EXHIBIT 4.a.5
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS A PASS THROUGH CERTIFICATES
Dated as of June 15, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Subordination Agent,
as agent and trustee for the
Federal Express Corporation 1998-1-A Pass Through Trust,
as Borrower
and
KREDITANSTALT FUR WIEDERAUFBAU
as Liquidity Provider
Relating to
Federal Express Corporation 1998-1-A Pass Through Trust
6.72% Federal Express Corporation Pass Through Certificates,
Series 1998-1
TABLE OF CONTENTS
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Page
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms.................................. 1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances........................................... 7
Section 2.02 Making the Advances.................................... 7
Section 2.03 Fees................................................... 9
Section 2.04 Reduction or Termination of the Commitment............. 9
Section 2.05 Repayments of Interest Advances or the Final Advance... 9
Section 2.06 Repayments of Downgrade Advances....................... 10
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement................................ 11
Section 2.08 Book Entries........................................... 11
Section 2.09 Payments from Available Funds Only..................... 11
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs........................................ 12
Section 3.02 Capital Adequacy....................................... 13
Section 3.03 Payments Free of Deductions............................ 13
Section 3.04 Payments............................................... 14
Section 3.05 Computations........................................... 14
Section 3.06 Payment on Non-Business Days........................... 14
Section 3.07 Interest............................................... 15
Section 3.08 Replacement of Borrower................................ 16
Section 3.09 Funding Loss Indemnification........................... 16
Section 3.10 Illegality............................................. 16
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of
Section 2.01........................................... 17
Section 4.02 Conditions Precedent to Borrowing...................... 19
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower.................. 20
Section 5.02 Negative Covenants of the Borrower..................... 20
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance.......................................... 21
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc........................................ 21
Section 7.02 Notices, Etc........................................... 21
Section 7.03 No Waiver; Remedies.................................... 22
Section 7.04 Further Assurances..................................... 22
Section 7.05 Indemnification; Survival of Certain Provisions........ 22
Section 7.06 Liability of the Liquidity Provider.................... 23
Section 7.07 Costs, Expenses and Taxes.............................. 23
Section 7.08 Binding Effect; Participations......................... 24
Section 7.09 Severability........................................... 24
Section 7.10 GOVERNING LAW.......................................... 25
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial....... 25
Section 7.12 Execution in Counterparts.............................. 27
Section 7.13 Entirety............................................... 27
Section 7.14 Headings; Section References........................... 27
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES....... 27
ANNEX I - Interest Advance Notice of Borrowing
ANNEX II - Downgrade Advance Notice of Borrowing
ANNEX III - Notice of Replacement Borrower
ANNEX IV - Notice of Automatic Reduction of Commitment
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS A PASS THROUGH CERTIFICATES
IRREVOCABLE REVOLVING CREDIT AGREEMENT, CLASS A PASS THROUGH
CERTIFICATES dated as of June 15, 1998 between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity
but solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class A Pass Through Trust (as
defined below) (the "Borrower"), and KREDITANSTALT FUR WIEDERAUFBAU, a
corporation organized under the public law of the Republic of Germany ("KfW"
or the "Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class A Supplement (such term and all
other capitalized terms used in these recitals having the meanings set forth
or referred to in Section 1.01), the Class A Pass Through Trust is issuing the
Class A Pass Through Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class A Pass Through Certificates in accordance
with their terms, has requested the Liquidity Provider to enter into this
Agreement, providing in part for the Borrower to request in specified
circumstances that Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. (a) Definitions. As used
in this Agreement and unless otherwise expressly indicated, or unless the
context clearly requires otherwise, the following capitalized terms shall have
the following respective meanings for all purposes of this Agreement:
"Advance" means an Interest Advance, a Final Advance, a Downgrade
Advance or an Applied Downgrade Advance.
"Applicable Liquidity Rate" means the rates of interest specified
in Section 3.07(g) with respect to any Advance or any other amount.
"Applicable Margin" means, with respect to any Advance, 1.25% (125
basis points) per annum.
"Applied Downgrade Advance" has the meaning assigned to such term
in Section 2.06(a).
"Available Commitment" means, at any time of determination, an
amount equal to (i) the Commitment at such time less (ii) subject to the
third sentence of Section 2.02(a), the aggregate amount of each Advance
outstanding at such time; provided that following a Downgrade Advance or
a Final Advance, the Available Commitment shall be zero.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to
(a) the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not
a Business Day, for the preceding Business Day) by the Federal Reserve
Bank of New York, or if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day for such
transactions received by the Liquidity Provider from three Federal funds
brokers of recognized standing selected by it, plus (b) one-quarter of 1
percent (0.25%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital of
parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of
a Notice of Borrowing or pursuant to Section 6.01.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Memphis, Tennessee, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or, so long
as any Class A Pass Through Certificates are outstanding, the city and
state in which the Pass Through Trustee of the Class A Pass Through
Trust maintains its Corporate Trust Office or receives or disburses
funds, and, if the applicable Business Day relates to any Advance or
other amount bearing interest based on the LIBOR Rate, on which dealings
in U.S. dollars are carried on in the London interbank market (a "London
Business Day"); provided, however, that if the day in question relates
to the effectiveness of the LIBOR Rate, Business Day shall mean a London
Business Day on which commercial banks are not required or authorized to
close in New York, New York.
"Calculation Agent" means the Liquidity Provider.
"Commitment" means, initially, $46,858,223, as the same may be
reduced from time to time in accordance with Section 2.04(a).
"Downgrade Advance" means an Advance made pursuant to Section
2.02(b).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable fees and disbursements of
legal counsel and costs of investigation), provided that Expenses shall
not include any Taxes.
"Expiry Date" means July 30, 2023.
"Final Advance" means an Advance made pursuant to Sections 2.02(c)
and 6.01.
"Intercreditor Agreement" means the Intercreditor Agreement dated
the date hereof, among the Pass Through Trustee, the Liquidity Provider,
the liquidity provider under each Liquidity Facility (other than this
Agreement) and the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Interest Advance" means an Advance made pursuant to Section
2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each
of the following periods:
(i) the period beginning on the date such LIBOR Advance is
made (or is converted from a Base Rate Advance) and ending on the
next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the next
Regular Distribution Date;
provided, however, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning
on the third Business Day following the Liquidity Provider's making of such
Final Advance (in the cause of clause (x) above) or the Regular Distribution
Date following such conversion (in the case of clause (y) above).
"Lending Office" means the lending office of the Liquidity
Provider, presently located at Frankfurt, Germany, or such other lending
office as the Liquidity Provider from time to time shall notify the
Borrower as its lending office hereunder.
"LIBOR Advance" means an Advance bearing interest at a rate based
upon the LIBOR Rate.
"LIBOR Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to close
in New York, New York or London, England.
"LIBOR Rate" means, with respect to any Interest Period, the
interest rate per annum (calculated on the basis of a 360-day year and
actual days elapsed) at which deposits in United States dollars are
offered to prime banks in the London interbank market as indicated on
display page 3750 (British Bankers Association-LIBOR) of the Dow ▇▇▇▇▇
Markets Service (or such other page as may replace such display page
3750 for the purpose of displaying London interbank offered rates for
United States dollar deposits) or, if not so indicated, the average
(rounded upwards to the nearest 1/100%), as determined by the
Calculation Agent, of such rates as indicated on the Reuters Screen LIBO
Page (or such other page as may replace such Reuters Screen LIBO Page
for the purpose of displaying London interbank offered rates for United
States dollar deposits) or, if neither such alternative is indicated,
the average (rounded upwards to the nearest 1/100%), as determined by
the Calculation Agent, of such rates offered by the London Reference
Banks to prime banks in the London interbank market, in each case at or
about 11:00 a.m. (London time) on the day two LIBOR Business Days prior
to the first day of such Interest Period for deposits of a duration
equal to such Interest Period (or such other period most nearly
corresponding to such period) in an amount substantially equal to the
principal amount of the applicable LIBOR Advance as of the first day of
such Interest Period. The Calculation Agent will, if necessary, request
that each of the London Reference Banks provide a quotation of its rate.
If at least two such quotations are provided, the rate will be the
average of the quotations (rounded upwards to the nearest 1/100%). If
no such quotation can be obtained, the rate will be LIBOR for the
immediately preceding Interest Period.
"Liquidity Event of Default" means the occurrence of the
following: all of the Equipment Trust Certificates shall have been
either declared to be immediately due and payable or shall not have been
paid at their final maturity. Notwithstanding the foregoing, a
Liquidity Event of Default shall not occur upon an automatic acceleration
of the Equipment Trust Certificates as a result of a Federal Express
Corporation Bankruptcy Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) each
affiliate of the Liquidity Provider, (iii) the respective directors,
officers, employees, agents and servants of the Liquidity Provider and
its affiliates, and (iv) the successors and permitted assigns of the
persons described in clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"London Reference Banks" means the principal London offices of
National Westminster Bank Plc, Barclays Bank Plc and Bayrische
Landesbank Girozentrale, or such other bank or banks as may from time to
time be agreed to by Federal Express Corporation and the Calculation
Agent.
"Non-Excluded Tax" has the meaning specified in Section 3.03.
"Notice of Borrowing" has the meaning specified in Section 2.02(d).
"Notice of Replacement Borrower" has the meaning specified in
Section 3.08.
"Participant" has the meaning assigned to such term in Section
7.08(b).
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Trust
Certificates are Performing Equipment Trust Certificates.
"Prospectus" means the basic prospectus included in the
registration statement on Form S-3 (File No. 333-49411) filed by Federal
Express Corporation relating to certain pass through certificates, as
supplemented by the prospectus supplement dated June 30, 1998 reflecting
the terms of the Pass Through Certificates, as such Prospectus may be
amended or supplemented.
"Related Indemnitee" means, with respect to any Liquidity
Indemnitee, its director, officer, employee, agent, affiliate or
employer.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the Class A Pass Through Certificates, that would be
payable on the Class A Pass Through Certificates on each of the three
successive semiannual Regular Distribution Dates immediately following
such day or, if such day is a Regular Distribution Date, on such day and
the succeeding two semiannual Regular Distribution Dates, in each case
calculated on the basis of the Pool Balance of the Class A Pass Through
Certificates on such day and without regard to expected future payments
of principal on the Class A Pass Through Certificates.
"Termination Date" means the earliest to occur of the following:
(i) the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class A Pass Through Certificates
have been paid in full (or provision has been made for such payment in
accordance with the Intercreditor Agreement and the Pass Through
Agreements) or are otherwise no longer entitled to the benefits of this
Agreement; (iii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that a Replacement Liquidity Facility has been
substituted for this Agreement in full pursuant to Section 3.6(e) of the
Intercreditor Agreement; (iv) the date on which the Liquidity Provider
makes the Final Advance; and (v) the date on which no Advance is or may
(including by reason of reinstatement as herein provided) become
available for a Borrowing hereunder.
"Unpaid Advance" has the meaning assigned to such term in Section
2.05.
(b) Terms Defined in the Intercreditor Agreement. For all
purposes of this Agreement, the following terms shall have the respective
meanings assigned to such terms in the Intercreditor Agreement:
"Class A Cash Account", "Class A Pass Through Certificateholders",
"Class A Pass Through Certificates", "Class A Pass Through Trust",
"Class A Supplement", "Class B Pass Through Certificates", "Class C Pass
Through Certificates", "Closing Date", "Controlling Party", "Corporate
Trust Office", "Distribution Date", "Equipment Trust Certificates",
"Federal Express Corporation", "Federal Express Corporation Bankruptcy
Event", "Indenture", "Investment Earnings", "Liquidity Facility",
"▇▇▇▇▇'▇", "Operative Agreements", "Participation Agreements", "Pass
Through Agreement", "Pass Through Certificate", "Pass Through Trustee",
"Performing Equipment Trust Certificates", "Person", "Pool Balance",
"Rating Agency", "Regular Distribution Dates", "Replacement Liquidity
Facility", "Responsible Officer", "Scheduled Payment", "Special
Payment", "Standard & Poor's", "Stated Interest Rate", "Subordination
Agent", "Taxes", "Threshold Rating", "Triggering Event", "Underwriters",
"Underwriting Agreement" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances. The Liquidity Provider hereby
irrevocably agrees, on the terms and conditions hereinafter set forth, to make
Advances to the Borrower from time to time on any Business Day during the
period from the Effective Date until 12:00 Noon (New York City time) on the
Expiry Date (unless the obligations of the Liquidity Provider shall be earlier
terminated in accordance with the terms of Section 2.04(b)) in an aggregate
amount at any time outstanding not to exceed the Commitment.
Section 2.02 Making the Advances. (a) Interest Advances shall
be made in one or more Borrowings by delivery to the Liquidity Provider of one
or more written and completed Notices of Borrowing in substantially the form
of Annex I attached hereto, signed by a Responsible Officer of the Borrower,
in an amount not exceeding the Available Commitment at such time and shall be
used solely for the payment when due of interest on the Class A Pass Through
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Available Commitment shall be reinstated by
the amount of such repaid Interest Advance; provided, however, that the
Available Commitment shall not be so reinstated at any time if (i) both (x) a
Triggering Event shall have occurred and be continuing and (y) a Performing
Note Deficiency exists or (ii) a Liquidity Event of Default shall have
occurred and be continuing.
(b) A Downgrade Advance shall be made in a single Borrowing upon
a downgrading of the rating of the Liquidity Provider resulting in the
Liquidity Provider's ratings not meeting the Threshold Rating (as provided for
in Section 3.6(c) of the Intercreditor Agreement), unless a Replacement
Liquidity Facility shall have been delivered to the Borrower in accordance
with said Section 3.6(c), by delivery to the Liquidity Provider of a written
and completed Notice of Borrowing in substantially the form of Annex II
attached hereto, signed by a Responsible Officer of the Borrower, in an amount
equal to the Available Commitment at such time, and shall be used to fund the
Class A Cash Account in accordance with said Section 3.6(c).
(c) A Final Advance shall be made by the Liquidity Provider
without the necessity for a Notice of Borrowing at the option of the Liquidity
Provider on the occurrence of an event described in Section 6.01(a) or 6.01(b)
in an amount equal to the Available Commitment at such time, and shall be used
to fund the Class A Cash Account.
(d) Each Borrowing (other than the making of a Final Advance)
shall be made on notice in writing (a "Notice of Borrowing") in substantially
the form required by Section 2.02(a) or 2.02(b), as the case may be, given not
later than 12:00 Noon (New York City time) on the second Business Day prior to
the day of the proposed Borrowing by the Borrower to the Liquidity Provider.
