations of the
Borrower and its Consolidated Subsidiaries at such dates and
the consolidated results of their operations for the periods
then ended (except, in the case of such unaudited statements,
for normal year-end adjustments)."
1.4 The Credit Agreement is amended to add the following after
Section 5.17:
"5.18 YEAR 2000 COMPLIANCE. The Borrower has (i)
initiated a review and assessment of all areas within the
business and operations of the Borrower and any of its
Subsidiaries (including those areas affected by suppliers and
vendors) that could be adversely affected by the Year 2000
Problem, (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis and (iii) to the date
hereof, implemented such plan in accordance with such
timetable. The Borrower reasonably believes that all computer
applications (including those of suppliers and vendors) that
are material to the business or operations of the Borrower or
any of its Subsidiaries will, on a timely basis, be able to
properly perform date-sensitive functions for all dates before
and from and after January 1, 2000, except to the extent that
a failure to do so could not reasonably be expected to have a
Material Adverse Effect."
1.5 Section 6.13 is amended in its entirety to read as
follows:
"6.13. FIXED CHARGE COVERAGE. The Borrower will at
all times maintain a ratio of (a) Consolidated Cash Flow to
(b) the sum of Interest Expense and Rent Expense, in an amount
not less than 1.20 to 1 through May 31, 2000, and 1.25 to 1
thereafter."
5
1.6 Section 6.18 is amended to delete the "and" at the end of
clause (c) and the period at the end of clause (d), and add the
following immediately thereafter:
"; and
(e) Guaranties included or required under the L/C
Facility."
1.7 Section 6.20 is amended to:
(a) add "(other than Federal Express Canada Ltd. or
Federal Express (Hong Kong) Limited)" after the
phrase "Significant Subsidiary" in the second line
thereof.
(b) add "(a)" after the words "Section 4.1" in the sixth
line of clause (a) and in the seventh line of clause
(b).
1.8 Section 6.21 is amended in its entirety to read as
follows:
"6.21. NEGATIVE COVENANTS IN SUBSIDIARY AGREEMENTS.
The Borrower will not permit any of its Subsidiaries to enter
into, after the date hereof, any agreement, instrument or
indenture that, directly or indirectly, contains negative
covenants restricting any of the following (or otherwise
prohibits or restricts, or has the effect of prohibiting or
restricting, any of the following):
(i) the incurrence or payment of Indebtedness
owed to the Borrower or any other Subsidiary
of the Borrower;
(ii) the granting of Liens;
(iii) the declaration or payment of dividends; and
(iv) the making of loans, advances or other
Investments to or in the Borrower or any
other Subsidiary of the Borrower."
1.9 Schedule 2 of the Credit Agreement is hereby replaced with
Schedule 2 attached to Amendment No. 1 hereto.
2. WAIVER. Subject to the satisfaction of the conditions precedent set
forth in SECTION 4 of this Amendment and the accuracy of the representations and
warranties set forth in SECTION 5 of this Amendment, the Agent and Lenders waive
the Borrower's noncompliance with Section 6.21 of the Credit Agreement as a
result of the execution of guaranties by certain of the Borrower's Subsidiaries
in connection with the L/C Facility. The foregoing waiver is only effective to
the extent set forth in this SECTION 2. Nothing herein constitutes a waiver of
any other Default or Unmatured Default under the Credit Agreement or of any
other provision of the Credit
6
Agreement, and except as provided in this SECTION 2, the foregoing waiver does
not affect or diminish the right of the Lenders and the Agent to require strict
performance by the Borrower of each provision of the Credit Agreement and the
Loan Documents.
3. EXTENSION OF TRANCHE B FACILITY TERMINATION DATE. Each of the
Lenders listed on EXHIBIT B attached hereto consents to the extension of the
Tranche B Facility Termination Date to January 14, 2000, subject to Section 2.19
of the Credit Agreement, and waives its right under Section 2.19 to revoke such
consent.
4. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective
as of the date set forth above when the Agent shall have received:
(i) a counterpart of this Amendment executed by the Borrower,
the Agent and Lenders constituting the Required Lenders; PROVIDED,
HOWEVER, that as to each Lender listed on EXHIBIT B, Section 3 hereof
shall become effective only when the Agent shall have received a
counterpart of this Amendment executed by each such Lender;
(ii) a counterpart of the Acknowledgment attached hereto as
EXHIBIT A executed by each of the Guarantors; and
(iii) such documents evidencing corporate existence, action
and authority of the Borrower and the Guarantors as the Agent may
reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants that:
(a) This Amendment, and the Credit Agreement as previously
executed and as amended hereby, constitute legal, valid and binding
obligations of the Borrower and are enforceable against the Borrower in
accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Borrower
reaffirms all covenants, representations and warranties made in the
Credit Agreement.