Upon satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall, before 12:00
Noon (New York City time) on the date of such Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing, make
available to the Borrower, in U.S. dollars and in immediately available funds,
the amount of such Borrowing to be paid to the Borrower in accordance with its
payment instructions. If a Notice of Borrowing is delivered by the Borrower
in respect of any Borrowing after 12:00 Noon (New York City time) on a
Business Day, the Liquidity Provider shall, before 12:00 Noon (New York City
time) on the third Business Day next following the day of receipt of such
Notice of Borrowing or on such later Business Day specified by the Borrower in
such Notice of Borrowing, make available to the Borrower, in U.S. dollars and
in immediately available funds, the amount of such Borrowing to be paid to the
Borrower in accordance with its payment instructions. Payments of proceeds of
a Borrowing shall be made by wire transfer of immediately available funds to
the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(e) Upon the making of any Advance requested pursuant to a
Notice of Borrowing, in accordance with the Borrower's payment instructions,
the Liquidity Provider shall be fully discharged of its obligation hereunder
with respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other person (including the
holder of any Class A Pass Through Certificates or the Pass Through Trustee of
the Class A Pass Through Trust) who makes to the Pass Through Trustee of the
Class A Pass Through Trust or the Borrower a demand for payment with respect
to any Class A Pass Through Certificates. By paying to the Borrower proceeds
of Advances requested by the Borrower in accordance with the provisions of
this Agreement, the Liquidity Provider makes no representation as to, and
assumes no responsibility for, the correctness or sufficiency for any purpose
of the amount of the Advances so made and requested.
Section 2.03 Fees. (a) The Borrower agrees to pay to the
Liquidity Provider a fee equal to 0.25% of the Commitment (as in effect on the
Effective Date). Such fee shall be payable on the Effective Date.
(b) The Borrower shall pay, or shall cause to be paid, to the
Liquidity Provider, a fee equal to 0.25% per annum on the average Available
Commitment from the Effective Date to the earlier of the date on which a
Downgrade Advance is made and the date on which the Commitment terminates.
Such fee shall be payable in arrears on each Regular Distribution Date.
Nothing contained in this Section 2.03(b) shall require the Borrower to pay
any amount under this Section 2.03(b) other than to the extent the Borrower
shall have funds available therefor.
Section 2.04 Reduction or Termination of the Commitment. (a)
Automatic Reductions. Promptly following each date on which the Required
Amount is reduced as a result of a reduction in the Pool Balance of the Class
A Pass Through Certificates or otherwise, the Commitment shall automatically
be reduced to an amount equal to such reduced Required Amount (as calculated
by the Borrower). The Borrower shall give notice of any such automatic
reduction of the Commitment (substantially in the form of Annex IV hereto) to
the Liquidity Provider (with a copy to Federal Express Corporation) within two
Business Days thereof. The failure by the Borrower to furnish any such notice
shall not affect such automatic reduction of the Commitment.
(b) Termination. Upon the making of any Downgrade Advance or
Final Advance hereunder or the occurrence of the Termination Date, the
obligation of the Liquidity Provider to make further Advances hereunder shall
automatically and irrevocably terminate, and the Borrower shall not be
entitled to request any further Borrowing hereunder.
Section 2.05 Repayments of Interest Advances or the Final
Advance. Subject to Sections 2.07 and 2.09, the Borrower hereby agrees to
pay, or to cause to be paid, to the Liquidity Provider on each date on which
the Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to (a) the amount of such Interest Advance or the Final Advance
(any such Interest Advance or the Final Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07. Subject to Sections 2.06, 2.07
and 2.09, unless otherwise waived by the Liquidity Provider, the Borrower
shall be obligated, without notice of an Advance or demand for repayment from
the Liquidity Provider (which notice and demand are hereby waived by the
Borrower), to repay the Liquidity Provider for all Interest Advances and Final
Advances on the same day as made and all Applied Downgrade Advances on the
same day they become Applied Downgrade Advances in accordance with Section
2.06 hereof. The Borrower and the Liquidity Provider agree that the repayment
in full of each Interest Advance and the Final Advance on the date such
Interest Advance or the Final Advance is made and each Applied Downgrade
Advance on the date it becomes an Applied Downgrade Advance is intended to be
a contemporaneous exchange for new value given to the Borrower by the
Liquidity Provider.
Section 2.06 Repayments of Downgrade Advances. (a) Amounts
advanced hereunder in respect of a Downgrade Advance shall be deposited in the
Class A Cash Account, and invested and withdrawn from the Class A Cash
Account, as set forth in Sections 3.6(c), (e) and (f) of the Intercreditor
Agreement. The Borrower agrees to pay to the Liquidity Provider, on each
Regular Distribution Date, commencing on the first Regular Distribution Date
after the making of a Downgrade Advance, interest on the principal amount of
any such Downgrade Advance as provided in Section 3.07; provided, however, that
(i) any distribution to the Liquidity Provider of Investment Earnings pursuant
to Section 3.6(f) of the Intercreditor Agreement shall constitute a payment of
interest on such Downgrade Advance in the amount of such Investment Earnings
(not to exceed the amount specified in Section 3.07) and (ii) amounts in
respect of a Downgrade Advance withdrawn from the Class A Cash Account for the
purpose of paying interest on the Class A Pass Through Certificates in
accordance with Section 3.6(f) of the Intercreditor Agreement (the amount of
any such withdrawal being an "Applied Downgrade Advance") shall be treated as
an Interest Advance under this Agreement for purposes of determining the
Applicable Liquidity Rate for interest payable thereon. Immediately upon the
withdrawal of any amounts from the Class A Cash Account on account of a
reduction in the Required Amount, the Borrower shall repay the Downgrade
Advances in a principal amount equal to the amount of such reduction, plus
interest on the principal amount repaid as provided in Section 3.07.
(b) At any time when an Applied Downgrade Advance (or any portion
thereof) is outstanding, upon the deposit in the Class A Cash Account of any
amount pursuant to clause "third" of Section 2.4(b), clause "third" of Section
3.2 or clause "fourth" of Section 3.3 of the Intercreditor Agreement (any such
amount being a "Replenishment Amount") for the purpose of replenishing the
balance thereof up to the Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Downgrade Advances shall be
automatically reduced by the amount of such Replenishment Amount and (ii) the
principal amount of the outstanding Downgrade Advance shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, and prior to the effectiveness of any Replacement
Liquidity Facility, the Borrower agrees that all amounts owing to the
Liquidity Provider shall be repaid in full, whether from advances made by the
Replacement Liquidity Provider, from amounts remaining on deposit in the Class
A Cash Account after giving effect to any application of funds therefrom to
any payment of interest on the Class A Pass Through Certificates on the date
of such replacement, or otherwise.
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement. In order to provide for payment or repayment to the
Liquidity Provider of any amounts hereunder, the Intercreditor Agreement
provides that amounts available and referred to in Articles II and III of the
Intercreditor Agreement, to the extent payable to the Liquidity Provider
pursuant to the terms of the Intercreditor Agreement (including, without
limitation, Section 3.6(f) of the Intercreditor Agreement), shall be paid to
the Liquidity Provider in accordance with the terms thereof. Amounts so paid
to the Liquidity Provider shall be applied by the Liquidity Provider in the
order of priority required by the applicable provisions of Articles II and III
of the Intercreditor Agreement.
Section 2.08 Book Entries. The Liquidity Provider shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time
and the amounts of principal and interest payable hereunder and paid from time
to time in respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09 Payments from Available Funds Only. All payments to
be made by the Borrower under this Agreement shall be made only from amounts
received by it that constitute Scheduled Payments or Special Payments or
amounts payable to it under Article 8, 9 or 10 of any Participation Agreement
and only to the extent that the Borrower shall have sufficient income or
proceeds therefrom to enable the Borrower to make payments in accordance with
the terms hereof after giving effect to the priority of payments provisions set
forth in the Intercreditor Agreement. The Liquidity Provider agrees that it
will look solely to such amounts to the extent available for distribution to
it as provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class A Cash Account shall be available to make
payments only to the extent and for the purposes expressly contemplated in
Section 3.6(f) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs. If the Liquidity Provider shall
determine that (a) any change after the date hereof in any law or regulation
or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof or in the
compliance by the Liquidity Provider (or its head office) with any applicable
direction, request or requirement (whether or not having the force of law) of
any central bank or competent governmental or other authority shall either (i)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets held by, or deposits in or for the account of, or
loans made by, the Liquidity Provider, or (ii) impose on the Liquidity
Provider any other condition regarding this Agreement or any Advance, or (iii)
change the basis of taxation of any amounts payable to the Liquidity Provider
(other than Taxes imposed on the overall net or gross income of the Liquidity
Provider) and (b) the result of any event referred to in the preceding clause
(i), (ii) or (iii) shall be to increase the cost to the Liquidity Provider of
issuing or maintaining its commitment or funding or maintaining Advances
(which increase in cost shall be determined by the Liquidity Provider's
reasonable allocations of the aggregate of such cost increases resulting from
such event), or to reduce the amount of any sum received or receivable by the
Liquidity Provider under this Agreement with respect thereto, then, upon
demand by the Liquidity Provider (such demand to be made not later than 60
days after a Responsible Officer of the Liquidity Provider obtains actual
knowledge of any event referred to in clause (i), (ii) or (iii) above), the
Borrower shall pay, or cause to be paid, to the Liquidity Provider, from time
to time as specified by the Liquidity Provider, additional amounts which shall
be sufficient to compensate the Liquidity Provider for such increased cost or
reduction; provided that if such demand for payment is made after such 60-day
period, the Borrower shall be obligated to pay such additional amounts only
with respect to such increased cost or reduction actually incurred or effected
on or after the 60th day prior to the date of such demand. A certificate as
to such increased cost or reduction (which shall set forth the basis for such
increased cost or reduction) incurred by the Liquidity Provider as a result of
any event mentioned in clause (i), (ii) and (iii) above, prepared in
reasonable detail and submitted by the Liquidity Provider to the Borrower,
shall be conclusive, absent manifest error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.01 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.02 Capital Adequacy. If the Liquidity Provider shall
determine that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its head
office) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, in each case after the date hereof, has the effect of reducing the
rate of return on the Liquidity Provider's capital as a consequence of issuing
or maintaining its commitment hereunder or its funding or maintaining Advances
to a level below that which the Liquidity Provider could have achieved but for
such adoption, change or compliance (taking into consideration the Liquidity
Provider's policies with respect to capital adequacy) by an amount deemed by
the Liquidity Provider to be material, then, upon demand by the Liquidity
Provider, the Borrower shall pay to the Liquidity Provider, from time to time
as specified by the Liquidity Provider, additional amounts which shall be
sufficient to compensate the Liquidity Provider for such reduction in respect
of issuing or maintaining its commitment hereunder or its funding or
maintaining Advances. A certificate as to such additional amount describing
the event which has the effect of reducing the rate of return on the Liquidity
Provider's capital, prepared in reasonable detail and submitted by the
Liquidity Provider to the Borrower, shall be conclusive, absent manifest
error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.02 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.03 Payments Free of Deductions. All payments made by
the Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding any Taxes imposed on the overall
net income of the Liquidity Provider and excluding United States federal income
tax withholding to the extent such withholding is, or would be, actually
imposed upon payments to the Liquidity Provider as of the date of this
Agreement (such non-excluded taxes being referred to herein, collectively, as
"Non-Excluded Taxes" and, individually, as a "Non-Excluded Tax"). If any
Non-Excluded Taxes are required to be withheld from any amounts payable to the
Liquidity Provider under this Agreement, the amounts so payable to the
Liquidity Provider shall be increased to the extent necessary to yield to the
Liquidity Provider (after payment of all Non-Excluded Taxes and taxes imposed
on the receipt of such increase) interest or any other such amounts payable
under this Agreement at the rates or in the amounts specified in this
Agreement. Whenever any Non-Excluded Tax is payable by the Borrower, promptly
thereafter the Borrower shall send the Liquidity Provider certified copies of
tax receipts evidencing such payment by the Borrower. The Liquidity Provider
agrees to provide to the Borrower on or prior to the Effective Date, and from
time to time thereafter after the occurrence of any event requiring a change
in the most recent form previously delivered by it (and prior to the
immediately following due date of any payment by the Borrower hereunder), to
the extent that the Liquidity Provider is legally entitled to do so, two
original Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that the Liquidity Provider is completely exempt from United States
withholding tax on payments pursuant to this Agreement.
The Liquidity Provider agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
change the jurisdiction of its Lending Office if making such change would
avoid the need for, or reduce the amount of, any amount payable under this
Section 3.03 that may thereafter accrue and would not, in the reasonable
judgment of the Liquidity Provider, be otherwise disadvantageous in any
material respect to the Liquidity Provider.
Section 3.04 Payments. The Borrower shall make or cause to be
made each payment to the Liquidity Provider under this Agreement so as to
cause the same to be received by the Liquidity Provider not later than 1:00
P.M. (New York City time) on the day when due. The Borrower shall make all
such payments in lawful money of the United States of America, to the
Liquidity Provider in immediately available funds, by wire transfer to the
office of Citibank, N.A., New York City, for credit to KfW, Account
No.▇▇▇-▇▇▇-▇▇.
Section 3.05 Computations. All computations of interest based on
the Base Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and all computations of (x) interest based on the LIBOR Rate and
(y) fees payable to the Liquidity Provider shall be made on the basis of a
year of 360 days, in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest is payable.
Section 3.06 Payment on Non-Business Days. Whenever any payment
to be made hereunder (other than a payment on LIBOR Advances) becomes due and
payable on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day and interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Advance
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the
result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Business Day.
Section 3.07 Interest. (a) The Borrower shall pay, or shall
cause to be paid, interest on (i) the unpaid principal amount of each Advance
from and including the date of such Advance (or, in the case of an Applied
Downgrade Advance, from and including the date on which the amount thereof was
withdrawn from the Class A Cash Account to pay interest on the Class A Pass
Through Certificates) to but excluding the date such principal amount shall be
paid in full and (ii) any other amount due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by law,
installments of interest on Advances or any such other amount) which is not
paid when due (whether at stated maturity, by acceleration or otherwise) from
and including the due date thereof to but excluding the date such amount is
paid in full, in each such case, at a fluctuating interest rate per annum for
each day equal to the Applicable Liquidity Rate (as defined below) for such
Advance set forth below or such other amount as in effect for such day, but in
no event at a rate per annum greater than the maximum rate permitted by
applicable law; provided, however, that, if at any time the otherwise
applicable interest rate as set forth in this Section 3.07 shall exceed the
maximum rate permitted by applicable law, then any subsequent reduction in
such interest rate will not reduce the rate of interest payable pursuant to
this Section 3.07 below the maximum rate permitted by applicable law until the
total amount of interest accrued equals the amount of interest that would have
accrued if such otherwise applicable interest rate as set forth in this
Section 3.07 had at all times been in effect. Nothing contained in this
Section 3.07 shall require the Borrower to pay any amount under this Section
3.07 other than to the extent the Borrower shall have funds available therefor.