(c) No Default or Unmatured Default has occurred and is
continuing.
6. EFFECT ON CREDIT AGREEMENT.
(a) During the period that this Amendment is effective, each
reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a
reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement
and all other Loan Documents, instruments and agreements executed
and/or delivered in connection therewith, shall remain in full force
and effect, and are hereby ratified and confirmed.
7
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of the Agent or the Lenders, nor
constitute a waiver of any provision of the Credit Agreement or any
other Loan Documents, instruments and agreements executed and/or
delivered in connection therewith.
(d) In the event of any inconsistency between the provisions
of this Amendment and the provisions of that certain Amendment No. 2
(Temporary) dated as of December 10, 1998 among the Borrower, the Agent
and the Lenders (the "Temporary Amendment"), the Temporary Amendment
shall govern and control, so long as such Temporary Amendment is in
effect.
7. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Illinois.
8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. COUNTERPARTS. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
8
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Amendment as of the date first above written.
FDX CORPORATION
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
THE CHASE MANHATTAN BANK
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
KREDIETBANK N.V., GRAND
CAYMAN BRANCH
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
CITICORP USA, INC.
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
COMMERZBANK
AKTIENGESELLSCHAFT, ATLANTA
AGENCY
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
NATIONSBANK, N.A.
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
CIBC INC.
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
THE FUJI BANK, LIMITED
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
MELLON BANK, N.A.
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
KEYBANK NATIONAL ASSOCIATION
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
FIRST AMERICAN NATIONAL BANK
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
BANK OF HAWAII
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
THE BANK OF NEW YORK
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
THE BANK OF NOVA SCOTIA
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
CREDIT SUISSE FIRST BOSTON
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
DEUTSCHE VERKEHRS BANK
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
THE SANWA BANK, LIMITED
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
SUNTRUST BANK, NASHVILLE, N.A.
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
BANCA NAZIONALE DEL LAVORO
SPA
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
THE SUMITOMO BANK, LIMITED
By: /s/
----------------------
Name:
----------------------
Title:
----------------------
EXHIBIT A
TO
AMENDMENT NO. 1
DATED AS OF DECEMBER 10, 1998
TO
CREDIT AGREEMENT
DATED AS OF JANUARY 15, 1998
ACKNOWLEDGMENT
--------------
Each of the undersigned hereby (i) acknowledges receipt of a copy of
Amendment No. 1 dated as of December 10, 1998 to the Credit Agreement dated as
of January 15, 1998 by and among the Borrower, the Lenders, First Chicago
Capital Markets, Inc., as Arranger, X.X. Xxxxxx Securities Inc., as Co-Arranger
and Syndication Agent, Chase Securities Inc., as Co-Arranger and Documentation
Agent, and the Agent (the "Credit Agreement"), (ii) reaffirms the terms and
conditions of that certain Guaranty dated as of January 27, 1998 (the
"Guaranty") and (iii) acknowledges and agrees that the Guaranty (A) remains in
full force and effect and (B) is hereby ratified and confirmed.
FEDERAL EXPRESS CORPORATION
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
RPS, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
CALIBER SYSTEM, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
VIKING FREIGHT, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
XXXXXXX EXPRESS, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
Dated as of December 10, 1998
EXHIBIT B
LENDERS CONSENTING TO
TRANCHE B FACILITY TERMINATION DATE EXTENSION
THE FIRST NATIONAL BANK OF CHICAGO
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
THE CHASE MANHATTAN BANK
KREDIETBANK N.V.
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
CITICORP USA, INC.
COMMERZBANK AKTIENGESELLSCHAFT, ATLANTA AGENCY
NATIONSBANK, N.A.
THE FUJI BANK, LIMITED
MELLON BANK, N.A.
KEYBANK NATIONAL ASSOCIATION
FIRST AMERICAN NATIONAL BANK
BANK OF HAWAII
THE BANK OF NEW YORK
THE BANK OF NOVA SCOTIA
CREDIT SUISSE FIRST BOSTON
DEUTSCHE VERKEHRS BANK
THE SANWA BANK, LIMITED
SUNTRUST BANK
BANCA NAZIONALE DEL LAVORO SPA
THE SUMITOMO BANK, LIMITED