(b) Except as provided in Section 3.07(e), each Advance will be
either a Base Rate Advance or a LIBOR Advance as provided in this Section.
Each such Advance will be a Base Rate Advance for the period from the date of
its borrowing to (but excluding) the third Business Day following the
Liquidity Provider's receipt of the Notice of Borrowing for such Advance.
Thereafter, such Advance shall be a LIBOR Advance.
(c) Each LIBOR Advance shall bear interest during each Interest
Period at a per annum rate equal to the LIBOR Rate for such Interest Period
plus the Applicable Margin for such LIBOR Advance, payable in arrears on the
last day of such Interest Period and, in the event of the payment of principal
of such LIBOR Advance on a day other than such last day, on the date of such
payment (to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a per annum
rate equal to the Base Rate plus the Applicable Margin for such Base Rate
Advance, payable in arrears on each Regular Distribution Date and, in the
event of the payment of principal of such Base Rate Advance on a day other
than a Regular Distribution Date, on the date of such payment (to the extent
of interest accrued on the amount of principal repaid).
(e) Each Downgrade Advance (other than an Applied Downgrade
Advance) shall bear interest during the period from and including the date of
the making of such Downgrade Advance through but excluding the Expiry Date
(or, if earlier, the date of repayment thereof or of conversion thereof into a
Final Advance), in an amount equal to the sum of (i) Investment Earnings on
amounts on deposit in the Class A Cash Account for such period plus (ii) 0.25%
per annum on the amount of such Downgrade Advance, payable in arrears on each
Regular Distribution Date and on the date of repayment thereof or conversion
thereof into a Final Advance.
(f) Each amount not paid when due hereunder (whether fees,
commissions, expenses or other amounts or, to the extent permitted by
applicable law, installments of interest on Advances) shall bear interest at
the Base Rate plus 1.00% per annum.
(g) Each change in the Base Rate shall become effective
immediately. The rates of interest specified in this Section 3.07 with
respect to any Advance or other amount shall be referred to as the "Applicable
Liquidity Rate."
Section 3.08 Replacement of Borrower. Subject to Section
5.02(b), from time to time, upon the effective date and time specified in a
written and completed Notice of Replacement Borrower in substantially the form
of Annex III attached hereto (a "Notice of Replacement Borrower") delivered to
the Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09 Funding Loss Indemnification. The Borrower shall
pay to the Liquidity Provider, upon the request of the Liquidity Provider,
such amount or amounts as shall be sufficient (in the reasonable opinion of
the Liquidity Provider) to compensate it for any loss, cost, or expense
incurred as a result of:
(a) Any payment or prepayment of a LIBOR Advance on a date other
than the last day of the Interest Period for such Advance;
(b) Any failure by the Borrower to borrow or convert, as the
case may be, a LIBOR Advance on the date for borrowing or conversion, as
the case may be, specified in the relevant notice under Section 2.02 or
3.07; or
(c) Any conversion of a LIBOR Advance to a Base Rate Advance
other than on the last day of the Interest Period for such Advance.
Section 3.10 Illegality. Notwithstanding any other provision in
this Agreement, if any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Liquidity Provider (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for the Liquidity Provider (or its Lending Office) to
maintain or fund its LIBOR Advances, then upon notice to the Borrower by the
Liquidity Provider, the outstanding principal amount of the LIBOR Advances
shall be converted to Base Rate Advances (a) immediately upon demand of the
Liquidity Provider, if such change or compliance with such request, in the
judgment of the Liquidity Provider, requires immediate repayment; or (b) at
the expiration of the last Interest Period to expire before the effective date
of any such change or request. In the event any change of the nature
described in the preceding sentence shall make it unlawful or impossible for
the Liquidity Provider (or its Lending Office) to maintain or fund its Base
Rate Advances, the Liquidity Provider shall have the right to cause a
Replacement Liquidity Facility to be substituted for this Agreement, subject
to (i) the satisfaction of the conditions precedent to the effectiveness of,
and the other provisions regarding, a Replacement Liquidity Facility set forth
in Section 3.6(e) of the Intercreditor Agreement and (ii) such Replacement
Liquidity Facility and Replacement Liquidity Provider being reasonably
acceptable to Federal Express Corporation.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section
2.01. Section 2.01 of this Agreement shall become effective on and as of the
first date (the "Effective Date") on which the following conditions precedent
have been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, each dated such date (except for
those documents delivered pursuant to paragraphs (v) and (vii) of this
Section 4.01(a)), and each in form and substance satisfactory to the
Liquidity Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Counterparts (or certified copies thereof) of each of
the Operative Agreements (other than this Agreement and the
Intercreditor Agreement) which, when taken together, bear the
signatures of all of the respective parties thereto and which are
in full force and effect in accordance with their respective terms;
(iv) A copy of the Prospectus and specimen copies of the
Class A Pass Through Certificates;
(v) Evidence that, on the Effective Date, the Class A Pass
Through Certificates, the Class B Pass Through Certificates and
the Class C Pass Through Certificates will receive long-term
credit ratings from ▇▇▇▇▇'▇ of not lower than Aa2, A1 and Baa1,
respectively, and from Standard & Poor's of not lower than AAA, AA
and BBB+, respectively;
(vi) An executed or certified copy of each document,
instrument, certificate and opinion delivered pursuant to the
Class A Supplement, the Intercreditor Agreement, the Participation
Agreements and the other Operative Agreements (together with, in
the case of each such opinion (unless such opinion is addressed to
the Liquidity Provider), other than the opinion of counsel for the
Underwriters, a letter from the counsel rendering such opinion to
the effect that the Liquidity Provider is entitled to rely on such
opinion as if it were addressed to the Liquidity Provider);
(vii) Evidence that there shall have been made and shall be
in full force and effect, all filings, recordings and/or
registrations, and there shall have been given or taken any notice
or other similar action as may be reasonably necessary or, to the
extent reasonably requested by the Liquidity Provider, reasonably
advisable, in order to establish, perfect, protect and preserve
the right, title and interest, remedies, powers, privileges, liens
and security interests of, or for the benefit of, the Pass Through
Trustee and the Liquidity Provider created by the Operative
Agreements;
(viii) Copies of the appraisals attached as exhibits to the
Prospectus; and
(ix) A letter from Federal Express Corporation agreeing to
provide to the Liquidity Provider the periodic financial reports
referred to in Section 4.03 of the Pass Through Agreements; and
(x) Such other documents, instruments, opinions and
approvals (and, if requested by the Liquidity Provider, certified
duplicates or executed copies thereof) as the Liquidity Provider
shall have reasonably requested.
(b) The following statements shall be true and shall be deemed
to have been represented by each party (other than clause (ii) below,
which shall be deemed to have been represented only by Federal Express
Corporation) on and as of the Effective Date:
(i) The representations and warranties of such Person
contained in each Participation Agreement are true and correct on
and as of the Effective Date as though made on and as of the
Effective Date; and
(ii) No event has occurred and is continuing, or would
result from the entering into of this Agreement or the making of
any Advance, which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full
of all fees and other sums required to be paid to or for the account of
the Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Pass Through
Certificates under the Pass Through Agreements shall have been
satisfied, all conditions precedent to the effectiveness of the other
Liquidity Facilities shall have been satisfied, and all conditions
precedent to the purchase of the Pass Through Certificates by the
Underwriters under the Underwriting Agreement shall have been satisfied
(except for any of such conditions precedent under the Underwriting
Agreement that shall have been waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the
date hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness
of Section 2.01 have been satisfied or waived (other than this Section
4.01(e)).
Section 4.02 Conditions Precedent to Borrowing. The obligation
of the Liquidity Provider to make an Advance on the occasion of each Borrowing
shall be subject to the conditions precedent that the Effective Date shall
have occurred and, except in the case of a Final Advance, prior to the date of
such Borrowing, the Borrower shall have delivered a Notice of Borrowing which
conforms to the terms and conditions of this Agreement and has been completed
as may be required by the relevant form of the Notice of Borrowing for the
type of Advance requested.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower. So long as
any Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or
cause to be paid all amounts payable by it under this Agreement and the
other Operative Agreements and observe and perform in all material
respects the conditions, covenants and requirements applicable to it
contained in this Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider
with reasonable promptness, such other information and data with respect
to the transactions contemplated by the Operative Agreements as from
time to time may be reasonably requested by the Liquidity Provider; and
permit the Liquidity Provider, upon reasonable notice, to inspect the
Borrower's books and records with respect to such transactions and to
meet with officers and employees of the Borrower to discuss such
transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity
Provider with reasonable promptness any Operative Agreement (but not
including the Tax Indemnity Agreement as defined in the Participation
Agreement) entered into after the date hereof.
Section 5.02 Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will not, without the
written consent of the Liquidity Provider (such consent not to be unreasonably
withheld):
(a) Amendments. Modify, amend or supplement, or give any
consent to any modification, amendment or supplement or make any waiver
with respect to, any provision of the Pass Through Agreements, except
for any supplemental agreement to the Pass Through Agreements provided
for in Section 11.01 thereof.
(b) Borrower. Appoint or permit or suffer to be appointed any
successor Borrower.
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance. If (a) both (i) a Triggering Event
shall have occurred and be continuing and (ii) a Performing Note Deficiency
exists or (b) a Liquidity Event of Default shall have occurred and be
continuing, the Liquidity Provider may, in its discretion, make a Final
Advance whereupon (i) the Liquidity Provider shall have no further obligation
to make Advances hereunder, (ii) all other outstanding Advances shall be
automatically converted into Final Advances for purposes of determining the
Applicable Liquidity Rate for interest payable thereon, and (iii) subject to
Sections 2.07 and 2.09, all Advances, any accrued interest thereon and any
other amounts outstanding hereunder shall become immediately due and payable
to the Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Liquidity Provider, and, in the case of an amendment, the
Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 7.02 Notices, Etc. Except as otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be in writing (including telecopier and mailed or delivered or sent by
telecopier):
Borrower: First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Liquidity
Provider: Kreditanstalt fur ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇-▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attention: Head of Aircraft
Finance Department K111 b 3
Telephone: ▇▇▇-▇▇-▇▇-▇▇▇▇-▇
Telecopy: 011-49-69-7431-2944
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when
deposited in the mails addressed as specified above, and (iii) if given by
other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either party
shall in addition be delivered to each of the parties to the Participation
Agreements at their respective addresses set forth therein.
Section 7.03 No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.04 Further Assurances. The Borrower agrees to do, upon
request, such further acts and things and to execute and deliver to the
Liquidity Provider such additional assignments, agreements, powers and
instruments as the Liquidity Provider may reasonably require or deem advisable
to carry into effect the purposes of this Agreement and the other Operative
Agreements or to better assure and confirm unto the Liquidity Provider its
rights, powers and remedies hereunder and under the other Operative Agreements.
Section 7.05 Indemnification; Survival of Certain Provisions.
The Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Articles 8 and 9 of the Participation Agreements. In
addition, the Borrower agrees to indemnify, protect, defend and hold harmless
the Liquidity Provider from, against and in respect of, and shall pay on
demand, all Expenses of any kind or nature whatsoever, whether arising before,
on or after the date hereof, that may be imposed, incurred by or asserted
against any Liquidity Indemnitee, in any way relating to, resulting from, or
arising out of or in connection with, this Agreement, the Intercreditor
Agreement or the Participation Agreements; provided, however, that the
Borrower shall not be required to indemnify, protect, defend and hold harmless
any Liquidity Indemnitee in respect of any Expense of such Liquidity
Indemnitee (i) to the extent such Expense is attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any Related
Indemnitee, (ii) that is ordinary and usual operating overhead expense or
(iii) to the extent such Expense is attributable to the failure by such
Liquidity Indemnitee or its Related Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in
any Operative Agreement. The indemnities contained in Articles 8 and 9 of the
Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07, shall survive the termination of this Agreement.
Section 7.06 Liability of the Liquidity Provider. (a) Neither
the Liquidity Provider nor any of its officers or directors shall be liable or
responsible for: (i) the use which may be made of the Advances or any acts or
omissions of the Borrower or any beneficiary or transferee in connection
therewith; (ii) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; or (iii) the making
of Advances by the Liquidity Provider against delivery of a Notice of
Borrowing and other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against the Liquidity
Provider, and the Liquidity Provider shall be liable to the Borrower, to the
extent of any damages suffered by the Borrower which were the result of (A)
the Liquidity Provider's willful misconduct or gross negligence in determining
whether documents presented hereunder comply with the terms hereof, or (B) any
breach by the Liquidity Provider of any of the terms of this Agreement,
including, but not limited to, the Liquidity Provider's failure to make lawful
payment hereunder after the delivery to it by the Borrower of a Notice of
Borrowing strictly complying with the terms and conditions hereof.
(b) The Liquidity Provider shall not be liable or responsible in
any respect for (i) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with this Agreement or any Notice of Borrowing
delivered hereunder, or (ii) any action, inaction or omission which may be
taken by it in good faith, absent willful misconduct or gross negligence (in
which event the extent of the Liquidity Provider's potential liability to the
Borrower shall be limited as set forth in the immediately preceding
paragraph), in connection with this Agreement or any Notice of Borrowing.
Section 7.07 Costs, Expenses and Taxes. The Borrower agrees to
pay, or cause to be paid (A) on the Effective Date and on such later date or
dates on which the Liquidity Provider shall make demand, all reasonable
out-of-pocket costs and expenses of the Liquidity Provider in connection with
the preparation, negotiation, execution, delivery, filing and recording of
this Agreement, any other Operative Agreement and any other documents which
may be delivered in connection with this Agreement, including, without
limitation, the reasonable fees and expenses of outside counsel for the
Liquidity Provider and (B) on demand, all reasonable costs and expenses of the
Liquidity Provider (including reasonable counsel fees and expenses) in
connection with (i) the enforcement of this Agreement or any other Operative
Agreement, (ii) the modification or amendment of, or supplement to, this
Agreement or any other Operative Agreement or such other documents which may be
delivered in connection herewith or therewith (whether or not the same shall
become effective) or (iii) any action or proceeding relating to any order,
injunction, or other process or decree restraining or seeking to restrain the
Liquidity Provider from paying any amount under this Agreement, the
Intercreditor Agreement or any other Operative Agreement or otherwise
affecting the application of funds in the Cash Accounts. In addition, the
Borrower shall pay any and all recording, stamp and other similar taxes and
fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement, any other Operative
Agreement and such other documents, and agrees to save the Liquidity Provider
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
Section 7.08 Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the
Liquidity Provider and their respective successors and assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor the Borrower shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the other party,
subject to the requirement of Section 7.08(b). The Liquidity Provider may
grant participations herein or in any of its rights or security hereunder and
under the other Operative Agreements to such Persons as the Liquidity Provider
may in its sole discretion select, subject to the requirement of Section
7.08(b). No such participation by the Liquidity Provider, however, will
relieve the Liquidity Provider of its obligations hereunder. In connection
with any participation or any proposed participation, the Liquidity Provider
may disclose to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and agrees
that the Liquidity Provider's source of funds may derive in part from its
participants. Accordingly, references in this Agreement and the other
Operative Agreements to determinations, reserve and capital adequacy
requirements, increased costs, reduced receipts and the like as they pertain
to the Liquidity Provider shall be deemed also to include those of each of its
participants (subject, in each case, to the maximum amount that would have
been incurred by or attributable to the Liquidity Provider directly if the
Liquidity Provider had not participated the interest).
(b) If, pursuant to subsection (a) above, the Liquidity Provider
sells any participation to any bank or other entity (each, a "Participant"),
then, concurrently with the effectiveness of such participation, the
Participant shall (i) represent to the Liquidity Provider (for the benefit of
the Liquidity Provider and the Borrower) either (A) that it is incorporated
under the laws of the United States or a state thereof or (B) that under
applicable law and treaties, no taxes will be required to be withheld by the
Borrower or the Liquidity Provider with respect to any payments to be made to
such Participant in respect of this Agreement, (ii) furnish to the Liquidity
Provider and the Borrower either (x) a statement that it is incorporated under
the laws of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States Internal
Revenue Service Form 4224 or Form 1001, as appropriate, or other applicable
form, certificate or document prescribed by the Internal Revenue Service
certifying, in each case, such Participant's entitlement to a complete
exemption from United States federal withholding tax in respect to any and all
payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the
date that any such form expires or becomes obsolete or (B) after the
occurrence of any event requiring a change in the most recent form previously
delivered by it and prior to the immediately following due date of any payment
by the Borrower hereunder, certifying in the case of a Form 1001 or Form 4224
that such Participant is entitled to a complete exemption from United States
federal withholding tax on payments under this Agreement. Unless the Borrower
has received forms or other documents reasonably satisfactory to it indicating
that payments hereunder are not subject to United States federal withholding
tax, the Borrower will withhold taxes as required by law from such payments at
the applicable statutory rate without any obligation to gross-up or indemnify
pursuant to Section 3.03.
(c) Notwithstanding the other provisions of this Section 7.08,
the Liquidity Provider may assign and pledge all or any portion of the
Advances owing to it to any Federal Reserve Bank or the United States Treasury
as collateral security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Advances
made by the Borrower to the Liquidity Provider in accordance with the terms of
this Agreement shall satisfy the Borrower's obligations hereunder in respect
of such assigned Advance to the extent of such payment. No such assignment
shall release the Liquidity Provider from its obligations hereunder.
Section 7.09 Severability. Any provision of this Agreement which
is prohibited, unenforceable or not authorized in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial.
(a) Each of the parties hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement,
or for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) if such party does not maintain an office for the
transaction of its business in New York, agrees that service of process
in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to each party hereto at its address set
forth in Section 7.02, or at such other address of which the Liquidity
Provider shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and statutory claims.
The Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER CANNOT BE MODIFIED ORALLY.
(c) The Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States or of any State
and waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgment entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
Section 7.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13 Entirety. This Agreement and the other Operative
Agreements constitute the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof and supersede all prior
understandings and agreements of such parties.
Section 7.14 Headings; Section References. Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose. Unless the
context otherwise requires or otherwise indicated herein, all Section
references in this Agreement are references to Sections hereof.
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE
LIQUIDITY PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO
DELIVER NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL
BE UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first set forth above.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
------------------------------------
Name:
Title:
KREDITANSTALT FUR WIEDERAUFBAU,
as Liquidity Provider
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
Annex I to Irrevocable
Revolving Credit Agreement
--------------------------
INTEREST ADVANCE NOTICE OF BORROWING
First Security Bank, National Association, acting not in its
individual capacity but solely as Subordination Agent, as borrower (the
"Borrower"), hereby certifies to Kreditanstalt fur Wiederaufbau, (the
"Liquidity Provider"), with reference to the Irrevocable Revolving Credit
Agreement Class A Pass Through Certificates dated as of June 15, 1998, between
the Borrower and the Liquidity Provider (the "Liquidity Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used for
the payment of interest on the Class A Pass Through Certificates which
was payable on the Distribution Date falling on __________ in accordance
with the terms and provisions of the Class A Supplement and the Class A
Pass Through Certificates and has not been paid pursuant to clause
fourth of Section 3.2 of the Intercreditor Agreement or clause sixth of
Section 3.3 of the Intercreditor Agreement, which Advance is requested
to be made on ___________________.
(3) The amount of the Interest Advance requested hereby (i) is
$________, to be applied in respect of the payment of
interest which was due and payable on the Class A Pass Through
Certificates on such Distribution Date, (ii) does not include any amount
with respect to the payment of principal of, or premium on, the Class A
Pass Through Certificates, the Class B Pass Through Certificates or the
Class C Pass Through Certificates, or interest on the Class B Pass
Through Certificates or the Class C Pass Through Certificates, (iii) was
computed in accordance with the provisions of the Class A Pass Through
Certificates, the Class A Supplement and the Intercreditor Agreement (a
copy of which computation is attached hereto as Schedule I), (iv) does
not exceed the Available Commitment on the date hereof, and (v) has not
been and is not the subject of a prior or contemporaneous Notice of
Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance
with the terms of Sections 3.2 or 3.3 of the Intercreditor Agreement, as
the case may be, (b) no portion of such amount shall be applied by the
Borrower for any other purpose and (c) no portion of such amount until
so applied shall be commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested
hereby be a Base Rate Advance and that such Base Rate Advance be
converted into a LIBOR Rate Advance on the third Business Day following
your receipt of this notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Available Commitment by an
amount equal to the amount of the Interest Advance requested to be made hereby
as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the __ day of ______________, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
------------------------------------
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to Irrevocable
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
FIRST SECURITY BANK, NATIONAL ASSOCIATION, acting not in its
individual capacity but solely as Subordination Agent, as borrower (the
"Borrower"), hereby certifies to Kreditanstalt fur Wiederaufbau (the
"Liquidity Provider"), with reference to the Irrevocable Revolving Credit
Agreement Class A Pass Through Certificates dated as of June 15, 1998, between
the Borrower and the Liquidity Provider (the "Liquidity Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined or referenced), that:
(1) The Borrower is the Subordination Agent under the
Intercreditor Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Downgrade Advance by the Liquidity Provider to be used for
the funding of the Class A Cash Account in accordance with Section
3.6(c) of the Intercreditor Agreement by reason of the downgrading of
the debt rating of the Liquidity Provider issued by either Rating Agency
below the applicable Threshold Rating, which Advance is requested to be
made on ____________.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_____, which equals the Available Commitment on the date hereof and is
to be applied in respect of the funding of the Class A Cash Account in
accordance with Section 3.6(c) of the Intercreditor Agreement, (ii) does
not include any amount with respect to the payment of the principal of,
or premium on, the Class A Pass Through Certificates, or principal of,
or interest or premium on, the Class B Pass Through Certificates or the
Class C Pass Through Certificates, (iii) was computed in accordance with
the provisions of the Class A Pass Through Certificates, the Class A
Supplement and the Intercreditor Agreement (a copy of which computation
is attached hereto as Schedule I), and (iv) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class
A Cash Account and apply the same in accordance with the terms of
Section 3.6(c) of the Intercreditor Agreement, (b) no portion of such
amount shall be applied by the Borrower for any other purpose and (c) no
portion of such amount until so applied shall be commingled with other
funds held by the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of
the Liquidity Provider to make further Advances under the Liquidity Agreement;
and (B) following the making by the Liquidity Provider of the Downgrade
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Borrowing as of the __ day of ______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Subordination Agent, as Borrower
By:
--------------------------------------
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex III to Irrevocable
Revolving Credit Agreement
NOTICE OF REPLACEMENT BORROWER
[Date]
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
[Name of Transferee]
[Address of Transferee]
all rights of the undersigned as Borrower under the Liquidity Agreement
referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement.
By this transfer, all rights of the undersigned as Borrower under
the Liquidity Agreement are transferred to the transferee and the transferee
shall hereafter have the sole rights as Borrower thereunder. The undersigned
shall pay any costs and expenses of such transfer, including, but not limited
to, transfer taxes or governmental charges.
We ask that this transfer be effective as of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
--------------------------------------
Name:
Title:
Annex IV Irrevocable
Revolving Credit Agreement
NOTICE OF AUTOMATIC REDUCTION OF COMMITMENT
[Date]
Ladies and Gentlemen:
The undersigned, duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby notifies Kreditanstalt fur
Wiederaufbau (the "Liquidity Provider"), with reference to the Irrevocable
Revolving Credit Agreement Class A Pass Through Certificates dated as of June
15, 1998, between the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined or referenced), that, pursuant to Section
2.04(a) of the Liquidity Agreement, the Commitment has been automatically
reduced to $____________.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Automatic Reduction of Commitment as of the ___day of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:
--------------------------------------
Name:
Title:
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS B PASS THROUGH CERTIFICATES
Dated as of June 15, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Subordination Agent,
as agent and trustee for the
Federal Express Corporation 1998-1-B Pass Through Trust,
as Borrower
and
KREDITANSTALT FUR WIEDERAUFBAU
as Liquidity Provider
Relating to
Federal Express Corporation 1998-1-B Pass Through Trust
6.845% Federal Express Corporation Pass Through Certificates,
Series 1998-1
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms....................................1
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances.............................................7
Section 2.02 Making the Advances......................................7
Section 2.03 Fees.....................................................9
Section 2.04 Reduction or Termination of the Commitment...............9
Section 2.05 Repayments of Interest Advances or the Final Advance.....9
Section 2.06 Repayments of Downgrade Advances........................10
Section 2.07 Payments to the Liquidity Provider Under the
Intercreditor Agreement.................................11
Section 2.08 Book Entries............................................11
Section 2.09 Payments from Available Funds Only......................11
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs.........................................12
Section 3.02 Capital Adequacy........................................13
Section 3.03 Payments Free of Deductions.............................13
Section 3.04 Payments................................................14
Section 3.05 Computations............................................14
Section 3.06 Payment on Non-Business Days............................14
Section 3.07 Interest................................................15
Section 3.08 Replacement of Borrower.................................16
Section 3.09 Funding Loss Indemnification............................16
Section 3.10 Illegality..............................................16
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01...17
Section 4.02 Conditions Precedent to Borrowing.......................19
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower...................20
Section 5.02 Negative Covenants of the Borrower......................20
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance...........................................21
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc.........................................21
Section 7.02 Notices, Etc............................................21
Section 7.03 No Waiver; Remedies.....................................22
Section 7.04 Further Assurances......................................22
Section 7.05 Indemnification; Survival of Certain Provisions.........22
Section 7.06 Liability of the Liquidity Provider.....................23
Section 7.07 Costs, Expenses and Taxes...............................23
Section 7.08 Binding Effect; Participations..........................24
Section 7.09 Severability............................................25
Section 7.10 GOVERNING LAW...........................................25
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial........25
Section 7.12 Execution in Counterparts...............................27
Section 7.13 Entirety................................................27
Section 7.14 Headings; Section References............................27
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES........27
ANNEX I - Interest Advance Notice of Borrowing
ANNEX II - Downgrade Advance Notice of Borrowing
ANNEX III - Notice of Replacement Borrower
ANNEX IV - Notice of Automatic Reduction of Commitment
IRREVOCABLE REVOLVING CREDIT AGREEMENT
CLASS B PASS THROUGH CERTIFICATES
IRREVOCABLE REVOLVING CREDIT AGREEMENT, CLASS B PASS THROUGH
CERTIFICATES dated as of June 15, 1998 between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Subordination Agent under the Intercreditor Agreement (each as
defined below), as agent and trustee for the Class B Pass Through Trust (as
defined below) (the "Borrower"), and KREDITANSTALT FUR WIEDERAUFBAU, a
corporation organized under the public law of the Republic of Germany ("KfW"
or the "Liquidity Provider").
W I T N E S S E T H:
WHEREAS, pursuant to the Class B Supplement (such term and all other
capitalized terms used in these recitals having the meanings set forth or
referred to in Section 1.01), the Class B Pass Through Trust is issuing the
Class B Pass Through Certificates; and
WHEREAS, the Borrower, in order to support the timely payment of a
portion of the interest on the Class B Pass Through Certificates in accordance
with their terms, has requested the Liquidity Provider to enter into this
Agreement, providing in part for the Borrower to request in specified
circumstances that Advances be made hereunder.
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. (a) Definitions. As used in this
Agreement and unless otherwise expressly indicated, or unless the context
clearly requires otherwise, the following capitalized terms shall have the
following respective meanings for all purposes of this Agreement:
"Advance" means an Interest Advance, a Final Advance, a Downgrade
Advance or an Applied Downgrade Advance.
"Applicable Liquidity Rate" means the rates of interest specified in
Section 3.07(g) with respect to any Advance or any other amount.
"Applicable Margin" means, with respect to any Advance, 1.25% (125
basis points) per annum.
"Applied Downgrade Advance" has the meaning assigned to such term in
Section 2.06(a).
"Available Commitment" means, at any time of determination, an
amount equal to (i) the Commitment at such time less (ii) subject to the
third sentence of Section 2.02(a), the aggregate amount of each Advance
outstanding at such time; provided that following a Downgrade Advance or a
Final Advance, the Available Commitment shall be zero.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to (a)
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business Day,
for the preceding Business Day) by the Federal Reserve Bank of New York,
or if such rate is not so published for any day that is a Business Day,
the average of the quotations for such day for such transactions received
by the Liquidity Provider from three Federal funds brokers of recognized
standing selected by it, plus (b) one-quarter of 1 percent (0.25%).
"Base Rate Advance" means an Advance that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning assigned to such term in the recital of
parties to this Agreement.
"Borrowing" means the making of Advances requested by delivery of a
Notice of Borrowing or pursuant to Section 6.01.
"Business Day" means any day other than a Saturday or Sunday or a
day on which commercial banks are required or authorized to close in
Memphis, Tennessee, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or, so long as
any Class B Pass Through Certificates are outstanding, the city and state
in which the Pass Through Trustee of the Class B Pass Through Trust
maintains its Corporate Trust Office or receives or disburses funds, and,
if the applicable Business Day relates to any Advance or other amount
bearing interest based on the LIBOR Rate, on which dealings in U.S.
dollars are carried on in the London interbank market (a "London Business
Day"); provided, however, that if the day in question relates to the
effectiveness of the LIBOR Rate, Business Day shall mean a London Business
Day on which commercial banks are not required or authorized to close in
New York, New York.
"Calculation Agent" means the Liquidity Provider.
"Commitment" means, initially, $18,610,051, as the same may be
reduced from time to time in accordance with Section 2.04(a).
"Downgrade Advance" means an Advance made pursuant to Section
2.02(b).
"Effective Date" has the meaning specified in Section 4.01. The
delivery of the certificate of the Liquidity Provider contemplated by
Section 4.01(e) shall be conclusive evidence that the Effective Date has
occurred.
"Expenses" means liabilities, obligations, damages, settlements,
penalties, claims, actions, suits, costs, expenses and disbursements
(including, without limitation, reasonable fees and disbursements of legal
counsel and costs of investigation), provided that Expenses shall not
include any Taxes.
"Expiry Date" means July 30, 2020.
"Final Advance" means an Advance made pursuant to Sections 2.02(c)
and 6.01.
"Intercreditor Agreement" means the Intercreditor Agreement dated
the date hereof, among the Pass Through Trustee, the Liquidity Provider,
the liquidity provider under each Liquidity Facility (other than this
Agreement) and the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
its terms.
"Interest Advance" means an Advance made pursuant to Section
2.02(a).
"Interest Period" means, with respect to any LIBOR Advance, each of
the following periods:
(i) the period beginning on the date such LIBOR Advance is
made (or is converted from a Base Rate Advance) and ending on the
next Regular Distribution Date; and
(ii) each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the next Regular
Distribution Date;
provided, however, that if (x) the Final Advance shall have been made, or (y)
other outstanding Advances shall have been converted into the Final Advance,
then the Interest Periods shall be successive periods of one month beginning
on the third Business Day following the Liquidity Provider's making of such
Final Advance (in the cause of clause (x) above) or the Regular Distribution
Date following such conversion (in the case of clause (y) above).
"Lending Office" means the lending office of the Liquidity Provider,
presently located at Frankfurt, Germany, or such other lending office as
the Liquidity Provider from time to time shall notify the Borrower as its
lending office hereunder.
"LIBOR Advance" means an Advance bearing interest at a rate based
upon the LIBOR Rate.
"LIBOR Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to close in
New York, New York or London, England.
"LIBOR Rate" means, with respect to any Interest Period, the
interest rate per annum (calculated on the basis of a 360-day year and
actual days elapsed) at which deposits in United States dollars are
offered to prime banks in the London interbank market as indicated on
display page 3750 (British Bankers Association-LIBOR) of the Dow ▇▇▇▇▇
Markets Service (or such other page as may replace such display page 3750
for the purpose of displaying London interbank offered rates for United
States dollar deposits) or, if not so indicated, the average (rounded
upwards to the nearest 1/100%), as determined by the Calculation Agent, of
such rates as indicated on the Reuters Screen LIBO Page (or such other
page as may replace such Reuters Screen LIBO Page for the purpose of
displaying London interbank offered rates for United States dollar
deposits) or, if neither such alternative is indicated, the average
(rounded upwards to the nearest 1/100%), as determined by the Calculation
Agent, of such rates offered by the London Reference Banks to prime banks
in the London interbank market, in each case at or about 11:00 a.m.
(London time) on the day two LIBOR Business Days prior to the first day of
such Interest Period for deposits of a duration equal to such Interest
Period (or such other period most nearly corresponding to such period) in
an amount substantially equal to the principal amount of the applicable
LIBOR Advance as of the first day of such Interest Period. The
Calculation Agent will, if necessary, request that each of the London
Reference Banks provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the average of the quotations
(rounded upwards to the nearest 1/100%). If no such quotation can be
obtained, the rate will be LIBOR for the immediately preceding Interest
Period.
"Liquidity Event of Default" means the occurrence of the following:
all of the Equipment Trust Certificates shall have been either declared to
be immediately due and payable or shall not have been paid at their final
maturity. Notwithstanding the foregoing, a Liquidity Event of Default
shall not occur upon an automatic acceleration of the Equipment Trust
Certificates as a result of a Federal Express Corporation Bankruptcy
Event.
"Liquidity Indemnitee" means (i) the Liquidity Provider, (ii) each
affiliate of the Liquidity Provider, (iii) the respective directors,
officers, employees, agents and servants of the Liquidity Provider and its
affiliates, and (iv) the successors and permitted assigns of the persons
described in clauses (i) through (iii), inclusive.
"Liquidity Provider" has the meaning assigned to such term in the
recital of parties to this Agreement.
"London Reference Banks" means the principal London offices of
National Westminster Bank Plc, Barclays Bank Plc and Bayrische Landesbank
Girozentrale, or such other bank or banks as may from time to time be
agreed to by Federal Express Corporation and the Calculation Agent.
"Non-Excluded Tax" has the meaning specified in Section 3.03.
"Notice of Borrowing" has the meaning specified in Section 2.02(d).
"Notice of Replacement Borrower" has the meaning specified in
Section 3.08.
"Participant" has the meaning assigned to such term in Section
7.08(b).
"Performing Note Deficiency" means any time that less than 65% of
the then aggregate outstanding principal amount of all Equipment Trust
Certificates are Performing Equipment Trust Certificates.
"Prospectus" means the basic prospectus included in the registration
statement on Form S-3 (File No. 333-49411) filed by Federal Express
Corporation relating to certain pass through certificates, as supplemented
by the prospectus supplement dated June 30, 1998 reflecting the terms of
the Pass Through Certificates, as such Prospectus may be amended or
supplemented.
"Related Indemnitee" means, with respect to any Liquidity
Indemnitee, its director, officer, employee, agent, affiliate or employer.
"Replenishment Amount" has the meaning assigned to such term in
Section 2.06(b).
"Required Amount" means, for any day, the sum of the aggregate
amount of interest, calculated at the rate per annum equal to the Stated
Interest Rate for the Class B Pass Through Certificates, that would be
payable on the Class B Pass Through Certificates on each of the three
successive semiannual Regular Distribution Dates immediately following
such day or, if such day is a Regular Distribution Date, on such day and
the succeeding two semiannual Regular Distribution Dates, in each case
calculated on the basis of the Pool Balance of the Class B Pass Through
Certificates on such day and without regard to expected future payments of
principal on the Class B Pass Through Certificates.
"Termination Date" means the earliest to occur of the following:
(i) the Expiry Date; (ii) the date on which the Borrower delivers to the
Liquidity Provider a certificate, signed by a Responsible Officer of the
Borrower, certifying that all of the Class B Pass Through Certificates
have been paid in full (or provision has been made for such payment in
accordance with the Intercreditor Agreement and the Pass Through
Agreements) or are otherwise no longer entitled to the benefits of this
Agreement; (iii) the date on which the Borrower delivers to the Liquidity
Provider a certificate, signed by a Responsible Officer of the Borrower,
certifying that a Replacement Liquidity Facility has been substituted for
this Agreement in full pursuant to Section 3.6(e) of the Intercreditor
Agreement; (iv) the date on which the Liquidity Provider makes the Final
Advance; and (v) the date on which no Advance is or may (including by
reason of reinstatement as herein provided) become available for a
Borrowing hereunder.
"Unpaid Advance" has the meaning assigned to such term in Section
2.05.
(b) Terms Defined in the Intercreditor Agreement. For all purposes of
this Agreement, the following terms shall have the respective meanings
assigned to such terms in the Intercreditor Agreement:
"Class A Pass Through Certificates", "Class B Cash Account", "Class
B Pass Through Certificateholders", "Class B Pass Through Certificates",
"Class B Pass Through Trust", "Class B Supplement", "Class C Pass Through
Certificates", "Closing Date", "Controlling Party", "Corporate Trust
Office", "Distribution Date", "Equipment Trust Certificates", "Federal
Express Corporation", "Federal Express Corporation Bankruptcy Event",
"Indenture", "Investment Earnings", "Liquidity Facility", "▇▇▇▇▇'▇",
"Operative Agreements", "Participation Agreements", "Pass Through
Agreement", "Pass Through Certificate", "Pass Through Trustee",
"Performing Equipment Trust Certificates", "Person", "Pool Balance",
"Rating Agency", "Regular Distribution Dates", "Replacement Liquidity
Facility", "Responsible Officer", "Scheduled Payment", "Special Payment",
"Standard & Poor's", "Stated Interest Rate", "Subordination Agent",
"Taxes", "Threshold Rating", "Triggering Event", "Underwriters",
"Underwriting Agreement" and "Written Notice".
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENT
Section 2.01 The Advances. The Liquidity Provider hereby irrevocably
agrees, on the terms and conditions hereinafter set forth, to make Advances to
the Borrower from time to time on any Business Day during the period from the
Effective Date until 12:00 Noon (New York City time) on the Expiry Date
(unless the obligations of the Liquidity Provider shall be earlier terminated
in accordance with the terms of Section 2.04(b)) in an aggregate amount at any
time outstanding not to exceed the Commitment.
Section 2.02 Making the Advances. (a) Interest Advances shall be
made in one or more Borrowings by delivery to the Liquidity Provider of one or
more written and completed Notices of Borrowing in substantially the form of
Annex I attached hereto, signed by a Responsible Officer of the Borrower, in
an amount not exceeding the Available Commitment at such time and shall be
used solely for the payment when due of interest on the Class B Pass Through
Certificates at the Stated Interest Rate therefor in accordance with Section
3.6(a) of the Intercreditor Agreement. Each Interest Advance made hereunder
shall automatically reduce the Available Commitment and the amount available
to be borrowed hereunder by subsequent Advances by the amount of such Interest
Advance (subject to reinstatement as provided in the next sentence). Upon
repayment to the Liquidity Provider in full of the amount of any Interest
Advance made pursuant to this Section 2.02(a), together with accrued interest
thereon (as provided herein), the Available Commitment shall be reinstated by
the amount of such repaid Interest Advance; provided, however, that the
Available Commitment shall not be so reinstated at any time if (i) both (x) a
Triggering Event shall have occurred and be continuing and (y) a Performing
Note Deficiency exists or (ii) a Liquidity Event of Default shall have
occurred and be continuing.
(b) A Downgrade Advance shall be made in a single Borrowing upon a
downgrading of the rating of the Liquidity Provider resulting in the Liquidity
Provider's ratings not meeting the Threshold Rating (as provided for in
Section 3.6(c) of the Intercreditor Agreement), unless a Replacement Liquidity
Facility shall have been delivered to the Borrower in accordance with said
Section 3.6(c), by delivery to the Liquidity Provider of a written and
completed Notice of Borrowing in substantially the form of Annex II attached
hereto, signed by a Responsible Officer of the Borrower, in an amount equal to
the Available Commitment at such time, and shall be used to fund the Class B
Cash Account in accordance with said Section 3.6(c).
(c) A Final Advance shall be made by the Liquidity Provider without the
necessity for a Notice of Borrowing at the option of the Liquidity Provider on
the occurrence of an event described in Section 6.01(a) or 6.01(b) in an
amount equal to the Available Commitment at such time, and shall be used to
fund the Class B Cash Account.
(d) Each Borrowing (other than the making of a Final Advance) shall be
made on notice in writing (a "Notice of Borrowing") in substantially the form
required by Section 2.02(a) or 2.02(b), as the case may be, given not later
than 12:00 Noon (New York City time) on the second Business Day prior to the
day of the proposed Borrowing by the Borrower to the Liquidity Provider. Upon
satisfaction of the conditions precedent set forth in Section 4.02 with
respect to a requested Borrowing, the Liquidity Provider shall, before 12:00
Noon (New York City time) on the date of such Borrowing or on such later
Business Day specified by the Borrower in such Notice of Borrowing, make
available to the Borrower, in U.S. dollars and in immediately available funds,
the amount of such Borrowing to be paid to the Borrower in accordance with its
payment instructions. If a Notice of Borrowing is delivered by the Borrower
in respect of any Borrowing after 12:00 Noon (New York City time) on a
Business Day, the Liquidity Provider shall, before 12:00 Noon (New York City
time) on the third Business Day next following the day of receipt of such
Notice of Borrowing or on such later Business Day specified by the Borrower in
such Notice of Borrowing, make available to the Borrower, in U.S. dollars and
in immediately available funds, the amount of such Borrowing to be paid to the
Borrower in accordance with its payment instructions. Payments of proceeds of
a Borrowing shall be made by wire transfer of immediately available funds to
the Borrower in accordance with such wire transfer instructions as the
Borrower shall furnish from time to time to the Liquidity Provider for such
purpose. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(e) Upon the making of any Advance requested pursuant to a Notice of
Borrowing, in accordance with the Borrower's payment instructions, the
Liquidity Provider shall be fully discharged of its obligation hereunder with
respect to such Notice of Borrowing, and the Liquidity Provider shall not
thereafter be obligated to make any further Advances hereunder in respect of
such Notice of Borrowing to the Borrower or to any other person (including the
holder of any Class B Pass Through Certificates or the Pass Through Trustee of
the Class B Pass Through Trust) who makes to the Pass Through Trustee of the
Class B Pass Through Trust or the Borrower a demand for payment with respect
to any Class B Pass Through Certificates. By paying to the Borrower proceeds
of Advances requested by the Borrower in accordance with the provisions of
this Agreement, the Liquidity Provider makes no representation as to, and
assumes no responsibility for, the correctness or sufficiency for any purpose
of the amount of the Advances so made and requested.
Section 2.03 Fees. (a) The Borrower agrees to pay to the Liquidity
Provider a fee equal to 0.25% of the Commitment (as in effect on the Effective
Date). Such fee shall be payable on the Effective Date.
(b) The Borrower shall pay, or shall cause to be paid, to the Liquidity
Provider, a fee equal to 0.25% per annum on the average Available Commitment
from the Effective Date to the earlier of the date on which a Downgrade
Advance is made and the date on which the Commitment terminates. Such fee
shall be payable in arrears on each Regular Distribution Date. Nothing
contained in this Section 2.03(b) shall require the Borrower to pay any amount
under this Section 2.03(b) other than to the extent the Borrower shall have
funds available therefor.
Section 2.04 Reduction or Termination of the Commitment. (a)
Automatic Reductions. Promptly following each date on which the Required
Amount is reduced as a result of a reduction in the Pool Balance of the Class
B Pass Through Certificates or otherwise, the Commitment shall automatically
be reduced to an amount equal to such reduced Required Amount (as calculated
by the Borrower). The Borrower shall give notice of any such automatic
reduction of the Commitment (substantially in the form of Annex IV hereto) to
the Liquidity Provider (with a copy to Federal Express Corporation) within two
Business Days thereof. The failure by the Borrower to furnish any such notice
shall not affect such automatic reduction of the Commitment.
(b) Termination. Upon the making of any Downgrade Advance or Final
Advance hereunder or the occurrence of the Termination Date, the obligation of
the Liquidity Provider to make further Advances hereunder shall automatically
and irrevocably terminate, and the Borrower shall not be entitled to request
any further Borrowing hereunder.
Section 2.05 Repayments of Interest Advances or the Final Advance.
Subject to Sections 2.07 and 2.09, the Borrower hereby agrees to pay, or to
cause to be paid, to the Liquidity Provider on each date on which the
Liquidity Provider shall make an Interest Advance or the Final Advance, an
amount equal to (a) the amount of such Interest Advance or the Final Advance
(any such Interest Advance or the Final Advance, until repaid, is referred to
herein as an "Unpaid Advance"), plus (b) interest on the amount of each such
Unpaid Advance as provided in Section 3.07. Subject to Sections 2.06, 2.07
and 2.09, unless otherwise waived by the Liquidity Provider, the Borrower
shall be obligated, without notice of an Advance or demand for repayment from
the Liquidity Provider (which notice and demand are hereby waived by the
Borrower), to repay the Liquidity Provider for all Interest Advances and Final
Advances on the same day as made and all Applied Downgrade Advances on the
same day they become Applied Downgrade Advances in accordance with Section
2.06 hereof. The Borrower and the Liquidity Provider agree that the repayment
in full of each Interest Advance and the Final Advance on the date such
Interest Advance or the Final Advance is made and each Applied Downgrade
Advance on the date it becomes an Applied Downgrade Advance is intended to be
a contemporaneous exchange for new value given to the Borrower by the
Liquidity Provider.
Section 2.06 Repayments of Downgrade Advances. (a) Amounts advanced
hereunder in respect of a Downgrade Advance shall be deposited in the Class B
Cash Account, and invested and withdrawn from the Class B Cash Account, as set
forth in Sections 3.6(c), (e) and (f) of the Intercreditor Agreement. The
Borrower agrees to pay to the Liquidity Provider, on each Regular Distribution
Date, commencing on the first Regular Distribution Date after the making of a
Downgrade Advance, interest on the principal amount of any such Downgrade
Advance as provided in Section 3.07; provided, however, that (i) any
distribution to the Liquidity Provider of Investment Earnings pursuant to
Section 3.6(f) of the Intercreditor Agreement shall constitute a payment of
interest on such Downgrade Advance in the amount of such Investment Earnings
(not to exceed the amount specified in Section 3.07) and (ii) amounts in
respect of a Downgrade Advance withdrawn from the Class B Cash Account for the
purpose of paying interest on the Class B Pass Through Certificates in
accordance with Section 3.6(f) of the Intercreditor Agreement (the amount of
any such withdrawal being an "Applied Downgrade Advance") shall be treated as
an Interest Advance under this Agreement for purposes of determining the
Applicable Liquidity Rate for interest payable thereon. Immediately upon the
withdrawal of any amounts from the Class B Cash Account on account of a
reduction in the Required Amount, the Borrower shall repay the Downgrade
Advances in a principal amount equal to the amount of such reduction, plus
interest on the principal amount repaid as provided in Section 3.07.
(b) At any time when an Applied Downgrade Advance (or any portion
thereof) is outstanding, upon the deposit in the Class B Cash Account of any
amount pursuant to clause "third" of Section 2.4(b), clause "third" of Section
3.2 or clause "fourth" of Section 3.3 of the Intercreditor Agreement (any such
amount being a "Replenishment Amount") for the purpose of replenishing the
balance thereof up to the Required Amount at such time, (i) the aggregate
outstanding principal amount of all Applied Downgrade Advances shall be
automatically reduced by the amount of such Replenishment Amount and (ii) the
principal amount of the outstanding Downgrade Advance shall be automatically
increased by the amount of such Replenishment Amount.
(c) Upon the provision of a Replacement Liquidity Facility in
replacement of this Agreement in accordance with Section 3.6(e) of the
Intercreditor Agreement, and prior to the effectiveness of any Replacement
Liquidity Facility, the Borrower agrees that all amounts owing to the
Liquidity Provider shall be repaid in full, whether from advances made by the
Replacement Liquidity Provider, from amounts remaining on deposit in the Class
B Cash Account after giving effect to any application of funds therefrom to
any payment of interest on the Class B Pass Through Certificates on the date
of such replacement, or otherwise.
Section 2.07 Payments to the Liquidity Provider Under the Intercreditor
Agreement. In order to provide for payment or repayment to the Liquidity
Provider of any amounts hereunder, the Intercreditor Agreement provides that
amounts available and referred to in Articles II and III of the Intercreditor
Agreement, to the extent payable to the Liquidity Provider pursuant to the
terms of the Intercreditor Agreement (including, without limitation, Section
3.6(f) of the Intercreditor Agreement), shall be paid to the Liquidity
Provider in accordance with the terms thereof. Amounts so paid to the
Liquidity Provider shall be applied by the Liquidity Provider in the order of
priority required by the applicable provisions of Articles II and III of the
Intercreditor Agreement.
Section 2.08 Book Entries. The Liquidity Provider shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower resulting from Advances made from time to time
and the amounts of principal and interest payable hereunder and paid from time
to time in respect thereof; provided, however, that the failure by the
Liquidity Provider to maintain such account or accounts shall not affect the
obligations of the Borrower in respect of Advances.
Section 2.09 Payments from Available Funds Only. All payments to be
made by the Borrower under this Agreement shall be made only from amounts
received by it that constitute Scheduled Payments or Special Payments or
amounts payable to it under Article 8, 9 or 10 of any Participation Agreement
and only to the extent that the Borrower shall have sufficient income or
proceeds therefrom to enable the Borrower to make payments in accordance with
the terms hereof after giving effect to the priority of payments provisions set
forth in the Intercreditor Agreement. The Liquidity Provider agrees that it
will look solely to such amounts to the extent available for distribution to
it as provided in the Intercreditor Agreement and this Agreement and that the
Borrower, in its individual capacity, is not personally liable to it for any
amounts payable or liability under this Agreement except as expressly provided
in this Agreement, the Intercreditor Agreement or any Participation Agreement.
Amounts on deposit in the Class B Cash Account shall be available to make
payments only to the extent and for the purposes expressly contemplated in
Section 3.6(f) of the Intercreditor Agreement.
ARTICLE III
OBLIGATIONS OF THE BORROWER
Section 3.01 Increased Costs. If the Liquidity Provider shall
determine that (a) any change after the date hereof in any law or regulation
or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof or in the
compliance by the Liquidity Provider (or its head office) with any applicable
direction, request or requirement (whether or not having the force of law) of
any central bank or competent governmental or other authority shall either (i)
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets held by, or deposits in or for the account of, or
loans made by, the Liquidity Provider, or (ii) impose on the Liquidity
Provider any other condition regarding this Agreement or any Advance, or (iii)
change the basis of taxation of any amounts payable to the Liquidity Provider
(other than Taxes imposed on the overall net or gross income of the Liquidity
Provider) and (b) the result of any event referred to in the preceding clause
(i), (ii) or (iii) shall be to increase the cost to the Liquidity Provider of
issuing or maintaining its commitment or funding or maintaining Advances (which
increase in cost shall be determined by the Liquidity Provider's reasonable
allocations of the aggregate of such cost increases resulting from such
event), or to reduce the amount of any sum received or receivable by the
Liquidity Provider under this Agreement with respect thereto, then, upon
demand by the Liquidity Provider (such demand to be made not later than 60
days after a Responsible Officer of the Liquidity Provider obtains actual
knowledge of any event referred to in clause (i), (ii) or (iii) above), the
Borrower shall pay, or cause to be paid, to the Liquidity Provider, from time
to time as specified by the Liquidity Provider, additional amounts which shall
be sufficient to compensate the Liquidity Provider for such increased cost or
reduction; provided that if such demand for payment is made after such 60-day
period, the Borrower shall be obligated to pay such additional amounts only
with respect to such increased cost or reduction actually incurred or effected
on or after the 60th day prior to the date of such demand. A certificate as
to such increased cost or reduction (which shall set forth the basis for such
increased cost or reduction) incurred by the Liquidity Provider as a result of
any event mentioned in clause (i), (ii) and (iii) above, prepared in
reasonable detail and submitted by the Liquidity Provider to the Borrower,
shall be conclusive, absent manifest error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any amount payable under this Section 3.01 that
may thereafter accrue and would not, in the reasonable judgment of the
Liquidity Provider, be otherwise disadvantageous in any material respect to
the Liquidity Provider.
Section 3.02 Capital Adequacy. If the Liquidity Provider shall
determine that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Liquidity Provider (or its head
office) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, in each case after the date hereof, has the effect of reducing the
rate of return on the Liquidity Provider's capital as a consequence of issuing
or maintaining its commitment hereunder or its funding or maintaining Advances
to a level below that which the Liquidity Provider could have achieved but for
such adoption, change or compliance (taking into consideration the Liquidity
Provider's policies with respect to capital adequacy) by an amount deemed by
the Liquidity Provider to be material, then, upon demand by the Liquidity
Provider, the Borrower shall pay to the Liquidity Provider, from time to time
as specified by the Liquidity Provider, additional amounts which shall be
sufficient to compensate the Liquidity Provider for such reduction in respect
of issuing or maintaining its commitment hereunder or its funding or
maintaining Advances. A certificate as to such additional amount describing
the event which has the effect of reducing the rate of return on the Liquidity
Provider's capital, prepared in reasonable detail and submitted by the
Liquidity Provider to the Borrower, shall be conclusive, absent manifest
error, as to the amount thereof.
The Liquidity Provider agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any amount payable under this Section 3.02 that
may thereafter accrue and would not, in the reasonable judgment of the
Liquidity Provider, be otherwise disadvantageous in any material respect to
the Liquidity Provider.
Section 3.03 Payments Free of Deductions. All payments made by the
Borrower under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future stamp or other taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, restrictions
or conditions of any nature whatsoever now or hereafter imposed, levied,
collected, withheld or assessed, excluding any Taxes imposed on the overall
net income of the Liquidity Provider and excluding United States federal income
tax withholding to the extent such withholding is, or would be, actually
imposed upon payments to the Liquidity Provider as of the date of this
Agreement (such non-excluded taxes being referred to herein, collectively, as
"Non-Excluded Taxes" and, individually, as a "Non-
Excluded Tax"). If any Non-Excluded Taxes are required to be withheld from
any amounts payable to the Liquidity Provider under this Agreement, the
amounts so payable to the Liquidity Provider shall be increased to the extent
necessary to yield to the Liquidity Provider (after payment of all
Non-Excluded Taxes and taxes imposed on the receipt of such increase) interest
or any other such amounts payable under this Agreement at the rates or in the
amounts specified in this Agreement. Whenever any Non-Excluded Tax is payable
by the Borrower, promptly thereafter the Borrower shall send the Liquidity
Provider certified copies of tax receipts evidencing such payment by the
Borrower. The Liquidity Provider agrees to provide to the Borrower on or
prior to the Effective Date, and from time to time thereafter after the
occurrence of any event requiring a change in the most recent form previously
delivered by it (and prior to the immediately following due date of any
payment by the Borrower hereunder), to the extent that the Liquidity Provider
is legally entitled to do so, two original Internal Revenue Service Form 1001
or 4224, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that the Liquidity Provider is completely
exempt from United States withholding tax on payments pursuant to this
Agreement.
The Liquidity Provider agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Lending Office if making such change would avoid the need
for, or reduce the amount of, any amount payable under this Section 3.03 that
may thereafter accrue and would not, in the reasonable judgment of the
Liquidity Provider, be otherwise disadvantageous in any material respect to
the Liquidity Provider.
Section 3.04 Payments. The Borrower shall make or cause to be made
each payment to the Liquidity Provider under this Agreement so as to cause the
same to be received by the Liquidity Provider not later than 1:00 P.M. (New
York City time) on the day when due. The Borrower shall make all such
payments in lawful money of the United States of America, to the Liquidity
Provider in immediately available funds, by wire transfer to the office of
Citibank, N.A., New York City, for credit to KfW, Account No.▇▇▇-▇▇▇-▇▇.
Section 3.05 Computations. All computations of interest based on the
Base Rate shall be made on the basis of a year of 365 or 366 days, as the case
may be, and all computations of (x) interest based on the LIBOR Rate and (y)
fees payable to the Liquidity Provider shall be made on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest is
payable.
Section 3.06 Payment on Non-Business Days. Whenever any payment to be
made hereunder (other than a payment on LIBOR Advances) becomes due and
payable on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day and interest thereon shall be payable at the then
applicable rate during such extension. If any payment on a LIBOR Advance
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the
result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Business Day.
Section 3.07 Interest. (a) The Borrower shall pay, or shall cause to
be paid, interest on (i) the unpaid principal amount of each Advance from and
including the date of such Advance (or, in the case of an Applied Downgrade
Advance, from and including the date on which the amount thereof was withdrawn
from the Class B Cash Account to pay interest on the Class B Pass Through
Certificates) to but excluding the date such principal amount shall be paid in
full and (ii) any other amount due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by law, installments of
interest on Advances or any such other amount) which is not paid when due
(whether at stated maturity, by acceleration or otherwise) from and including
the due date thereof to but excluding the date such amount is paid in full, in
each such case, at a fluctuating interest rate per annum for each day equal to
the Applicable Liquidity Rate (as defined below) for such Advance set forth
below or such other amount as in effect for such day, but in no event at a
rate per annum greater than the maximum rate permitted by applicable law;
provided, however, that, if at any time the otherwise applicable interest rate
as set forth in this Section 3.07 shall exceed the maximum rate permitted by
applicable law, then any subsequent reduction in such interest rate will not
reduce the rate of interest payable pursuant to this Section 3.07 below the
maximum rate permitted by applicable law until the total amount of interest
accrued equals the amount of interest that would have accrued if such
otherwise applicable interest rate as set forth in this Section 3.07 had at
all times been in effect. Nothing contained in this Section 3.07 shall
require the Borrower to pay any amount under this Section 3.07 other than to
the extent the Borrower shall have funds available therefor.
(b) Except as provided in Section 3.07(e), each Advance will be either a
Base Rate Advance or a LIBOR Advance as provided in this Section. Each such
Advance will be a Base Rate Advance for the period from the date of its
borrowing to (but excluding) the third Business Day following the Liquidity
Provider's receipt of the Notice of Borrowing for such Advance. Thereafter,
such Advance shall be a LIBOR Advance.
(c) Each LIBOR Advance shall bear interest during each Interest Period
at a per annum rate equal to the LIBOR Rate for such Interest Period plus the
Applicable Margin for such LIBOR Advance, payable in arrears on the last day
of such Interest Period and, in the event of the payment of principal of such
LIBOR Advance on a day other than such last day, on the date of such payment
(to the extent of interest accrued on the amount of principal repaid).
(d) Each Base Rate Advance shall bear interest at a per annum rate
equal to the Base Rate plus the Applicable Margin for such Base Rate Advance,
payable in arrears on each Regular Distribution Date and, in the event of the
payment of principal of such Base Rate Advance on a day other than a Regular
Distribution Date, on the date of such payment (to the extent of interest
accrued on the amount of principal repaid).
(e) Each Downgrade Advance (other than an Applied Downgrade Advance)
shall bear interest during the period from and including the date of the
making of such Downgrade Advance through but excluding the Expiry Date (or, if
earlier, the date of repayment thereof or of conversion thereof into a Final
Advance), in an amount equal to the sum of (i) Investment Earnings on amounts
on deposit in the Class B Cash Account for such period plus (ii) 0.25% per
annum on the amount of such Downgrade Advance, payable in arrears on each
Regular Distribution Date and on the date of repayment thereof or conversion
thereof into a Final Advance.
(f) Each amount not paid when due hereunder (whether fees, commissions,
expenses or other amounts or, to the extent permitted by applicable law,
installments of interest on Advances) shall bear interest at the Base Rate
plus 1.00% per annum.
(g) Each change in the Base Rate shall become effective immediately.
The rates of interest specified in this Section 3.07 with respect to any
Advance or other amount shall be referred to as the "Applicable Liquidity
Rate."
Section 3.08 Replacement of Borrower. Subject to Section 5.02(b),
from time to time, upon the effective date and time specified in a written and
completed Notice of Replacement Borrower in substantially the form of Annex
III attached hereto (a "Notice of Replacement Borrower") delivered to the
Liquidity Provider by the then Borrower, the successor Borrower designated
therein shall be substituted for as the Borrower for all purposes hereunder.
Section 3.09 Funding Loss Indemnification. The Borrower shall pay to
the Liquidity Provider, upon the request of the Liquidity Provider, such
amount or amounts as shall be sufficient (in the reasonable opinion of the
Liquidity Provider) to compensate it for any loss, cost, or expense incurred
as a result of:
(a) Any payment or prepayment of a LIBOR Advance on a date other
than the last day of the Interest Period for such Advance;
(b) Any failure by the Borrower to borrow or convert, as the case
may be, a LIBOR Advance on the date for borrowing or conversion, as the
case may be, specified in the relevant notice under Section 2.02 or 3.07;
or
(c) Any conversion of a LIBOR Advance to a Base Rate Advance other
than on the last day of the Interest Period for such Advance.
Section 3.10 Illegality. Notwithstanding any other provision in this
Agreement, if any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by the Liquidity Provider (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency shall make
it unlawful or impossible for the Liquidity Provider (or its Lending Office)
to maintain or fund its LIBOR Advances, then upon notice to the Borrower by
the Liquidity Provider, the outstanding principal amount of the LIBOR Advances
shall be converted to Base Rate Advances (a) immediately upon demand of the
Liquidity Provider, if such change or compliance with such request, in the
judgment of the Liquidity Provider, requires immediate repayment; or (b) at
the expiration of the last Interest Period to expire before the effective date
of any such change or request. In the event any change of the nature
described in the preceding sentence shall make it unlawful or impossible for
the Liquidity Provider (or its Lending Office) to maintain or fund its Base
Rate Advances, the Liquidity Provider shall have the right to cause a
Replacement Liquidity Facility to be substituted for this Agreement, subject
to (i) the satisfaction of the conditions precedent to the effectiveness of,
and the other provisions regarding, a Replacement Liquidity Facility set forth
in Section 3.6(e) of the Intercreditor Agreement and (ii) such Replacement
Liquidity Facility and Replacement Liquidity Provider being reasonably
acceptable to Federal Express Corporation.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to Effectiveness of Section 2.01.
Section 2.01 of this Agreement shall become effective on and as of the first
date (the "Effective Date") on which the following conditions precedent have
been satisfied or waived:
(a) The Liquidity Provider shall have received on or before the
Closing Date each of the following, each dated such date (except for those
documents delivered pursuant to paragraphs (v) and (vii) of this Section
4.01(a)), and each in form and substance satisfactory to the Liquidity
Provider:
(i) This Agreement duly executed on behalf of the Borrower;
(ii) The Intercreditor Agreement duly executed on behalf of
each of the parties thereto;
(iii) Counterparts (or certified copies thereof) of each of
the Operative Agreements (other than this Agreement and the
Intercreditor Agreement) which, when taken together, bear the
signatures of all of the respective parties thereto and which are in
full force and effect in accordance with their respective terms;
(iv) A copy of the Prospectus and specimen copies of the Class
B Pass Through Certificates;
(v) Evidence that, on the Effective Date, the Class A Pass
Through Certificates, the Class B Pass Through Certificates and the
Class C Pass Through Certificates will receive long-term credit
ratings from ▇▇▇▇▇'▇ of not lower than Aa2, A1 and Baa1,
respectively, and from Standard & Poor's of not lower than AAA, AA
and BBB+, respectively;
(vi) An executed or certified copy of each document,
instrument, certificate and opinion delivered pursuant to the Class
B Supplement, the Intercreditor Agreement, the Participation
Agreements and the other Operative Agreements (together with, in the
case of each such opinion (unless such opinion is addressed to the
Liquidity Provider), other than the opinion of counsel for the
Underwriters, a letter from the counsel rendering such opinion to
the effect that the Liquidity Provider is entitled to rely on such
opinion as if it were addressed to the Liquidity Provider);
(vii) Evidence that there shall have been made and shall be in
full force and effect, all filings, recordings and/or registrations,
and there shall have been given or taken any notice or other similar
action as may be reasonably necessary or, to the extent reasonably
requested by the Liquidity Provider, reasonably advisable, in order
to establish, perfect, protect and preserve the right, title and
interest, remedies, powers, privileges, liens and security interests
of, or for the benefit of, the Pass Through Trustee and the
Liquidity Provider created by the Operative Agreements;
(viii) Copies of the appraisals attached as exhibits to the
Prospectus; and
(ix) A letter from Federal Express Corporation agreeing to
provide to the Liquidity Provider the periodic financial reports
referred to in Section 4.03 of the Pass Through Agreements; and
(x) Such other documents, instruments, opinions and approvals
(and, if requested by the Liquidity Provider, certified duplicates
or executed copies thereof) as the Liquidity Provider shall have
reasonably requested.
(b) The following statements shall be true and shall be deemed to
have been represented by each party (other than clause (ii) below, which
shall be deemed to have been represented only by Federal Express
Corporation) on and as of the Effective Date:
(i) The representations and warranties of such Person
contained in each Participation Agreement are true and correct on
and as of the Effective Date as though made on and as of the
Effective Date; and
(ii) No event has occurred and is continuing, or would result
from the entering into of this Agreement or the making of any
Advance, which constitutes a Liquidity Event of Default.
(c) The Liquidity Provider shall have received payment in full of
all fees and other sums required to be paid to or for the account of the
Liquidity Provider on or prior to the Effective Date.
(d) All conditions precedent to the issuance of the Pass Through
Certificates under the Pass Through Agreements shall have been satisfied,
all conditions precedent to the effectiveness of the other Liquidity
Facilities shall have been satisfied, and all conditions precedent to the
purchase of the Pass Through Certificates by the Underwriters under the
Underwriting Agreement shall have been satisfied (except for any of such
conditions precedent under the Underwriting Agreement that shall have been
waived by the Underwriters).
(e) The Borrower shall have received a certificate, dated the date
hereof, signed by a duly authorized representative of the Liquidity
Provider, certifying that all conditions precedent to the effectiveness of
Section 2.01 have been satisfied or waived (other than this Section
4.01(e)).
Section 4.02 Conditions Precedent to Borrowing. The obligation of the
Liquidity Provider to make an Advance on the occasion of each Borrowing shall
be subject to the conditions precedent that the Effective Date shall have
occurred and, except in the case of a Final Advance, prior to the date of such
Borrowing, the Borrower shall have delivered a Notice of Borrowing which
conforms to the terms and conditions of this Agreement and has been completed
as may be required by the relevant form of the Notice of Borrowing for the
type of Advance requested.
ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will, unless the
Liquidity Provider shall otherwise consent in writing:
(a) Performance of This and Other Agreements. Punctually pay or
cause to be paid all amounts payable by it under this Agreement and the
other Operative Agreements and observe and perform in all material
respects the conditions, covenants and requirements applicable to it
contained in this Agreement and the other Operative Agreements.
(b) Reporting Requirements. Furnish to the Liquidity Provider with
reasonable promptness, such other information and data with respect to the
transactions contemplated by the Operative Agreements as from time to time
may be reasonably requested by the Liquidity Provider; and permit the
Liquidity Provider, upon reasonable notice, to inspect the Borrower's
books and records with respect to such transactions and to meet with
officers and employees of the Borrower to discuss such transactions.
(c) Certain Operative Agreements. Furnish to the Liquidity Provider
with reasonable promptness any Operative Agreement (but not including the
Tax Indemnity Agreement as defined in the Participation Agreement) entered
into after the date hereof.
Section 5.02 Negative Covenants of the Borrower. So long as any
Advance shall remain unpaid or the Liquidity Provider shall have any
Commitment hereunder or the Borrower shall have any obligation to pay any
amount to the Liquidity Provider hereunder, the Borrower will not, without the
written consent of the Liquidity Provider (such consent not to be unreasonably
withheld):
(a) Amendments. Modify, amend or supplement, or give any consent
to any modification, amendment or supplement or make any waiver with
respect to, any provision of the Pass Through Agreements, except for any
supplemental agreement to the Pass Through Agreements provided for in
Section 11.01 thereof.
(b) Borrower. Appoint or permit or suffer to be appointed any
successor Borrower.
ARTICLE VI
FINAL ADVANCE
Section 6.01 Final Advance. If (a) both (i) a Triggering Event shall
have occurred and be continuing and (ii) a Performing Note Deficiency exists
or (b) a Liquidity Event of Default shall have occurred and be continuing, the
Liquidity Provider may, in its discretion, make a Final Advance whereupon (i)
the Liquidity Provider shall have no further obligation to make Advances
hereunder, (ii) all other outstanding Advances shall be automatically
converted into Final Advances for purposes of determining the Applicable
Liquidity Rate for interest payable thereon, and (iii) subject to Sections
2.07 and 2.09, all Advances, any accrued interest thereon and any other
amounts outstanding hereunder shall become immediately due and payable to the
Liquidity Provider.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Amendments, Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Liquidity Provider, and, in the case of an amendment, the Borrower, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
Section 7.02 Notices, Etc. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
in writing (including telecopier and mailed or delivered or sent by
telecopier):
Borrower: First Security Bank, National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Liquidity
Provider: Kreditanstalt fur ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇-▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attention: Head of Aircraft
Finance Department K111 b 3
Telephone: ▇▇▇-▇▇-▇▇-▇▇▇▇-▇
Telecopy: 011-49-69-7431-2944
or, as to each of the foregoing, at such other address as shall be designated
by such Person in a written notice to the others. All such notices and
communications shall be effective (i) if given by telecopier, when transmitted
to the telecopier number specified above, (ii) if given by mail, when
deposited in the mails addressed as specified above, and (iii) if given by
other means, when delivered at the address specified above, except that
written notices to the Liquidity Provider pursuant to the provisions of
Articles II and III hereof shall not be effective until received by the
Liquidity Provider. A copy of all notices delivered hereunder to either party
shall in addition be delivered to each of the parties to the Participation
Agreements at their respective addresses set forth therein.
Section 7.03 No Waiver; Remedies. No failure on the part of the
Liquidity Provider to exercise, and no delay in exercising, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
Section 7.04 Further Assurances. The Borrower agrees to do, upon
request, such further acts and things and to execute and deliver to the
Liquidity Provider such additional assignments, agreements, powers and
instruments as the Liquidity Provider may reasonably require or deem advisable
to carry into effect the purposes of this Agreement and the other Operative
Agreements or to better assure and confirm unto the Liquidity Provider its
rights, powers and remedies hereunder and under the other Operative Agreements.
Section 7.05 Indemnification; Survival of Certain Provisions. The
Liquidity Provider shall be indemnified hereunder to the extent and in the
manner described in Articles 8 and 9 of the Participation Agreements. In
addition, the Borrower agrees to indemnify, protect, defend and hold harmless
the Liquidity Provider from, against and in respect of, and shall pay on
demand, all Expenses of any kind or nature whatsoever, whether arising before,
on or after the date hereof, that may be imposed, incurred by or asserted
against any Liquidity Indemnitee, in any way relating to, resulting from, or
arising out of or in connection with, this Agreement, the Intercreditor
Agreement or the Participation Agreements; provided, however, that the
Borrower shall not be required to indemnify, protect, defend and hold harmless
any Liquidity Indemnitee in respect of any Expense of such Liquidity
Indemnitee (i) to the extent such Expense is attributable to the gross
negligence or willful misconduct of such Liquidity Indemnitee or any Related
Indemnitee, (ii) that is ordinary and usual operating overhead expense or
(iii) to the extent such Expense is attributable to the failure by such
Liquidity Indemnitee or its Related Indemnitee to perform or observe any
agreement, covenant or condition on its part to be performed or observed in
any Operative Agreement. The indemnities contained in Articles 8 and 9 of the
Participation Agreements, and the provisions of Sections 3.01, 3.02, 3.03,
3.09, 7.05 and 7.07, shall survive the termination of this Agreement.
Section 7.06 Liability of the Liquidity Provider. (a) Neither the
Liquidity Provider nor any of its officers or directors shall be liable or
responsible for: (i) the use which may be made of the Advances or any acts or
omissions of the Borrower or any beneficiary or transferee in connection
therewith; (ii) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in any or
all respects invalid, insufficient, fraudulent or forged; or (iii) the making
of Advances by the Liquidity Provider against delivery of a Notice of
Borrowing and other documents which do not comply with the terms hereof;
provided, however, that the Borrower shall have a claim against the Liquidity
Provider, and the Liquidity Provider shall be liable to the Borrower, to the
extent of any damages suffered by the Borrower which were the result of (A)
the Liquidity Provider's willful misconduct or gross negligence in determining
whether documents presented hereunder comply with the terms hereof, or (B) any
breach by the Liquidity Provider of any of the terms of this Agreement,
including, but not limited to, the Liquidity Provider's failure to make lawful
payment hereunder after the delivery to it by the Borrower of a Notice of
Borrowing strictly complying with the terms and conditions hereof.
(b) The Liquidity Provider shall not be liable or responsible in any
respect for (i) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with this Agreement or any Notice of Borrowing delivered hereunder,
or (ii) any action, inaction or omission which may be taken by it in good
faith, absent willful misconduct or gross negligence (in which event the
extent of the Liquidity Provider's potential liability to the Borrower shall
be limited as set forth in the immediately preceding paragraph), in connection
with this Agreement or any Notice of Borrowing.
Section 7.07 Costs, Expenses and Taxes. The Borrower agrees to pay, or
cause to be paid (A) on the Effective Date and on such later date or dates on
which the Liquidity Provider shall make demand, all reasonable out-of-pocket
costs and expenses of the Liquidity Provider in connection with the
preparation, negotiation, execution, delivery, filing and recording of this
Agreement, any other Operative Agreement and any other documents which may be
delivered in connection with this Agreement, including, without limitation, the
reasonable fees and expenses of outside counsel for the Liquidity Provider and
(B) on demand, all reasonable costs and expenses of the Liquidity Provider
(including reasonable counsel fees and expenses) in connection with (i) the
enforcement of this Agreement or any other Operative Agreement, (ii) the
modification or amendment of, or supplement to, this Agreement or any other
Operative Agreement or such other documents which may be delivered in
connection herewith or therewith (whether or not the same shall become
effective) or (iii) any action or proceeding relating to any order,
injunction, or other process or decree restraining or seeking to restrain the
Liquidity Provider from paying any amount under this Agreement, the
Intercreditor Agreement or any other Operative Agreement or otherwise
affecting the application of funds in the Cash Accounts. In addition, the
Borrower shall pay any and all recording, stamp and other similar taxes and
fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement, any other Operative
Agreement and such other documents, and agrees to save the Liquidity Provider
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
Section 7.08 Binding Effect; Participations. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower and the
Liquidity Provider and their respective successors and assigns, except that
neither the Liquidity Provider (except as otherwise provided in this Section
7.08) nor the Borrower shall have the right to assign its rights hereunder or
any interest herein without the prior written consent of the other party,
subject to the requirement of Section 7.08(b). The Liquidity Provider may
grant participations herein or in any of its rights or security hereunder and
under the other Operative Agreements to such Persons as the Liquidity Provider
may in its sole discretion select, subject to the requirement of Section
7.08(b). No such participation by the Liquidity Provider, however, will
relieve the Liquidity Provider of its obligations hereunder. In connection
with any participation or any proposed participation, the Liquidity Provider
may disclose to the participant or the proposed participant any information
that the Borrower is required to deliver or to disclose to the Liquidity
Provider pursuant to this Agreement. The Borrower acknowledges and agrees
that the Liquidity Provider's source of funds may derive in part from its
participants. Accordingly, references in this Agreement and the other
Operative Agreements to determinations, reserve and capital adequacy
requirements, increased costs, reduced receipts and the like as they pertain
to the Liquidity Provider shall be deemed also to include those of each of its
participants (subject, in each case, to the maximum amount that would have
been incurred by or attributable to the Liquidity Provider directly if the
Liquidity Provider had not participated the interest).
(b) If, pursuant to subsection (a) above, the Liquidity Provider sells
any participation to any bank or other entity (each, a "Participant"), then,
concurrently with the effectiveness of such participation, the Participant
shall (i) represent to the Liquidity Provider (for the benefit of the
Liquidity Provider and the Borrower) either (A) that it is incorporated under
the laws of the United States or a state thereof or (B) that under applicable
law and treaties, no taxes will be required to be withheld by the Borrower or
the Liquidity Provider with respect to any payments to be made to such
Participant in respect of this Agreement, (ii) furnish to the Liquidity
Provider and the Borrower either (x) a statement that it is incorporated under
the laws of the United States or a state thereof or (y) if it is not so
incorporated, two copies of a properly completed United States Internal
Revenue Service Form 4224 or Form 1001, as appropriate, or other applicable
form, certificate or document prescribed by the Internal Revenue Service
certifying, in each case, such Participant's entitlement to a complete
exemption from United States federal withholding tax in respect to any and all
payments to be made hereunder, and (iii) agree (for the benefit of the
Liquidity Provider and the Borrower) to provide the Liquidity Provider and the
Borrower a new Form 4224 or Form 1001, as appropriate, (A) on or before the
date that any such form expires or becomes obsolete or (B) after the
occurrence of any event requiring a change in the most recent form previously
delivered by it and prior to the immediately following due date of any payment
by the Borrower hereunder, certifying in the case of a Form 1001 or Form 4224
that such Participant is entitled to a complete exemption from United States
federal withholding tax on payments under this Agreement. Unless the Borrower
has received forms or other documents reasonably satisfactory to it indicating
that payments hereunder are not subject to United States federal withholding
tax, the Borrower will withhold taxes as required by law from such payments at
the applicable statutory rate without any obligation to gross-up or indemnify
pursuant to Section 3.03.
(c) Notwithstanding the other provisions of this Section 7.08, the
Liquidity Provider may assign and pledge all or any portion of the Advances
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank, provided that any payment in respect of such assigned Advances
made by the Borrower to the Liquidity Provider in accordance with the terms of
this Agreement shall satisfy the Borrower's obligations hereunder in respect
of such assigned Advance to the extent of such payment. No such assignment
shall release the Liquidity Provider from its obligations hereunder.
Section 7.09 Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of
such provision in any other jurisdiction.
Section 7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 7.11 Submission to Jurisdiction; Waiver of Jury Trial. (a)
Each of the parties hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any other Operative Agreement, or
for recognition and enforcement of any judgment in respect hereof or
thereof, to the nonexclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the
Southern District of New York, and the appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(iii) if such party does not maintain an office for the transaction
of its business in New York, agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to each party hereto at its address set forth in Section
7.02, or at such other address of which the Liquidity Provider shall have
been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction.
(b) THE BORROWER AND THE LIQUIDITY PROVIDER EACH HEREBY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING
ESTABLISHED, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. The
Borrower and the Liquidity Provider each warrant and represent that it has
reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with such
legal counsel. THIS WAIVER CANNOT BE MODIFIED ORALLY.
(c) The Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States or of any State
and waives any immunity any of its properties located in the United States may
have from attachment or execution upon a judgment entered by any such court
under the United States Foreign Sovereign Immunities Act of 1976 or any
similar successor legislation.
Section 7.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 7.13 Entirety. This Agreement and the other Operative
Agreements constitute the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof and supersede all prior
understandings and agreements of such parties.
Section 7.14 Headings; Section References. Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. Unless the context
otherwise requires or otherwise indicated herein, all Section references in
this Agreement are references to Sections hereof.
Section 7.15 LIQUIDITY PROVIDER'S OBLIGATION TO MAKE ADVANCES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE OBLIGATIONS OF THE LIQUIDITY
PROVIDER TO MAKE ADVANCES HEREUNDER, AND THE BORROWER'S RIGHTS TO DELIVER
NOTICES OF BORROWING REQUESTING THE MAKING OF ADVANCES HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE, AND SHALL BE PAID OR PERFORMED, IN EACH CASE
STRICTLY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first set forth above.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:________________________________________
Name:
Title:
KREDITANSTALT FUR WIEDERAUFBAU,
as Liquidity Provider
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
Annex I to Irrevocable
Revolving Credit Agreement
INTEREST ADVANCE NOTICE OF BORROWING
First Security Bank, National Association, acting not in its individual
capacity but solely as Subordination Agent, as borrower (the "Borrower"),
hereby certifies to Kreditanstalt fur Wiederaufbau, (the "Liquidity
Provider"), with reference to the Irrevocable Revolving Credit Agreement Class
B Pass Through Certificates dated as of June 15, 1998, between the Borrower
and the Liquidity Provider (the "Liquidity Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined
or referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of an Interest Advance by the Liquidity Provider to be used for the
payment of interest on the Class B Pass Through Certificates which was
payable on the Distribution Date falling on __________ in accordance with
the terms and provisions of the Class B Supplement and the Class B Pass
Through Certificates and has not been paid pursuant to clause fourth of
Section 3.2 of the Intercreditor Agreement or clause sixth of Section 3.3
of the Intercreditor Agreement, which Advance is requested to be made on
___________________.
(3) The amount of the Interest Advance requested hereby (i) is
$________, to be applied in respect of the payment of interest which was
due and payable on the Class B Pass Through Certificates on such
Distribution Date, (ii) does not include any amount with respect to the
payment of principal of, or premium on, the Class A Pass Through
Certificates, the Class B Pass Through Certificates or the Class C Pass
Through Certificates, or interest on the Class A Pass Through Certificates
or the Class C Pass Through Certificates, (iii) was computed in accordance
with the provisions of the Class B Pass Through Certificates, the Class B
Supplement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), (iv) does not exceed the Available
Commitment on the date hereof, and (v) has not been and is not the subject
of a prior or contemporaneous Notice of Borrowing.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will apply the same in accordance with
the terms of Sections 3.2 or 3.3 of the Intercreditor Agreement, as the
case may be, (b) no portion of such amount shall be applied by the
Borrower for any other purpose and (c) no portion of such amount until so
applied shall be commingled with other funds held by the Borrower.
(5) The Borrower hereby requests that the Advance requested hereby
be a Base Rate Advance and that such Base Rate Advance be converted into a
LIBOR Rate Advance on the third Business Day following your receipt of
this notice.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, the making of the Interest Advance as requested by this Notice of
Borrowing shall automatically reduce, subject to reinstatement in accordance
with the terms of the Liquidity Agreement, the Available Commitment by an
amount equal to the amount of the Interest Advance requested to be made hereby
as set forth in clause (i) of paragraph (3) of this Certificate and such
reduction shall automatically result in corresponding reductions in the
amounts available to be borrowed pursuant to a subsequent Advance.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the __ day of ______________, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:________________________________________
Name:
Title:
SCHEDULE I TO INTEREST ADVANCE NOTICE OF BORROWING
[Insert Copy of Computations in accordance with
Interest Advance Notice of Borrowing]
Annex II to Irrevocable
Revolving Credit Agreement
DOWNGRADE ADVANCE NOTICE OF BORROWING
FIRST SECURITY BANK, NATIONAL ASSOCIATION, acting not in its individual
capacity but solely as Subordination Agent, as borrower (the "Borrower"),
hereby certifies to Kreditanstalt fur Wiederaufbau (the "Liquidity Provider"),
with reference to the Irrevocable Revolving Credit Agreement Class B Pass
Through Certificates dated as of June 15, 1998, between the Borrower and the
Liquidity Provider (the "Liquidity Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined or
referenced), that:
(1) The Borrower is the Subordination Agent under the Intercreditor
Agreement.
(2) The Borrower is delivering this Notice of Borrowing for the
making of the Downgrade Advance by the Liquidity Provider to be used for
the funding of the Class B Cash Account in accordance with Section 3.6(c)
of the Intercreditor Agreement by reason of the downgrading of the debt
rating of the Liquidity Provider issued by either Rating Agency below the
applicable Threshold Rating, which Advance is requested to be made on
____________.
(3) The amount of the Downgrade Advance requested hereby (i) is
$_____, which equals the Available Commitment on the date hereof and is to
be applied in respect of the funding of the Class B Cash Account in
accordance with Section 3.6(c) of the Intercreditor Agreement, (ii) does
not include any amount with respect to the payment of the principal of, or
premium on, the Class B Pass Through Certificates, or principal of, or
interest or premium on, the Class A Pass Through Certificates or the Class
C Pass Through Certificates, (iii) was computed in accordance with the
provisions of the Class B Pass Through Certificates, the Class B
Supplement and the Intercreditor Agreement (a copy of which computation is
attached hereto as Schedule I), and (iv) has not been and is not the
subject of a prior or contemporaneous Notice of Borrowing under the
Liquidity Agreement.
(4) Upon receipt by or on behalf of the Borrower of the amount
requested hereby, (a) the Borrower will deposit such amount in the Class B
Cash Account and apply the same in accordance with the terms of Section
3.6(c) of the Intercreditor Agreement, (b) no portion of such amount shall
be applied by the Borrower for any other purpose and (c) no portion of
such amount until so applied shall be commingled with other funds held by
the Borrower.
The Borrower hereby acknowledges that, pursuant to the Liquidity
Agreement, (A) the making of the Downgrade Advance as requested by this Notice
of Borrowing shall automatically and irrevocably terminate the obligation of
the Liquidity Provider to make further Advances under the Liquidity Agreement;
and (B) following the making by the Liquidity Provider of the Downgrade
Advance requested by this Notice of Borrowing, the Borrower shall not be
entitled to request any further Advances under the Liquidity Agreement.
IN WITNESS WHEREOF, the Borrower has executed and delivered this Notice
of Borrowing as of the __ day of ______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Subordination Agent, as Borrower
By:________________________________________
Name:
Title:
SCHEDULE I TO DOWNGRADE ADVANCE NOTICE OF BORROWING
[Insert Copy of computations in accordance with
Downgrade Advance Notice of Borrowing]
Annex III to Irrevocable
Revolving Credit Agreement
NOTICE OF REPLACEMENT BORROWER
[Date]
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
[Name of Transferee]
[Address of Transferee]
all rights of the undersigned as Borrower under the Liquidity Agreement
referred to above. The transferee has succeeded the undersigned as
Subordination Agent under the Intercreditor Agreement referred to in the first
paragraph of the Liquidity Agreement.
By this transfer, all rights of the undersigned as Borrower under the
Liquidity Agreement are transferred to the transferee and the transferee shall
hereafter have the sole rights as Borrower thereunder. The undersigned shall
pay any costs and expenses of such transfer, including, but not limited to,
transfer taxes or governmental charges.
We ask that this transfer be effective as of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:________________________________________
Name:
Title:
Annex IV Irrevocable
Revolving Credit Agreement
NOTICE OF AUTOMATIC REDUCTION OF COMMITMENT
[Date]
Ladies and Gentlemen:
The undersigned, duly authorized signatory of the undersigned
subordination agent (the "Borrower"), hereby notifies Kreditanstalt fur
Wiederaufbau (the "Liquidity Provider"), with reference to the Irrevocable
Revolving Credit Agreement Class B Pass Through Certificates dated as of June
15, 1998, between the Borrower and the Liquidity Provider (the "Liquidity
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined or referenced), that, pursuant to Section
2.04(a) of the Liquidity Agreement, the Commitment has been automatically
reduced to $____________.
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Notice of Automatic Reduction of Commitment as of the ___day of _______, ____.
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Subordination Agent, as
Borrower
By:________________________________________
Name:
Title: