EXHIBIT 1.1
UNITED PARCEL SERVICE, INC.
$500,000,000
UPS NOTES
WITH MATURITIES OF 9 MONTHS OR MORE FROM DATE OF ISSUE
SELLING AGENT AGREEMENT
September 12, 2003
The Purchasing Agents Listed in
Schedule I hereto
Dear Sirs:
United Parcel Service, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell up to $500,000,000 aggregate principal amount of its
UPS Notes (the "NOTES") with maturities of 9 months or more from date of issue
pursuant to the provisions of the Indenture, dated as of August 26, 2003 (the
"INDENTURE"), between the Company and Citibank, N.A., as Trustee (the
"Trustee"). The Notes shall have the maturity ranges, interest rates and other
terms set forth in the Prospectus referred to below as it may be amended or
supplemented from time to time. The Notes will be issued, and the terms thereof
established, from time to time by the Company in accordance with the Indenture.
Subject to the terms and conditions contained in this Selling Agent
Agreement (the "AGREEMENT") and to the reservation by the Company of the right
to sell up to $50,000,000 aggregate principal amount of Notes directly on its
own behalf or indirectly through agents other than the Agents (as hereinafter
defined) in up to ten separate transactions, the Company hereby (i) appoints
each of you as an agent of the Company (individually, an "AGENT" and
collectively the "AGENTS") for the purpose of soliciting and receiving offers to
purchase Notes from the Company and (ii) agrees that whenever the Company
determines to sell Notes pursuant to this Agreement, such Notes shall be sold
pursuant to a Terms Agreement (as defined in Section IV(b) below) relating to
such sale in accordance with the provisions of Section IV(b) hereof between the
Company and ABN AMRO Financial Services, Inc. (the "PURCHASING AGENT"), with the
Purchasing Agent purchasing such Notes as principal for resale to others. You
hereby agree to use your reasonable best efforts to solicit and receive offers
to purchase Notes upon terms acceptable to the Company at such times and in such
amounts as the Company shall from time to time specify and in accordance with
the terms hereof. This Agreement shall not be construed to create either an
obligation on the part of the Company to sell any Notes or an obligation of any
of the Agents to purchase Notes.
I.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-108272) relating to
the Notes and the offering thereof, from time to time, in accordance with Rule
415 under the Securities Act of 1933, as amended (the "SECURITIES ACT"). Such
registration statement, including all documents incorporated therein by
reference, as from time to time amended or supplemented, is referred to herein
as the "REGISTRATION STATEMENT". The Registration Statement has been declared
effective by the Commission, and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"). The Company
has prepared for filing with the Commission, pursuant to Rule 424 under the
Securities Act, a prospectus supplement (the "PROSPECTUS SUPPLEMENT") to the
prospectus included in the Registration Statement (the "BASE PROSPECTUS") for
the purpose of supplying information in respect of the public offering of the
Notes. The Prospectus Supplement, together with the Base Prospectus, including
all documents incorporated therein by reference, as from time to time amended or
supplemented, and including any supplement that sets forth only the terms of a
particular issue of the Notes (a "PRICING SUPPLEMENT"), are referred to herein
as the "PROSPECTUS".
II.
Your obligations hereunder are subject to the following conditions,
each of which shall be met on such date as you and the Company shall
subsequently fix for the commencement of your obligations hereunder (the
"COMMENCEMENT DATE"):
(a) No litigation or proceeding shall be threatened or
pending to restrain or enjoin the issuance or delivery of the Notes, or
which in any way questions or affects the validity of the Notes. No
stop order suspending the effectiveness of the Registration Statement
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission. There shall have been
no material adverse change in the consolidated financial condition of
the Company and its subsidiaries, considered as a whole (a "MATERIAL
ADVERSE CHANGE"), from that set forth in the Registration Statement and
the Prospectus. You shall have received on the Commencement Date a
certificate of the Company dated such Commencement Date and signed by
an executive officer of the Company to the foregoing effect. The
officer signing such certificate may rely upon the best of his
knowledge as to proceedings threatened.
(b) You shall have received a favorable opinion of King &
Spalding LLP, counsel for the Company, dated the Commencement Date, to
the effect that:
(i) The Company is a corporation validly
existing and in good standing under the laws of the State of
Delaware with the corporate power and authority to own its
properties and conduct its business as described in the
Prospectus.
(ii) The Indenture has been duly authorized,
executed and delivered by the Company and constitutes a valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject, as to
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enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights and remedies of creditors generally and to the effect
of general principles of equity; and the Indenture has been
duly qualified under the Trust Indenture Act.
(iii) The Notes have been duly authorized and,
when the terms thereof have been established in accordance
with the Indenture and when executed, authenticated, issued
and delivered in the manner provided for in the Indenture
against payment therefor, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, subject as to enforcement of
remedies, to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights and remedies
of creditors generally and to the effect of general principles
of equity.
(iv) This Agreement has been duly authorized,
executed and delivered by the Company.
(v) No authorization, consent or approval of, or
registration or filing with, any governmental or public body
or regulatory authority is required on the part of the Company
for the issuance of the Notes in accordance with the Indenture
or the sale of the Notes in accordance with this Agreement
other than the registration of the Notes under the Securities
Act, qualification of the Indenture under the Trust Indenture
Act and compliance with the securities or Blue Sky laws of
various jurisdictions.
(vi) The statements in the Prospectus under the
captions "Description of Debt Securities", "Description of
Notes" and "Certain United States Federal Income Tax
Considerations", insofar as such statements constitute
summaries of the documents (or provisions thereof) or statutes
(or provisions thereof) referred to therein, fairly present
the information required to be described with respect to such
documents (or provisions thereof) or statutes (or provisions
thereof) and fairly summarize in all material respects such
documents (or provisions thereof) or statutes (or provisions
thereof).
(vii) The Indenture and the form of the Notes
conform in all material respects to the descriptions thereof
in the Prospectus.
(viii) The Registration Statement has become
effective under the Securities Act, and, to our knowledge, no
stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are
pending under the Securities Act.
(ix)(A) Each document, if any, filed pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and incorporated by reference in the Prospectus, when
such document was filed with the Commission, complied as to
form in all material respects with the Exchange Act and the
rules and
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regulations thereunder; and (B) the Registration Statement, as
of its effective date, and the Prospectus, as of its issue
date and the Commencement Date, complied as to form in all
material respects with the requirements of the Trust Indenture
Act and the Securities Act and the rules and regulations
thereunder (in each case other than the financial statements
and notes thereto, the financial statement schedules and the
other financial and statistical data and Form T-1 included or
incorporated by reference therein).
In addition, King & Spalding LLP shall state that, in its
capacity as counsel for the Company, it has rendered legal advice and
assistance in connection with the Company's preparation of the
Registration Statement and the Prospectus. Rendering such assistance
included, among other things, discussions and inquiries concerning
various legal matters, the review of certain documents, and
participating in conferences with officers and other representatives of
the Company, representatives of the Company's independent auditors and
representatives of the Agents and their counsel during which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and reviewed. Such counsel shall state that
although it is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, on the basis of the
information that was developed in the course of the performance of the
services referred to above, nothing came to their attention that causes
them to believe that (A) the Registration Statement (other than the
financial statements and notes thereto, the financial statement
schedules and the other financial and statistical data and the Form T-1
included or incorporated by reference therein), as of the latest
effective date thereof, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
(B) the Prospectus (other than the financial statements and notes
thereto, the financial statement schedules and the other financial and
statistical data included or incorporated by reference therein), as of
its issue date and as of the Commencement Date, contained or contains
any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(c) You shall have received a favorable opinion of
counsel in the Legal Department of the Company, reasonably satisfactory
to the Agents, dated the Commencement Date, to the effect that:
(i) The Company is duly qualified to do business
as a foreign corporation in good standing in each jurisdiction
in which it owns or leases material properties or in which the
conduct of its business requires such qualification and in
which the failure to so qualify would have a material adverse
effect on the Company and its subsidiaries considered as a
whole.
(ii) The execution and delivery of the Indenture,
the issuance of the Notes in accordance with the Indenture and
the sale of the Notes pursuant to this Agreement: (A) do not
and will not result in any violation of the certificate of
incorporation or bylaws of the Company; (B) to such counsel's
knowledge, do not
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and will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
agreement or other instrument binding upon the Company or any
subsidiary of the Company that is a "significant subsidiary"
as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act (each, a "SIGNIFICANT SUBSIDIARY") that is
material to the Company and its subsidiaries considered as a
whole; and (C) do not and will not result in a violation of
any existing material law, rule or regulation applicable to
the Company or any of its subsidiaries or any material
judgment, order, writ, injunction or decree known to such
counsel of any governmental authority or court having
jurisdiction over the Company or any of its subsidiaries.
(iii) The Company has the corporate power and
authority to authorize, issue and sell the Notes as
contemplated by this Agreement.
(iv) The statements in the (A) documents
incorporated by reference into the Prospectus under the
captions "Government Regulation" and "Legal Proceedings" in
the Company's most recently filed Annual Report on Form 10-K
and Part II, Item 1 of the Company's subsequently filed
Quarterly Reports on Form 10-Q, if any (or comparable
paragraphs under the caption "Liquidity and Capital Resources"
in Part I, Item 2 of such Quarterly Reports on Form 10-Q, as
the case may be), and (B) the Registration Statement under
Item 15, insofar as such statements purport to constitute
summaries of the documents (or provisions thereof), statutes
(or provisions thereof) or legal proceedings referred to
therein, fairly present the information required to be
described with respect to such documents (or provisions
thereof), statutes (or provisions thereof) or legal
proceedings and fairly summarize in all material respects such
documents (or provisions thereof), statutes (or provisions
thereof), or legal proceedings.
(v) To such counsel's knowledge, there are no
(A) legal or governmental proceedings pending or threatened to
which the Company or any Significant Subsidiary is a party, or
to which any of the properties of the Company or any
Significant Subsidiary is subject, that are required to be
described in the Registration Statement or the Prospectus and
are not so described or (B) statutes, regulations or contracts
that are required to be described in the Registration
Statement or the Prospectus or contracts that are required to
be filed as exhibits to the Registration Statement that are
not described or filed as required.
(d) You shall have received on the Commencement Date a
letter dated the Commencement Date from Deloitte & Touche LLP,
independent auditors, containing statements and information of the type
ordinarily included in auditors' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained in or incorporated by reference into the Registration
Statement and the Prospectus.
(e) You shall have received a favorable opinion of
Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the Agents, dated such
Commencement Date, to the effect set forth in
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Section II(b) in clauses (ii), (iii), (iv),(vii) and (ix)(B) and
subsection (B) of the paragraph following clause (ix).
(f) You shall have received a certificate of the
secretary or assistant secretary of the Company as to the Certificate
of Incorporation of the Company, the Bylaws of the Company and the
resolutions authorizing the issuance and sale of the Notes and certain
related matters.
The obligations of the Purchasing Agent to purchase Notes as principal,
both under this Agreement and under any Terms Agreement, are subject to the
conditions that: (i) no litigation or proceeding shall be pending or, to the
Company's knowledge, threatened to restrain or enjoin the issuance or delivery
of the Notes, or which in any way questions or affects the validity of the
Notes; (ii) no stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall be
pending before or, to the Company's knowledge, threatened by the Commission; and
(iii) there shall have been no Material Adverse Change in the consolidated
financial condition of the Company and its subsidiaries, considered as a whole,
from that set forth in the Registration Statement and the Prospectus, each of
which conditions shall be met on the corresponding Settlement Date (as defined
in Section IV(b) hereof). Further, if specifically called for by any written
agreement by the Purchasing Agent to purchase Notes as principal, the Purchasing
Agent's obligations hereunder and under such agreement shall be subject to such
of the additional conditions set forth in clause (a), as it relates to the
executive officer's certificate, and clauses (b), (c), (d) and (e) above, as
agreed to by the parties, each of which such agreed conditions shall be met on
the corresponding Settlement Date.
III.
In further consideration of your agreements herein contained, the
Company covenants as follows:
(a) The Company will furnish you, without charge, a copy
of (i) the Indenture, (ii) the resolutions of the Board of Directors
(or the Executive Committee) of the Company authorizing the issuance
and sale of the Notes, certified by the Secretary or Assistant
Secretary of the Company as having been duly adopted, (iii) the
Registration Statement including exhibits and documents incorporated by
reference therein, and (iv) as many copies of the Prospectus, any
documents incorporated by reference therein, and any supplements and
amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus (other than amendments or supplements to
change interest rates and other than amendments or supplements in the
form of the Company's periodic filings to be filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that
are incorporated by reference in the Prospectus), the Company will
furnish you a copy of each such proposed amendment or supplement and
afford you a reasonable opportunity to comment on any such proposed
amendment or supplement.
(c) The Company will furnish you copies of each amendment
to the Registration Statement and of each amendment and supplement to
the Prospectus in such
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quantities as you may from time to time reasonably request. If at any
time when the delivery of a Prospectus shall be required by law in
connection with sales of any of the Notes, either (i) any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading or (ii) for any other reason it shall be necessary
to amend or supplement the Prospectus as then amended or supplemented
or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act
or the Exchange Act, the Company will (A) notify you to suspend the
solicitation of offers to purchase Notes and if notified by the
Company, you shall forthwith suspend such solicitation and cease using
the Prospectus as then amended or supplemented and (B) if the Company
notifies you that it would like you to resume the solicitation of
offers to purchase Notes, promptly prepare and file with the Commission
such document incorporated by reference in the Prospectus or an
amendment or supplement to the Registration Statement or the Prospectus
which will correct such statement or omission or effect such compliance
and will provide to you without charge a reasonable number of copies
thereof, which you shall use thereafter.
(d) The Company will endeavor to qualify such Notes for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and will pay all
reasonable expenses (including fees and disbursements of counsel) in
connection with such qualification; provided, that, in connection
therewith the Company shall not be required to qualify as a foreign
corporation to do business, or to file a general consent to service of
process, in any jurisdiction.
(e) The Company will make generally available to its
security holders and to you as soon as practicable earning statements
that satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder covering 12
month periods beginning, in each case, not later than the first day of
the Company's fiscal quarter next following the "effective date" (as
defined in Rule 158 under the Securities Act) of the Registration
Statement with respect to each sale of Notes.
(f) If the Company and the Purchasing Agent mutually
agree to list Notes on any stock exchange (a "STOCK EXCHANGE"):
(i) The Company will use its reasonable efforts,
in cooperation with the Purchasing Agent, to cause such Notes
to be accepted for listing on any such Stock Exchange, in each
case as the Company and the Purchasing Agent shall deem to be
appropriate. In connection with any such agreement to list
Notes on a Stock Exchange, the Company shall use its
reasonable efforts to obtain such listing promptly and shall
furnish any and all documents, instruments, information and
undertakings that may be reasonably necessary or advisable in
order to obtain and maintain the listing.
(ii) So long as any Note remains outstanding and
listed on a Stock Exchange, if the Prospectus as then amended
or supplemented would include any
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untrue statement of a material fact or omit to state any
material fact relating to any matter described in the
Prospectus the inclusion of which was required by the listing
rules and regulations of such Stock Exchange on which any
Notes are listed (the "LISTING RULES") or by such Stock
Exchange, the Company will provide to the Purchasing Agent
information about the change or matter and to amend or
supplement the Prospectus in order to comply with the Listing
Rules or as otherwise requested by the Stock Exchange.
(iii) The Company will use reasonable efforts to
comply with any undertakings given by it from time to time to
any Stock Exchange on which any Notes are listed.
(g) The Company promptly will notify the Purchasing Agent
in writing in the event that the Company does not have a security
listed on the New York Stock Exchange.
(h) The Company will notify the Agents immediately, and
confirm such notice in writing, of any change in the rating assigned by
any nationally recognized statistical rating organization, as such term
is defined in Rule 436(g)(2) under the Securities Act, to the
Medium-Term Note Program under which the Notes are issued (the
"PROGRAM") or any debt securities (including the Notes) of the Company,
or the public announcement by any nationally recognized statistical
rating organization that it has under surveillance or review, with
possible negative implications, its rating of the Program or any such
debt securities, or the withdrawal by any nationally recognized
statistical rating organization of its rating of the Program or any
such debt securities.
IV.
(a) Solicitations as Agent. You hereby agree, as Agents hereunder,
to use your reasonable best efforts to solicit and receive offers to purchase
Notes upon the terms and conditions set forth herein and in the Prospectus and
upon the terms communicated to you from time to time by the Company. For the
purpose of such solicitation you will use the Prospectus as then amended or
supplemented which has been most recently distributed to you by the Company, and
you will solicit offers to purchase only as permitted or contemplated thereby
and herein. The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase Notes at any time for any period of time or
permanently. Upon receipt of notice of any such suspension (which may be given
orally) from the Company, you will as soon as practicable, but in any event no
later than one business day after receipt of such instructions, suspend
solicitation of offers to purchase until such time as the Company has advised
you that such solicitation may be resumed. In addition, the Company reserves the
right to sell, and may solicit and accept offers to purchase, up to $50,000,000
aggregate principal amount of Notes directly on its own behalf in up to ten
separate transactions; and, in the case of any such sale not resulting from a
solicitation made by any Agent, no Concession (as defined below) will be payable
with respect to such sale.
You are authorized to solicit orders for the Notes only in
denominations of $1,000 or more (in multiples of $1,000). You are not authorized
to appoint subagents or to engage the service of any other broker or dealer in
connection with the offer or sale of the Notes without the
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consent of the Company; provided, however, the Purchasing Agent may engage the
service of any other broker or dealer without the consent of the Company. The
Purchasing Agent, however, on a periodic basis, will provide the Company with a
list of those brokers or dealers so engaged. In addition, unless otherwise
instructed by the Company, the Purchasing Agent shall communicate to the
Company, orally or in writing, the aggregate amount of each offer to purchase
each proposed series or issuance of Notes. The Company shall have the sole right
to accept offers to purchase Notes offered through you and may reject any
proposed purchase of Notes as a whole or in part. You shall have the right, in
your discretion reasonably exercised, to reject any proposed purchase of Notes,
as a whole or in part, and any such rejection shall not be deemed a breach of
your agreements contained herein.
The Company agrees to pay the Purchasing Agent, as consideration for
soliciting the sale of the Notes, a concession in the form of a discount equal
to the percentages of the principal amount of each Note sold not in excess of
the concession set forth in Exhibit A (the "CONCESSION"). Notwithstanding the
foregoing, for Notes that bear a zero interest rate and are issued at a
substantial discount from the principal amount payable at the Maturity Date (a
"ZERO-COUPON NOTE"), the Company agrees to pay the Purchasing Agent, as
consideration for soliciting the sale of the Zero-Coupon Notes, a Concession in
the form of a discount equal to the percentages of the initial offering price of
each Zero-Coupon Note sold not in excess of the Concession set forth in Exhibit
A. The Purchasing Agent and the other Agents will share the Concession in such
proportions as they may agree.
Except as provided in Section IV(b) hereof, in soliciting offers to
purchase Notes from the Company, you are acting solely as agent for the Company
and not as principal. When acting on behalf of the Company on an agency basis,
you will make reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Notes has been accepted by the
Company, but you shall not have any liability to the Company in the event such
purchase is not consummated for any reason, other than to repay to the Company
any Concession with respect thereto.
(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement and a
separate agreement, substantially in the form of Exhibit C, to be entered into
on behalf of such Agent(s) by the Purchasing Agent, which will provide for the
sale of such Notes to, and the purchase and reoffering thereof by, the
Purchasing Agent as principal. Each such separate agreement (which may be an
oral agreement and confirmed in writing as described below between the
Purchasing Agent and the Company) is herein referred to as a "TERMS AGREEMENT".
A Terms Agreement may also specify certain provisions relating to the reoffering
of such Notes by the Purchasing Agent. The Purchasing Agent's agreement to
purchase Notes pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations, warranties and agreements of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Except pursuant to a Terms Agreement, under no circumstances shall you be
obligated to purchase any Notes for your own account. Each Terms Agreement,
whether oral (and confirmed in writing which may be by facsimile transmission)
or in writing, shall describe the Notes to be purchased pursuant thereto by the
Purchasing Agent as principal, and may specify, among other things, the
principal amount of Notes to be purchased, the interest rate or formula and
maturity date or dates of such Notes, the interest payment dates, if any, the
price to be paid to the Company for such Notes, the initial
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public offering price at which the Notes are proposed to be reoffered, and the
time and place of delivery of and payment for such Notes (the "SETTLEMENT
DATE"), whether the Notes provide for a survivor's option or for optional
redemption by the Company and on what terms and conditions, and any other
relevant terms.
In connection with the resale of the purchased Notes, you are not
authorized, without the consent of the Company, to appoint subagents or to
engage the service of any other broker or dealer, nor may you reallow any
portion of the discount paid to you by the Company in excess of the designated
reallowance portion; provided, however, that the Purchasing Agent may engage the
service of any other broker or dealer without the consent of the Company. The
Purchasing Agent however, on a periodic basis, will provide the Company with a
list of those brokers or dealers so engaged. Unless authorized by the Purchasing
Agent in each instance, no Agent will purchase and sell Notes for which an order
from a client has not been received.
Each purchase of Notes by the Purchasing Agent from the Company shall
be at a discount from the principal amount of each such Note on the date of
issue not in excess of the applicable Concession set forth in Exhibit A.
Notwithstanding the foregoing, for Zero-Coupon Notes, each purchase of
Zero-Coupon Notes by the Purchasing Agent from the Company shall be at a
discount from the initial offering price of each such Note on the date of issue
not in excess of the applicable Concession set forth in Exhibit A.
(c) Public Offering Price. Unless otherwise authorized by the
Company, all Notes, other than Zero Coupon Notes, shall be sold to the public at
a purchase price not to exceed 100% of the principal amount thereof, plus
accrued interest, if any. Zero-Coupon Notes shall be sold to the public at a
purchase price no greater than an amount, expressed as a percentage of the
principal face amount of such Notes, equal to (i) the net proceeds to the
Company on the sale of such Notes, plus (ii) the Concession, plus (iii) accrued
interest, if any. Such purchase price shall be set forth in the confirmation
statement of the Selling Group (as defined in Exhibit B) member responsible for
such sale, and delivered to the purchaser along with a copy of the Prospectus
(if not previously delivered) and Pricing Supplement.
(d) Procedures. Procedural details relating to the issue and
delivery of, and the solicitation of offers to purchase and payment for, the
Notes, whether under Section IV(a) or IV(b), are set forth in the Administrative
Procedures attached hereto as Exhibit B, as amended from time to time (the
"PROCEDURES"). The provisions of the Procedures shall apply to all transactions
contemplated hereunder. You and the Company each agree to perform the respective
duties and obligations specifically provided to be performed by each in the
Procedures. The Procedures may only be amended by written agreement of the
Company and each of you.
(e) Prospectus Delivery. You shall, as required by applicable law,
furnish to each person to whom you sell or deliver Notes a copy of the
Prospectus (as then amended or supplemented) or, if delivery of the Prospectus
is not required by applicable law, inform each such person that a copy thereof
(as then amended or supplemented) will be made available upon request. You are
not authorized to give any information or to make any representation not
contained in the Prospectus or the documents incorporated by reference or
specifically referred to therein in connection with the offer and sale of the
Notes. You will not use any marketing
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materials other than the Prospectus in connection with any offer or sale of the
Notes except for marketing materials prepared by the Company, if any, and
furnished to you together with written authorization from the Company to the
Purchasing Agent to use the same hereunder. If you elect to distribute these
additional marketing materials under the so called "free writing" exemption
embodied in Section 2(10)(a) of the Securities Act (any such marketing
materials, "FREE WRITING MATERIALS"), you will use your best efforts to ensure
that any intended recipients of such Free Writing Materials receive a Prospectus
either prior to or concurrently with their receipt of the Free Writing
Materials. The Company hereby grants the Purchasing Agent a limited,
non-exclusive, non-sublicenseable, non-assignable, revocable worldwide right and
license to use the Company's name and logo (the "Logo") as displayed on Exhibit
F in "Marketing Materials" that include only (i) brochures and (ii) the
Purchasing Agent's website to identify the Company as a member of the Direct
Access Notes Program in the Purchasing Agent's general materials and marketing
objectives relating to the Direct Access Notes Program (the "MARKETING
MATERIALS"). The Purchasing Agent shall not use the Company's name or Logo
unless approved in writing by the Company prior to their use. Any approvals from
or authorizations by the Company under this Section IV(e) may be transmitted
electronically by the Company to the Purchasing Agent. The Purchasing Agent
understands and agrees that the rights granted by the Company to use and display
the Company's name and Logo convey to the Purchasing Agent no greater rights
than those expressly stated herein and that, in particular, the Purchasing Agent
shall at no time acquire any legal or equitable right, title or interest of any
sort in the Company's name and Logo or in the use thereof. Unless terminated
earlier, the Purchasing Agent's right to use the Company's name and Logo shall
cease upon the end of the term of this Agreement.
(f) Compliance With Laws. The Purchasing Agent is aware that other
than registering the Notes under the Securities Act, no action has been or will
be taken by the Company that would permit the offer, sale or purchase of the
Notes or possession or distribution of the Prospectus or any other offering
material relating to the Notes in any jurisdiction where action for that purpose
is required. Accordingly, the Purchasing Agent agrees that it will obtain any
consent, approval or permission required for the offer, sale or purchase by it
of Notes under the laws and regulations in force in any such jurisdiction to
which it is subject or in which it makes such offer, sale or purchase.
V.
The Company represents and warrants to the Agents that as of the date
hereof, as of each date on which the Company accepts an offer to purchase Notes
(including any purchase by the Purchasing Agent as principal, pursuant to a
Terms Agreement or otherwise), as of each date the Company issues and sells
Notes:
(a)(i) Each document, if any, filed, or to be filed,
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied as to form when so filed, or will comply as to
form, in all material respects with the Exchange Act and the rules and
regulations thereunder; (ii) the Registration Statement, as of the
latest effective date thereof, did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(iii) each Prospectus, if any, filed pursuant to Rule 424 under the
Securities Act, complied as to form when so filed in all material
respects with the Securities Act and
11
the applicable rules and regulations thereunder; (iv) the Registration
Statement and each Prospectus comply as to form and, as amended or
supplemented, if applicable, will comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations thereunder; (v) the Registration Statement and any
amendment thereto, as of the applicable effective date of the
Registration Statement or any such amendment, did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and (vi) the Prospectus and any amendment or supplement
thereto, as of the date of the Prospectus or any such amendment or
supplement, do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to (i) any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by any Agent expressly for use in the Prospectus as
amended or supplemented relating to the Notes or (ii) the Statement of
Eligibility on Form T-1 of the Trustee.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified or in good
standing in any such jurisdiction.
(c) The Company has an authorized capitalization as set
forth in the financial statements incorporated by reference in the
Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable.
(d) The Notes have been duly authorized and, when the
terms thereof have been established in accordance with the Indenture
and when executed, authenticated, issued and delivered in the manner
provided for in the Indenture against payment therefor, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject, as to enforcement of
remedies, to bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights and remedies of creditors generally
and to the effect of general principles of equity. The Indenture has
been duly authorized, executed and delivered by the Company and
constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject, as to
enforcement of remedies, to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights and remedies of
creditors generally and to the effect of general principles of equity.
The Indenture has been duly qualified under the Trust Indenture Act.
The Indenture conforms and the Notes of any particular issuance of
Notes will conform in all material respects to the descriptions thereof
contained in the Prospectus as amended or supplemented that relate to
such Notes.
12
(e) Other than as set forth in the Prospectus, the
Company and each of its subsidiaries have conducted their businesses
and are in compliance in all material respects with all applicable
federal and state laws and regulations, except for any conduct or
noncompliance which would not have a material adverse effect on the
Company and its subsidiaries considered as a whole.
(f) The issue and sale of the Notes, the compliance by
the Company with the provisions of the Notes, the Indenture, this
Agreement and any Terms Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under: (i) the Certificate of Incorporation or
By-Laws of the Company; (ii) any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject; or (iii) any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties,
except for such conflicts, breaches, violations or defaults under
subsections (ii) or (iii) that would not result in a material adverse
effect on the Company and its subsidiaries considered as a whole. No
consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for the
issue and sale of the Notes or the consummation by the Company of the
other transactions contemplated by this Agreement, any Terms Agreement
or the Indenture, except such as have been obtained, or will have been
obtained prior to the Commencement Date, under the Securities Act or
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws.
(g) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending or, to the Company's
knowledge, threatened to which the Company or any of its subsidiaries
is a party or to which any property of the Company or any of its
subsidiaries is subject, which are of a character that are required to
be disclosed in the Prospectus which have not been disclosed therein as
required.
(h) Immediately after any sale of Notes by the Company
hereunder or under any Terms Agreement, the aggregate amount of Notes
which shall have been issued and sold by the Company hereunder or under
any Terms Agreement and of any other debt securities of the Company
(other than such Notes) that shall have been issued and sold pursuant
to the Registration Statement will not exceed the amount of debt
securities registered under the Registration Statement.
(i) The Company is not, and, after giving effect to the
offering and sale of the Notes and the application of the proceeds
thereof as described in the Prospectus, the Company will not be,
required to register as an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(j) The Program, as well as the Notes, are rated Aaa by
Xxxxx'x Investors Service, Inc. and AAA by Standard & Poor's Ratings
Services, or, after the Commencement
13
Date, such other rating as to which the Company shall have most
recently notified the Agents pursuant to Section III(h) hereof.
The above representations and warranties shall not apply to any
statements or omissions made in the Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by you expressly
for use therein. Each acceptance by the Company of an offer for the purchase of
Notes and each issuance of Notes shall be deemed an affirmation by the Company
that the foregoing representations and warranties are true and correct at the
time, as the case may be, of such acceptance or of such issuance, in each case
as though expressly made at such time. The representations, warranties and
covenants of the Company shall survive the execution and delivery of this
Agreement and the issuance and sale of the Notes.
Unless the Company has suspended the solicitation of offers to purchase
Notes pursuant to Section IV(a), each time the Registration Statement shall be
amended by the filing of a post-effective amendment or a Form 10-K or Form 10-Q
pursuant to Section 13 of the Exchange Act, or if agreed to by the Company in
connection with a particular sale of Notes, the Company shall furnish the Agents
with: (i) a written opinion, dated the date of such amendment, filing or as
otherwise agreed, of counsel to the Company, in substantially the form
previously delivered under Sections II(b) and II(c), but modified, as necessary,
to relate to the Registration Statement and the Prospectus as amended or
supplemented at such date; (ii) a letter, dated the date of such amendment,
filing or as otherwise agreed, of Deloitte & Touche LLP, independent auditors,
in substantially the form previously delivered under Section II(d), but
modified, as necessary, to relate to the Registration Statement and the
Prospectus as amended or supplemented at such date; and (iii) a certificate,
dated the date of such amendment, filing or as otherwise agreed and signed by an
executive officer of the Company, in substantially the form previously delivered
under Section II(a), but modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended or supplemented at such date.
VI.
(a) The Company agrees to indemnify and hold harmless you, each
person, if any, who controls (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) you and each of your and such
person's officers and directors against any and all losses, liabilities, costs
or claims (or actions in respect thereof) to which any of them may become
subject (including all reasonable legal and other costs of investigating,
disputing or defending any such claim or action), insofar as such losses,
liabilities, costs or claims (or actions in respect thereof) arise out of or in
connection with any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any Prospectus, or any amendment
or supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading provided, however: (i) that the Company shall not be
liable for any such loss, liability, cost, claim or action arising from any
statements or omissions made in reliance on and in conformity with written
information provided by you to the Company expressly for use in the Registration
Statement or Prospectus or any amendment or supplement thereto; and (ii) that
the Company shall not be liable to you or any person controlling you with
respect to the Prospectus to the extent any such loss, liability, cost, action
or claim to you or such controlling person results from the fact that you sold
Notes to a person to whom there was not sent or given, at or prior to the
14
earlier of either the mailing or delivery of the written confirmation of such
sale or the delivery of such Notes to such person, a copy of the Prospectus as
then amended or supplemented, if the Company has previously furnished copies
thereof to you.
(b) Each Agent severally agrees to indemnify and hold harmless the
Company, each person, if any, who controls (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act) the Company and the
Company's and such person's officers and directors from and against any and all
losses, liabilities, costs or claims (or actions in respect thereof) to which
any of them may become subject (including all reasonable legal and other costs
of investigating, disputing or defending any such claim or action), insofar as
such losses, liabilities, costs or claims (or actions in respect thereof) (i)
arise out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
Prospectus, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, in each case only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance on and in conformity with written information furnished to the
Company by such Agent expressly for use therein or (ii) arise solely from the
use by such Agent of Free Writing Materials that are not preceded by or
accompanied with a copy of the Prospectus.
(c) If any claim, demand, action or proceeding (including any
governmental investigation) shall be brought or alleged against an indemnified
party in respect of which indemnity is to be sought against an indemnifying
party pursuant to the preceding paragraphs, the indemnified party shall,
promptly after receipt of notice of the commencement of any such claim, demand,
action or proceeding, notify the indemnifying party in writing of the
commencement of such claim, demand, action or proceeding, enclosing a copy of
all papers served, if any; provided, that, the omission to so notify such
indemnifying party will not relieve the indemnifying party from any liability
that it may have to any indemnified party under the foregoing provisions of this
Section VI unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. In case
any such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section VI for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the reasonable fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the indemnifying party has assumed the defense
of such proceeding and has failed within a reasonable time to retain counsel
reasonably satisfactory to such indemnified party or (iii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or
15
potential conflicts of interests between them. It is agreed that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate law firm (in addition to local counsel where
reasonably necessary) for all such indemnified parties. Such firm shall be
designated in writing by the indemnified party. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement (i) includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding; and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section VI is
unavailable to or insufficient to hold harmless an indemnified party under the
preceding paragraphs of this Section VI in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Notes to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Notes (before deducting
expenses) received by the Company bear to the total commissions or discounts
received by such Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the Company
on the one hand or by any Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to this Section VI(d) were
determined by per capita allocation (even if all Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
VI(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this Section VI(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this
16
Section VI(d), no Agent shall be required to contribute any amount in excess of
the amount by which the total public offering price at which the Notes purchased
by it in the offering giving rise to the damages were sold exceeds the amount of
any damages which such Agent has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of each
of the Agents under this Section VI(d) to contribute are several in proportion
to the respective purchases made by or through it to which such loss, claim,
damage or liability (or action in respect thereof) relates and are not joint.
(e) The indemnity and contribution agreements contained in this
Section VI and the representations and warranties of the Company and you in this
Agreement shall remain operative and in full force and effect regardless of: (i)
any termination of this Agreement; (ii) any investigation made by or on behalf
of the Agents; (iii) any investigation by an indemnified party or on such
party's behalf or any person controlling an indemnified party or by or on behalf
of the indemnifying party, its directors or officers or any person controlling
the indemnifying party; and (iv) acceptance of and payment for any of the Notes.
VII.
This Agreement may be terminated at any time by the Agents, on the one
hand, or the Company, on the other hand, upon the giving of five business days
written notice of such termination to the other party. In the event of any such
termination, neither party shall have any liability to the other party, except
for obligations hereunder which expressly survive the termination of this
Agreement and except that, if at the time of termination an offer for the
purchase of Notes shall have been accepted by the Company but the time of
delivery to the purchaser or his agent of the Note or Notes relating thereto
shall not yet have occurred, the Company shall have the obligations provided
herein with respect to such Note or Notes.
Subsequent to the execution of a Terms Agreement, (i) the Purchasing
Agent may terminate such Terms Agreement and (ii), if the Purchasing Agent does
not elect to terminate such Terms Agreement pursuant to clause (i) of this
sentence, upon the request of an Agent with respect to Notes to be purchased
through the Purchasing Agent by such Agent, the Purchasing Agent shall terminate
such Terms Agreement to the extent of the Notes that were to be purchased
through the Purchasing Agent by such requesting Agent, in each case immediately
upon notice to the Company, at any time prior to the Settlement Date relating
thereto, if there shall have occurred any:
(i) change in the long-term debt of the Company or any
change, or any development involving a prospective change, in the
financial condition or in the earnings, business or operations of the
Company, otherwise than as set forth or contemplated in the Prospectus,
the effect of which is, in the judgment of the Purchasing Agent or such
requesting Agent, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering of such Notes or
enforce contracts for the sale of such Notes; or
17
(ii) downgrading in the rating of the Company's debt
securities (including the Notes) by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Securities Act) or public announcement by any such
organization that it has under surveillance or review, with possible
negative implications, its rating of such debt securities; or
(iii) banking moratorium declared by Federal or New York
authorities, or the authorities of any country in whose currency any
Notes are denominated under the applicable Terms Agreement; or
(iv) outbreak or escalation of hostilities in which the
United States or any country in whose currency any Notes are
denominated under the applicable Terms Agreement is involved, any
declaration of war by Congress, any material adverse change in
financial markets or any other substantial national or international
calamity or emergency if, in the judgment of the Purchasing Agent or
such requesting Agent, the effect of any such outbreak, escalation,
material adverse change, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with the public offering of such
Notes or enforce contracts for the sale of such Notes; or
(v) action by any governmental authority or any change,
or any development involving a prospective change, involving currency
exchange rates or exchange controls, which makes it impracticable or
inadvisable in the judgment of the Purchasing Agent or such requesting
Agent to proceed with the public offering of such Notes or enforce
contracts for the sale of such Notes.
If this Agreement is terminated, the last sentence of the second
paragraph of Section IV(a), Section III(c), (d) and (e), Section VI, and the
first paragraph of Section XII shall survive; provided, that, if at the time of
termination of this Agreement an offer to purchase Notes has been accepted by
the Company but the time of delivery to the purchaser or its agent of such Notes
has not occurred, the provisions of Section III(a) and (b), and Section IV(b)
and (d) shall also survive until time of delivery.
VIII.
Except as otherwise specifically provided herein, all statements,
requests and notices hereunder shall be in writing, or by telephone if promptly
confirmed in writing, and if to you shall be sufficient in all respects if
delivered in person or sent by facsimile transmission (confirmed in writing), or
registered mail to you at your address, telecopier number set forth below by
your signature and if to the Company shall be sufficient in all respects if
delivered or sent by telecopier or registered mail to the Company at 00 Xxxxxxxx
Xxxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Legal Department, telecopier
number (000) 000-0000. All such notices shall be effective on receipt.
IX.
This Agreement shall be binding upon each of you and the Company, and
inure solely to the benefit of you and the Company and any other person
expressly entitled to indemnification
18
hereunder and the respective personal representatives, successors and assigns of
each, and no other person shall acquire or have any rights under or by virtue of
this Agreement.
X.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. Each party to this Agreement irrevocably
agrees that any legal action or proceeding against it arising out of or in
connection with this Agreement or for recognition or enforcement of any judgment
rendered against it in connection with this Agreement may be brought in any
Federal or New York State court sitting in the Borough of Manhattan. By
execution and delivery of this Agreement, such party hereby irrevocably accepts
and submits to the jurisdiction of each of the aforesaid courts in personam,
generally and unconditionally with respect to any such action or proceeding for
itself and in respect of its property, assets and revenues. Each party hereby
also irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of venue of any such action or
proceeding brought in any such court and any claim that any such action or
proceeding has been brought in an inconvenient forum.
XI.
If this Agreement is executed by or on behalf of any party, such person
hereby states that at the time of the execution of this Agreement he has no
notice of revocation of the power of attorney by which he has executed this
Agreement as such attorney.
XII.
The Company will pay the expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and filing of
the Registration Statement; (ii) the preparation, issuance and delivery of the
Notes; (iii) the fees and disbursements of the Company's counsel and auditors,
of the Trustee and its counsel and of any paying or other agents appointed by
the Company; (iv) the printing and delivery to you in quantities as hereinabove
stated of copies of the Registration Statement and the Prospectus; (v) the
reasonable fees and disbursements of Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for
the Agents (including "Blue Sky" fees and disbursements, if any); (vi) if the
Company lists Notes on a securities exchange, the costs and fees of such
listing; and (vii) any fees charged by rating agencies for the rating of the
Notes.
This Agreement may be executed by each of the parties hereto in any
number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
As used herein, "business day" means any day other than a Saturday,
Sunday or any day on which banking institutions are authorized or required by
law, regulation or executive order to be closed in the City of New York.
19
If the foregoing is in accordance with your understanding, please sign
and return to us a counterpart hereof, and upon acceptance hereof by you, this
letter and such acceptance hereof shall constitute a binding agreement between
the Company and you.
Very truly yours,
UNITED PARCEL SERVICE, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
Title: Auth. Rep.
Confirmed and accepted
as of the date first above written:
ABN AMRO FINANCIAL SERVICES, INC.
By: /s/ W. Xxxx Xxxxxx
-----------------------------------
Name: W. Xxxx Xxxxxx
Title: Senior Vice President
ABN AMRO Financial Services, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Product Origination
Telefax: ________________________
XXXXXXX XXXXXX & CO., INC.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, Fixed Income
Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: X. Xxxxxxxx
Telefax: ________________________
20
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxxxxxx X. Xxxxxx XX
------------------------------
Name: Xxxxxxxx X. Xxxxxx XX
Title: Vice President
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: MTN Department
Telefax:
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Authorized Signatory
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Xxxxxx, Xxxxx 00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Transaction Management Group
Telefax:
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxxxx III
------------------------------
Name: Xxxxxx X. Xxxxxxxxxx III
Title: Executive Director
Xxxxxx Xxxxxxx
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Continuously Offered Products
Telefax:
21
UBS FINANCIAL SERVICES INC.
By: /s/ Xxxxx XxXxxxx
---------------------------------
Name: Xxxxx XxXxxxx
Title: Senior Vice President
UBS Financial Services Inc.
000 Xxxxxx Xxxx.
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Taxable Fixed Income Department -- Corporate Desk
Telefax:
WACHOVIA SECURITIES LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
Wachovia Securities LLC
000 Xxxx Xxxx Xxxxxx
Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Retail Taxable Fixed Income
Telefax:
22
SCHEDULE I
Names of Agents
ABN AMRO Financial Services, Inc.
Xxxxxxx Xxxxxx & Co., Inc.
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
UBS Financial Services Inc.
Wachovia Securities LLC
EXHIBIT A
UPS Notes
UNITED PARCEL SERVICE, INC.
DEALER AGENT PROGRAM
The following Concessions are payable as a percentage of the Price to Public of
each note sold to or through the Purchasing Agent and will not exceed the
amounts listed below.
9 months to less than 23 months.......................... 0.600%
23 months to less than 35 months......................... 0.850%
35 months to less than 47 months......................... 1.375%
47 months to less than 59 months......................... 1.625%
59 months to less than 71 months......................... 2.000%
71 months to less than 83 months......................... 2.250%
83 months to less than 95 months......................... 2.250%
95 months to less than 107 months........................ 2.375%
107 months to less than 119 months....................... 2.375%
119 months to less than 131 months....................... 2.500%
131 months to less than 143 months....................... 2.750%
143 months to less than 179 months....................... 3.250%
179 months to less than 239 months....................... 3.500%
239 months to 360 months................................. 5.000%
A-1
EXHIBIT B
UNITED PARCEL SERVICE, INC.
UPS Notes
WITH MATURITIES OF 9 MONTHS OR MORE FROM DATE OF ISSUE
ADMINISTRATIVE PROCEDURES
UPS Notes with maturities of nine months or more from date of issue (the
"NOTES") are offered on a continuing basis by United Parcel Service, Inc. The
Notes will be offered by ABN AMRO Financial Services, Inc. (the "PURCHASING
AGENT"), Xxxxxxx Xxxxxx & Co., Inc., Citigroup Global Markets Inc., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated,
UBS Financial Services Inc., Wachovia Securities LLC (collectively, the
"AGENTS") pursuant to a Selling Agent Agreement among the Company and the Agents
dated as of the date hereof (the "SELLING AGENT AGREEMENT") and one or more
terms agreements substantially in the form attached to the Selling Agent
Agreement as Exhibit C (each a "TERMS AGREEMENT"). The Notes are being resold by
the Purchasing Agent (and by any Agent that purchases them from the Purchasing
Agent) to (i) customers of the Agents or (ii) selected broker-dealers (the
"SELLING GROUP") for distribution to their customers pursuant to a Master
Selected Dealers Agreement (a "DEALERS AGREEMENT") attached hereto as Exhibit E.
The Agents have agreed to use their reasonable best efforts to solicit offers to
purchase Notes. The Notes will be senior debt and have been registered with the
Securities and Exchange Commission (the "COMMISSION"). Citibank, N.A. is trustee
(the "TRUSTEE") under an Indenture, dated as of August 26, 2003, between the
Company and the Trustee (the "INDENTURE") covering the Notes. Pursuant to the
terms of the Indenture, Citibank, N.A. also will serve as authenticating agent,
issuing agent and paying agent.
Each tranche of Notes will be issued in book-entry form and represented by one
or more fully registered global notes without coupons (each, a "GLOBAL NOTE")
held by the Trustee, as agent for the Depository Trust Corporation ("DTC") and
recorded in the book-entry system maintained by DTC. Each Global Note will have
the annual interest rate, maturity and other terms set forth in the relevant
Pricing Supplement (as defined in the Selling Agent Agreement). Owners of
beneficial interests in a Global Note will be entitled to physical delivery of
Notes issued in certificated form equal in principal amount to their respective
beneficial interests only upon certain limited circumstances described in the
Indenture.
Administrative procedures and specific terms of the offering are explained
below. Administrative responsibilities will be handled for the Company by its
Treasury Department; accountable document control and record-keeping
responsibilities will be performed by its Legal Department. The Company will
advise the Agents and the Trustee in writing of those persons handling
administrative responsibilities with whom the Agents and the Trustee are to
communicate regarding offers to purchase Notes and the details of their
delivery.
Notes will be issued in accordance with the administrative procedures set forth
herein. To the extent the procedures set forth below conflict with or omit
certain of the provisions of the Notes,
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the Indenture, the Selling Agent Agreement or the Prospectus and the Pricing
Supplement (together, the "PROSPECTUS"), the relevant provisions of the Notes,
the Indenture, the Selling Agent Agreement and the Prospectus shall control.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Selling Agent Agreement, the Prospectus in the
form most recently filed with the Commission pursuant to Rule 424 of the
Securities Act, or the Indenture.
ADMINISTRATIVE PROCEDURES FOR NOTES
In connection with the qualification of Notes for eligibility in the book-entry
system maintained by DTC, the Trustee will perform the custodial, document
control and administrative functions described below, in accordance with its
obligations under a Letter of Representations from the Company and the Trustee
to DTC, dated September 12, 2003, and a Medium-Term Note Certificate Agreement
between the Trustee and DTC (the "CERTIFICATE AGREEMENT"), dated October 31,
1988, and its obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement System ("SDFS"). The procedures set forth below may be modified
in compliance with DTC's then applicable procedures and upon agreement by the
Company, the Trustee and the Purchasing Agent.
Maturities: Each Note will mature on a date (the "MATURITY
DATE") not less than nine months after the date of
delivery by the Company of such Note. Notes will
mature on any date selected by the initial
purchaser and agreed to by the Company. "MATURITY"
when used with respect to any Note means the date
on which the outstanding principal amount of such
Note becomes due and payable in full in accordance
with its terms, whether at its Maturity Date or by
declaration of acceleration, call for redemption,
repayment or otherwise.
Issuance: All Notes having the same terms will be represented
initially by a single Global Note. Each Global Note
will be dated and issued as of the date of its
authentication by the Trustee.
All Discount Notes which have the same terms
(collectively, the "ZERO-COUPON TERMS") will be
represented initially by a single Global
Certificate in fully registered form without
coupons.
Each Global Note will bear an original issue date
(the "ORIGINAL ISSUE DATE"). The Original Issue
Date shall remain the same for all Notes
subsequently issued upon registration of transfer,
exchange or substitution of an original Note
regardless of their dates of authentication.
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Identification Numbers: The Company has received from the CUSIP Service
Bureau (the "CUSIP SERVICE BUREAU") of Standard &
Poor's Corporation ("STANDARD & POOR'S") one series
of CUSIP numbers consisting of approximately 900
CUSIP numbers for future assignment to Global
Notes. The Company will provide DTC and the Trustee
with a list of such CUSIP numbers. The Company will
assign CUSIP numbers as described below under
Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers
that the Company has assigned to Global Notes. The
Company will reserve additional CUSIP numbers when
necessary for assignment to Global Notes and will
provide the Trustee and DTC with the list of
additional CUSIP numbers so obtained.
Registration: Unless otherwise specified by DTC, Global Notes
will be issued only in fully registered form
without coupons. Each Global Note will be
registered in the name of Cede & Co., as nominee
for DTC, on the Note Register maintained under the
Indenture by the Trustee. The beneficial owner of a
Note (or one or more indirect participants in DTC
designated by such owner) will designate one or
more participants in DTC (with respect to such
Note, the "PARTICIPANTS") to act as agent or agents
for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance
with respect to such beneficial owner of such Note
in the account of such Participants. The ownership
interest of such beneficial owner in such Note will
be recorded through the records of such
Participants or through the separate records of
such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of interests in a Global Note will be
accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one or
more indirect participants in DTC) acting on behalf
of beneficial transferors and transferees of such
interests.
Exchanges: The Trustee, at the Company's request, may deliver
to DTC and the CUSIP Service Bureau at any time a
written notice of consolidation specifying (a) the
CUSIP numbers of two or more Global Notes
outstanding on such date that represent Notes
having the same terms (except that Issue Dates need
not be the same) and for which interest, if any,
has been paid to the same date and which otherwise
constitute Notes of the same series and tenor under
the Indenture, (b) a date, occurring at least 30
days after such written notice is delivered and at
least 30 days before the next Interest Payment
Date, if any, for the related Notes, on which such
Global Notes shall be exchanged for a single
replacement Global Note; and (c) a new CUSIP
number, obtained from the Company, to be assigned
to such replacement Global Note. Upon receipt of
such a
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notice, DTC will send to its participants
(including the Issuing Agent) and the Trustee a
written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver
to the CUSIP Service Bureau written notice setting
forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the
CUSIP numbers of the Global Notes to be exchanged
will no longer be valid. On the specified exchange
date, the Trustee will exchange such Global Notes
for a single Global Note bearing, the new CUSIP
number and the CUSIP numbers of the exchanged
Global Notes will, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing, if the
Global Notes to be exchanged exceed $500,000,000 in
aggregate principal or face amount, one replacement
Global Note will be authenticated and issued to
represent each $500,000,000 of principal or face
amount of the exchanged Global Notes and an
additional Global Note will be authenticated and
issued to represent any remaining principal amount
of such Global Notes (See "Denominations" below).
Denominations: Notes will be issued in denominations of $1,000 or
more (in multiples of $1,000). Global Notes will be
denominated in principal or face amounts not in
excess of $500,000,000. If one or more Notes having
an aggregate principal or face amount in excess of
$500,000,000 would, but for the preceding sentence,
be represented by a single Global Note, then one
Global Note will be issued to represent each
$500,000,000 principal or face amount of such Note
or Notes and an additional Global Note will be
issued to represent any remaining principal amount
of such Note or Notes. In such case, each of the
Global Notes representing such Note or Notes shall
be assigned the same CUSIP number.
Issue Price: Unless otherwise specified in an applicable Pricing
Supplement, each Note will be issued at the
percentage of principal amount specified in the
Prospectus relating to such Note.
Interest: Each Note will bear interest at a fixed rate, which
may be zero during all or any part of the term in
the case of certain Notes issued at a price
representing a substantial discount from the
principal amount payable at Maturity. Interest on
each Note will accrue from the Issue Date of such
Note for the first interest period and from the
most recent Interest Payment Date to which interest
has been paid for all subsequent interest periods.
Except as set forth hereafter, each payment of
interest on a Note will include interest accrued to
but excluding, as the case may be, the Interest
Payment Date or the date of Maturity (other than a
Maturity Date of a Note occurring on the 31st day
of a month in which case such payment of interest
will include interest accrued to but excluding the
30th day of such month). Any payment of principal,
premium or interest required to be made on a day
that is not a Business Day (as defined
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below) may be made on the next succeeding Business
Day and no interest shall accrue as a result of any
such delayed payment.
Each pending deposit message described under
Settlement Procedure "C" below will be routed to
Standard & Poor's, which will use the message to
include certain information regarding the related
Notes in the appropriate daily bond report
published by Standard & Poor's.
Each Note will bear interest from and including its
Issue Date at the rate per annum set forth thereon
and in the applicable Pricing Supplement until the
principal amount thereof is paid, or made available
for payment, in full. Unless otherwise specified in
the applicable Pricing Supplement, interest on each
Note (other than a Zero-Coupon Note) will be
payable either monthly, quarterly, semi-annually or
annually on each Interest Payment Date and at
Maturity (or on the date of redemption or repayment
if a Note is repurchased by the Company prior to
maturity pursuant to mandatory or optional
redemption provisions or the Survivor's Option).
Interest will be payable to the person in whose
name a Note is registered at the close of business
on the Regular Record Date next preceding each
Interest Payment Date; provided, however, that
interest payable at Maturity, on a date of
redemption or in connection with the exercise of
the Survivor's Option will be payable to the person
to whom principal shall be payable.
Any payment of principal, and premium, if any, or
interest required to be made on a Note on a day
which is not a Business Day need not be made on
such day, but may be made on the next succeeding
Business Day with the same force and effect as if
made on such day, and no additional interest shall
accrue as a result of such delayed payment. Unless
otherwise specified in the applicable Pricing
Supplement, any interest on the Notes will be
computed on the basis of a 360-day year of twelve
30-day months. The interest rates the Company will
agree to pay on newly-issued Notes are subject to
change without notice by the Company from time to
time, but no such change will affect any Notes
already issued or as to which an offer to purchase
has been accepted by the Company.
The Interest Payment Dates for a Note that provides
for monthly interest payments shall be the
fifteenth day of each calendar month (or the next
Business Day if not a Business Day), commencing in
the calendar month that next succeeds the month in
which the Note is issued. In the case of a Note
that provides for quarterly interest payments, the
Interest Payment Dates shall be the fifteenth day
of each third month (or the next Business Day if
not a Business Day), commencing in the third
succeeding calendar month following the month in
which the Note is issued. In the case of a Note
that provides for semi-annual interest payments,
the Interest Payment dates shall be the fifteenth
day of each sixth month (or the next Business Day
if not a Business Day), commencing in the sixth
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succeeding calendar month following the month in
which the Note is issued. In the case of a Note
that provides for annual interest payments, the
Interest Payment Date shall be the fifteenth day of
every twelfth month (or the next Business Day if
not a Business Day), commencing in the twelfth
succeeding calendar month following the month in
which the Note is issued. The Regular Record Date
with respect to any Interest Payment Date shall be
the date fifteen calendar days prior to such
Interest Payment Date, whether or not such date
shall be a Business Day; provided, however, that
interest payable at Maturity will be payable to the
person to whom principal shall be payable.
Each payment of interest on a Note shall include
accrued interest from and including the Issue Date
or from and including the last day in respect of
which interest has been paid (or duly provided
for), as the case may be, to, but excluding, the
Interest Payment Date or Maturity Date, as the case
may be.
Calculation of Interest: Unless otherwise specified in the applicable
Pricing Supplement, interest on the Notes
(including interest for partial periods) will be
calculated on the basis of a 360-day year of twelve
30-day months. (Examples of interest calculations
are as follows: October 1, 2003 to April 1, 2004
equals 6 months and 0 days, or 180 days; the
interest paid equals 180/360 times the annual rate
of interest times the principal amount of the Note.
The period from December 3, 2003 to April 1, 2004
equals 3 months and 28 days, or 118 days; the
interest payable equals 118/360 times the annual
rate of interest times the principal amount of the
Note.)
Business Day: "Business Day" means, unless otherwise specified in
the applicable Pricing Supplement, any day, other
than a Saturday or Sunday, that meets the following
applicable requirement: such day is not a day on
which banking institutions are authorized or
required by law, regulation or executive order to
be closed in The City of New York.
Payments of
Principal and Interest: Payments of Principal and Interest. Promptly after
each Regular Record Date, the Trustee will deliver
to the Company and DTC a written notice specifying
by CUSIP number the amount of interest, if any, to
be paid on each Global Note on the following
Interest Payment Date (other than an Interest
Payment Date coinciding with a Maturity Date) and
the total of such amounts. DTC will confirm the
amount payable on each Global Note on such Interest
Payment Date by reference to the daily bond reports
published by Standard & Poor's. On such Interest
Payment Date, the Company will pay to the Trustee,
and the Trustee in turn will pay to DTC, such total
amount of interest due (other than on the Maturity
Date), at the times and in the manner set forth
below under "Manner of
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Payment". If any Interest Payment Date for any Note
is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day
and no interest shall accrue on such payment for
the period from and after such Interest Payment
Date.
Payments on the Maturity Date. On or about the
first Business Day of each month, the Trustee will
deliver to the Company and DTC a written list of
principal, premium, if any, and interest to be paid
on each Global Note representing Notes maturing or
subject to redemption (pursuant to a sinking fund
or otherwise) or repayment ("MATURITY") in the
following month. The Trustee, the Company and DTC
will confirm the amounts of such principal,
premium, if any, and interest payments with respect
to each Global Note on or about the fifth Business
Day preceding the Maturity Date of such Global
Note. On the Maturity Date, the Company will pay to
the Trustee, and the Trustee in turn will pay to
DTC, the principal amount of such Global Note,
together with interest and premium, if any, due on
such Maturity Date, at the times and in the manner
set forth below under "Manner of Payment". If the
Maturity Date of any Global Note is not a Business
Day, the payment due on such day shall be made on
the next succeeding Business Day and no interest
shall accrue on such payment for the period from
and after such Maturity Date. Promptly after
payment to DTC of the principal and interest due on
the Maturity Date of such Global Note and all other
Notes represented by such Global Note, the Trustee
will cancel and destroy such Global Note in
accordance with the Indenture and so advise the
Company.
Manner of Payment. The total amount of any
principal, premium, if any, and interest due on
Global Notes on any Interest Payment Date or at
Maturity shall be paid by the Company to the
Trustee in immediately available funds on such
date. The Company will make such payment on such
Global Notes by instructing the Trustee to withdraw
funds from an account maintained by the Company
with Citibank, N.A. by wire transfer to Citibank,
N.A. or as otherwise agreed with the Trustee. The
Company will confirm such instructions in writing
to the Trustee. Prior to 10:00 a.m., New York City
time, on the Maturity Date or as soon as possible
thereafter, the Trustee will make payment to DTC in
accordance with existing arrangements between DTC
and the Trustee, in funds available for immediate
use by DTC, each payment of interest, principal and
premium, if any, due on a Global Note on such date.
On each Interest Payment Date (other than on the
Maturity Date) the Trustee will pay DTC such
interest payments in same-day funds in accordance
with existing arrangements between the Trustee and
DTC. Thereafter, on each such date, DTC will pay,
in accordance with its SDFS operating procedures
then in effect, such amounts in funds available for
immediate use to the respective Participants with
payments in amounts proportionate to their
respective holdings in principal amount of
beneficial interest in such Global Note as are
recorded in the book-entry system maintained by
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DTC. Neither the Company nor the Trustee shall have
any direct responsibility or liability for the
payment by DTC of the principal of, or premium, if
any, or interest on, the Notes to such
Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any
interest payment on a Note will be determined and
withheld by the Participant, indirect participant
in DTC or other person responsible for forwarding
payments and materials directly to the beneficial
owner of such Note.
Procedure for Rate
Setting and The Company and the Agents will discuss, from time
Posting: to time, the aggregate principal amounts of, the
Maturities, the Issue Price and the interest rates
to be borne by Notes that may be sold as a result
of the solicitation of orders by the Agents. If the
Company decides to set interest rates borne by any
Notes in respect of which the Agents are to solicit
orders (the setting of such interest rates to be
referred to herein as "POSTING"), or if the Company
decides to change interest rates previously posted
by it, it will promptly advise the Agents of the
prices and interest rates to be posted.
The Company will assign a separate CUSIP number for
each tranche of Notes to be posted, and will so
advise and notify the Trustee and Purchasing Agent
of said assignment by telephone and/or by
telecopier or other form of electronic
transmission. The Purchasing Agent will, in turn,
include the assigned CUSIP number on all Posting
notices communicated to the Agents and Selling
Group members.
Offering of Notes: In the event that there is a Posting, the
Purchasing Agent will communicate to each of the
Agents and Selling Group members the aggregate
principal amount and Maturities of, along with the
interest rates to be borne by, each tranche of
Notes that is the subject of the Posting.
Thereafter, the Purchasing Agent, along with the
other Agents and the Selling Group, will solicit
offers to purchase the Notes accordingly.
Purchase of Notes
by the Purchasing
Agent: The Purchasing Agent will, no later than 4:00 p.m.
(New York City time) on the sixth day subsequent to
the day on which such Posting occurs, or if such
sixth day is not a Business Day, on the preceding
Business Day, or on such other Business Day and
time as shall be mutually agreed upon by the
Company and the Agents (any such day, a "TRADE
Day"), (i) complete, execute and deliver to the
Company a Terms Agreement that sets forth, among
other things, the amount of each tranche that the
Purchasing Agent is offering to purchase or (ii)
inform the Company that
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none of the Notes of a particular tranche will be
purchased by the Purchasing Agent.
Acceptance and
Rejection of
Orders: Unless otherwise agreed by the Company and the
Agents, the Company has the sole right to accept
orders to purchase Notes and may reject any such
order in whole or in part. Unless otherwise
instructed by the Company, the Purchasing Agent
will promptly advise the Company by telephone of
all offers to purchase Notes received by it, other
than those rejected by it in whole or in part in
the reasonable exercise of its discretion. No order
for less than $1,000 principal amount of Notes will
be accepted.
Upon receipt of a completed and executed Terms
Agreement from the Purchasing Agent, the Company
will (i) promptly execute and return such Terms
Agreement to the Purchasing Agent or (ii) inform
the Purchasing Agent that its offer to purchase the
Notes of a particular tranche has been rejected, in
whole or in part. The Purchasing Agent will
thereafter promptly inform the other Agents and
participating Selling Group members of the action
taken by the Company.
Preparation of
Pricing
Supplement: If any offer to purchase a Note is accepted by or
on behalf of the Company, the Company will provide
a Pricing Supplement (substantially in the form
attached to the Selling Agent Agreement as Exhibit
D) reflecting the terms of such Note and will have
filed such Pricing Supplement with the Commission
in accordance with the applicable paragraph of Rule
424(b) under the Act and will supply a copy thereof
(or additional copies if requested) to the
Purchasing Agent, by no later than 11:00 a.m. on
the Business Day immediately following the Trade
Day, and one copy to the Trustee. The Purchasing
Agent will cause a Prospectus and Pricing
Supplement to be delivered to each of the other
Agents and Selling Group members that purchased
such Notes, and each of these, in turn, will,
pursuant to the terms of the Selling Agent
Agreement and the Master Selected Dealer Agreement,
cause to be delivered a copy of the applicable
Pricing Supplement to each purchaser of Notes from
such Agent or Selling Group member.
In each instance that a Pricing Supplement is
prepared, the Agents will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements and the Prospectuses
to which they are attached (other than those
retained for files) will be destroyed.
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Delivery of
Confirmation and
Prospectus to
Purchaser by
Purchasing Agent: Subject to "Suspension of Solicitation; Amendment
or Supplement" below, the Agents will deliver a
Prospectus (including the Pricing Supplement) as
herein described with respect to each Note sold by
it.
For each offer to purchase a Note solicited by an
Agent and accepted by or on behalf of the Company,
the Purchasing Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the terms of such Note and other applicable
details described above and delivery and payment
instructions. In addition, the Purchasing Agent
will deliver to such purchaser the Prospectus
(including the Pricing Supplement) in relation to
such Note prior to or together with the earlier of
any written offer of such Note, delivery of the
confirmation of sale or delivery of the Note.
Settlement: The receipt of immediately available funds by the
Company in payment for Notes and the authentication
and issuance of the Global Note representing such
Notes shall constitute "SETTLEMENT" with respect to
such Note. All orders accepted by the Company will
be settled within one to three Business Days
pursuant to the timetable for Settlement set forth
below, unless the Company and the purchaser agree
to Settlement on a later date, and shall be
specified upon acceptance of such offer; provided,
however, that in all cases the Company will notify
the Trustee on the date issuance instructions are
given.
Settlement
Procedures: In the event of a purchase of Notes by any Agent,
as principal, appropriate Settlement details, if
different from those set forth below, will be set
forth in the applicable Terms Agreement to be
entered into between such Agent and the Company
pursuant to the Selling Agent Agreement. Settlement
Procedures with regard to each Note sold by an
Agent, as agent for the Company, shall be as
follows:
A. After the acceptance of an offer by the
Company with respect to a Note, the
Purchasing Agent will communicate the
following details of the terms of such offer
(the "NOTE SALE INFORMATION") to the Company
by telephone confirmed in writing or by
facsimile transmission or other acceptable
written means:
1. Principal amount of the purchase;
2. Interest Rate;
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3. Interest Payment Dates;
4. Settlement Date;
5. Maturity Date;
6. Purchase Price;
7. Purchasing Agent's commission
determined pursuant to Section IV(a) of
the Selling Agent Agreement;
8. Net proceeds to the Company;
9. Trade Date;
10. If a Note is redeemable by the Company,
such of the following as are
applicable:
(i) The date on and after which such
Note may be redeemed (the
"REDEMPTION COMMENCEMENT DATE"),
(ii) Initial redemption price (% of
par), and
(iii) Amount (% of par) that the
initial redemption price shall
decline (but not below par) on
each anniversary of the
Redemption Commencement Date;
11. Whether the Note has the Survivor's
Option;
12. If a Discount Note, the total amount of
original issue discount, the yield to
maturity and the initial accrual period
of original issue discount;
13. DTC Participant Number of the
institution through which the customer
will hold the beneficial interest in
the Global Note; and
14. Such other terms as are necessary to
complete the applicable form of Note.
B. The Company will advise the Trustee by
telephone (confirmed in writing and signed by
an authorized person at any time on the same
date) or by facsimile transmission signed by
an authorized person of the information set
forth in Settlement Procedure "A" above and
the name of the Purchasing Agent. The Trustee
will assign a CUSIP number to the Global
Security representing such
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Note. The Trustee will notify the Company and
the Purchasing Agent of such CUSIP number by
telephone as soon as practicable.
C. The Trustee will communicate to DTC and the
Purchasing Agent through DTC's Participant
Terminal System, a pending deposit message
specifying the following Settlement
information:
1. The information received in accordance
with Settlement Procedure "A".
2. The numbers of the participant accounts
maintained by DTC on behalf of the
Trustee and the Purchasing Agent.
3. The initial Interest Payment Date for
such Note, number of days by which such
date succeeds the related DTC record
date (which term means the Regular
Record Date), and if then calculated,
the amount of interest payable on such
Initial Interest Payment Date (which
amount shall have been confirmed by the
Trustee).
4. The CUSIP number of the Global Note
representing such Notes.
5. The frequency of interest.
6. Whether such Global Note represents any
other Notes issued or to be issued (to
the extent then known).
D. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
E. The Trustee will complete and deliver a
Global Note representing such Note in a form
that has been approved by the Company, the
Agents and the Trustee.
F. The Trustee will authenticate the Global Note
representing such Note and maintain
possession of such Global Note.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such
Note to the participant account of the Agent
maintained by DTC and (ii) debit the
settlement account of the Agent and credit
the settlement account of the Trustee
maintained by DTC, in an amount equal to the
price of such Note less the Purchasing
Agent's commission. The entry of such a
deliver order shall be deemed to constitute a
representation and warranty by the Trustee
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to DTC that (a) the Global Note representing
such Note has been issued and authenticated
and (b) the Trustee is holding such Global
Note pursuant to the Certificate Agreement.
H. The Purchasing Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit
such Note to the Purchasing Agent's
participant account and credit such Note to
the participant accounts of the Participants
to whom such Note is to be credited
maintained by DTC and (ii) debit the
settlement accounts of such Participants and
credit the settlement account of the
Purchasing Agent maintained by DTC, in an
amount equal to the price of the Note so
credited to their accounts.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
J. The Trustee will credit to an account of the
Company maintained at Citibank, N.A. funds
available for immediate use in an amount
equal to the amount credited to the Trustee's
DTC participant account in accordance with
Settlement Procedure "G".
K. The Trustee will send a copy of the Global
Note representing such Note by first-class
mail to the Company.
L. The Purchasing Agent will confirm the
purchase of each Note to the purchaser
thereof either by transmitting to the
Participant to whose account such Note has
been credited a confirmation order through
DTC's Participant Terminal System or by
mailing a written confirmation to such
purchaser. In all cases the Prospectus, as
most recently amended or supplemented, must
accompany or precede such confirmation.
M. Upon request by the Company, the Trustee will
send to the Company a statement setting forth
the principal amount of Notes outstanding as
of that date under the Indenture and setting
forth the CUSIP number(s) assigned to, and a
brief description of, any orders which the
Company has advised the Trustee but which
have not yet been settled.
B-13
Settlement
Procedures
Timetable: In the event of a purchase of Notes by the
Purchasing Agent, as principal, appropriate
Settlement details, if different from those set
forth below, will be set forth in the applicable
Terms Agreement to be entered into between the
Purchasing Agent and the Company pursuant to the
Selling Agent Agreement.
For orders of Notes solicited by an Agent, as
agent, and accepted by the Company, Settlement
Procedures "A" through "M" shall be completed as
soon as possible but not later than the respective
times (New York City time) set forth below:
Settlement: Procedure Time
A 4:00 p.m. on the Trade Day.
B 5:00 p.m. on the Trade Day.
C 2:00 p.m. on the Business Day
before the Settlement Date.
D 10:00 a.m. on the Settlement Date.
E 12:00 p.m. on the Settlement Date.
F 12:30 p.m. on the Settlement Date.
G-H 2:00 p.m. on the Settlement Date.
I 4:45 p.m. on the Settlement Date.
X-X 5:00 p.m. on the Settlement Date
M At the request of the Company.
NOTE: The Prospectus as most recently amended or
supplemented must accompany or precede any written
confirmation given to the customer (Settlement
Procedure "L"). Settlement Procedure "I" is subject
to extension in accordance with any extension
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in
effect on the Settlement Date.
If Settlement of a Note is rescheduled or
cancelled, the Trustee will deliver to DTC, through
DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m.,
New York City time, on the Business Day immediately
preceding the scheduled Settlement Date.
B-14
Failure to Settle: If the Trustee fails to enter an SDFS deliver order
with respect to a Note pursuant to Settlement
Procedure "G", the Trustee may deliver to DTC,
through DTC's Participant Terminal System, as soon
as practicable a withdrawal message instructing DTC
to debit such Note to the participant account of
the Trustee maintained at DTC. DTC will process the
withdrawal message; provided, that, such
participant account contains Notes having the same
terms and having a principal amount that is at
least equal to the principal amount of such Note to
be debited. If withdrawal messages are processed
with respect to all the Notes issued or to be
issued represented by a Global Note, the Trustee
will cancel such Global Note in accordance with the
Indenture, make appropriate entries in its records
and so advise the Company. The CUSIP number
assigned to such Global Note shall, in accordance
with CUSIP Service Bureau procedures, be cancelled
and not immediately reassigned. If withdrawal
messages are processed with respect to one or more,
but not all, of the Notes represented by a Global
Note, the Trustee will exchange such Global Note
for two Global Notes, one of which shall represent
such Notes and shall be cancelled immediately after
issuance, and the other of which shall represent
the remaining Notes previously represented by the
surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note. If the
purchase price for any Note is not timely paid to
the Participants with respect to such Note by the
beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and,
in turn, the related Agent may enter SDFS deliver
orders through DTC's participant Terminal System
reversing the orders entered pursuant to Settlement
Procedures "G" and "H", respectively. Thereafter,
the Trustee will deliver the withdrawal message and
take the related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than default by the Agent in the
performance of its obligations hereunder or under
the Selling Agent Agreement, the Company will
reimburse the Agent on an equitable basis for its
loss of the use of funds during the period when
they were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Note, DTC may take any
actions in accordance with its SDFS operating
procedures then in effect. In the event of a
failure to settle with respect to one or more, but
not all, of Notes that were to have been
represented by a Global Note, the Trustee will
provide, in accordance with Settlement Procedures
"D" and "E", for the authentication and issuance of
a Global Note representing the other Notes to have
been represented by such Global Note and will make
appropriate entries in its records.
B-15
Procedure for
Rate Changes: Each time a decision has been reached to change
rates, the Company will promptly advise the Agents
of the new rates, who will forthwith suspend
solicitation of purchases of Notes at the prior
rates. The Agents may telephone the Company with
recommendations as to the changed interest rates.
Suspension of
Solicitation;
Amendment or
Supplement: Subject to the Company's representations,
warranties and covenants contained in the Selling
Agent Agreement, the Company may instruct the
Agents to suspend at any time for any period of
time or permanently, the solicitation of orders to
purchase Notes. Upon receipt of such instructions
(which may be given orally), each Agent will
forthwith suspend solicitation until such time as
the Company has advised it that solicitation of
offers to purchase may be resumed.
In the event that at the time the Company suspends
solicitation of offers to purchase there shall be
any orders outstanding for settlement, the Company
will promptly advise the Agents and the Trustee
whether such orders may be settled and whether
copies of the Prospectus as in effect at the time
of the suspension may be delivered in connection
with the settlement of such orders. The Company
will have the sole responsibility for such decision
and for any arrangements which may be made in the
event that the Company determines that such orders
may not be settled or that copies of such
Prospectus may not be so delivered.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and furnish the Agents
and the Trustee with the proposed amendment or
supplement and with such certificates and opinions
as are required, all to the extent required by and
in accordance with the terms of the Selling Agent
Agreement. Subject to the provisions of the Selling
Agent Agreement, the Company may file with the
Commission any supplement to the Prospectus
relating to the Notes. The Company will provide the
Agents and the Trustee with copies of any such
supplement, and confirm to the Agents that such
supplement has been filed with the Commission.
Trustee Not to Risk
Funds: Nothing herein shall be deemed to require the
Trustee to risk or expend its own funds in
connection with any payment to the Company, or the
Agents or the purchasers, it being understood by
all parties that payments made by the Trustee to
either the Company or the Agents shall be made only
to the extent that funds are provided to the
Trustee for such purpose.
B-16
Advertising Costs: The Company shall have the sole right to
approve the form and substance of any advertising
an Agent may initiate in connection with such
Agent's solicitation to purchase the Notes. The
expense of such advertising will be solely the
responsibility of such Agent, unless otherwise
agreed to by the Company.
B-17
EXHIBIT C
UNITED PARCEL SERVICE, INC.
UPS Notes
TERMS AGREEMENT
__________ __, 20__
United Parcel Service, Inc.
00 Xxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
The undersigned agrees to purchase the following aggregate principal amount of
Notes:
$_____________
The terms of such Notes shall be as follows:
CUSIP Number:__________________
Interest Rate:___________ %
Maturity Date:_________________
Price to Public: ___________
Agent's Concession: ________%
Settlement Date, Time
and Place:_______________________
Survivor's Option: __________________________
Interest Payment Dates:______________________
Optional Redemption, if any:_________________
Initial Redemption Date: _____
Redemption Price: Initially % of Principal Amount and
declining___________ % of the
Principal Amount on each anniversary of the Initial Redemption
Date until the
Redemption Price is 100% of the Principal Amount.
[Any other terms and conditions agreed to by such Agent and the Company]
[NAME OF PURCHASING AGENT]
By:________________________
Name:
Title:
ACCEPTED:
UNITED PARCEL SERVICE, INC.
By:______________________________
Name:
Title:
C-1
EXHIBIT D
FORM OF PRICING SUPPLEMENT
Registration No. 333-108272
Filed Pursuant to Rule 424(b)(2)
United Parcel Service, Inc.
UPS Notes
With Maturities of 9 Months or More from Date of Issue
--------------------------------------------------------------------------------
Pricing Supplement No. __ Trade Date: __/__/__
(To Prospectus dated September 8, 2003 and Prospectus Issue Date: __/__/__
Supplement dated September 12, 2003)
The date of this Pricing Supplement is _______ __, ____
CUSIP
or
Common Code Principal Amount Interest Rate Maturity Date Price to Public
----------- ---------------- ------------- ------------- ---------------
Interest Payment
Frequency Subject to Dates and terms of redemption
(begin date) Survivor's Option Redemption (including the redemption price)
---------------- ----------------- ------------ --------------------------------
Discounts and
Proceeds to UPS Commissions Reallowance Dealer Other Terms
--------------- ----------- ----------- ------ -----------
D-1
EXHIBIT E
Form of Master Selected Dealer Agreement
[Name of Broker-Dealer]
[Broker-Dealer's Address]
Dear Selected Dealer:
In connection with public offerings of securities after the date hereof
for which we are acting as manager of an underwriting syndicate or are otherwise
responsible for the distribution of securities to the public by means of an
offering of securities for sale to selected dealers, you may be offered the
right as such a selected dealer to purchase as principal a portion of such
securities. This will confirm our mutual agreement as to the general terms and
conditions applicable to your participation in any such selected dealer group
organized by us as follows.
1. Applicability of this Agreement. The terms and
conditions of this Agreement shall be applicable to any public offering of
securities ("SECURITIES") pursuant to a registration statement filed under the
Securities Act of 1933 (the "SECURITIES ACT"), or exempt from registration
thereunder (other than a public offering of Securities effected wholly outside
the United States of America), wherein ABN AMRO Financial Services, Inc.
("AAFS") (acting for its own account or for the account of any underwriting or
similar group or syndicate) is responsible for managing or otherwise
implementing the sale of the Securities to selected broker-dealers ("SELECTED
DEALERS") and has expressly informed you that such terms and conditions shall be
applicable. Any such offering of Securities to you as a Selected Dealer is
hereinafter called an "OFFERING". In the case of any Offering where we are
acting for the account of any underwriting or similar group or syndicate
("UNDERWRITERS"), the terms and conditions of this Agreement shall be for the
benefit of, and binding upon, such Underwriters, including, in the case of any
Offering where we are acting with others as representatives of Underwriters,
such other representatives.
2. Conditions of Offering; Acceptance and Purchases. Any
Offering will be subject to delivery of the Securities and their acceptance by
us and any other Underwriters, may be subject to the approval of all legal
matters by counsel and the satisfaction of other conditions, and may be made on
the basis of reservation of Securities or an allotment against subscription. We
will advise you by telegram, telex or other form of written communication
("WRITTEN COMMUNICATION", which term, in the case of any Offering described in
Section 3(a) or 3(b) hereof, may include a prospectus or offering circular) of
the particular method and supplementary terms and conditions (including, without
limitation, the information as to prices and offering date referred to in
Section 3(c) hereof) of any Offering in which you are invited to participate. To
the extent such supplementary terms and conditions are inconsistent with any
provision herein, such terms and conditions shall supersede any such provision.
Unless otherwise indicated in any such Written Communication, acceptances and
other communications by you with respect to an Offering should be sent to ABN
AMRO Financial Services, Inc., 000 Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx
00000 (Telecopy: (000) 000-0000). We reserve the right to reject any acceptance
in whole or in part. Unless notified otherwise by us, Securities
E-1
purchased by you shall be paid for on such date as we shall determine, on one
business day's prior notice to you, by certified or official bank check, in an
amount equal to the Public Offering Prices (as hereinafter defined) or, if we
shall so advise you, at such Public Offering Price less the Concession (as
hereinafter defined), payable in immediately available funds to the order of ABN
AMRO Financial Services, Inc., against delivery of the Securities. If Securities
are purchased and paid for at such Public Offering Price, such Concession will
be paid after the termination of the provisions of Section 3(c) hereof with
respect to such Securities. Notwithstanding the foregoing, unless notified
otherwise by us, payment for and delivery of Securities purchased by you shall
be made through the facilities of The Depository Trust Company, if you are a
member, unless you have otherwise notified us prior to the date specified in a
Written Communication to you from us or, if you are not a member, settlement may
be made through a correspondent who is a member pursuant to instructions which
you will send to us prior to such specified date.
3. Representations, Warranties and Agreements.
(a) Registered Offerings. In the case of any Offering of
Securities that are registered under the Securities Act ("REGISTERED OFFERING"),
we shall provide you with such number of copies of each preliminary prospectus
and of the final prospectus relating thereto as you may reasonably request for
the purposes contemplated by the Securities Act and the Securities Exchange Act
of 1934 (the "EXCHANGE ACT") and the applicable rules and regulations of the
Securities and Exchange Commission (the "COMMISSION") thereunder. You represent
and warrant that you are familiar with Rule 15c2-8 under the Exchange Act
relating to the distribution of preliminary and final prospectuses and agree
that you will comply therewith. You agree to make a record of your distribution
of each preliminary prospectus and, when furnished with copies of any revised
preliminary prospectus, you will, upon our request, promptly forward copies
thereof to each person to whom you have theretofore distributed a preliminary
prospectus. You agree that in purchasing Securities in a Registered Offering you
will rely upon no statement whatsoever, written or oral, other than the
statements in the final prospectus delivered to you by us. You will not be
authorized by the issuer or other seller of Securities offered pursuant to a
prospectus or by any Underwriter to give any information or to make any
representation not contained in the prospectus in connection with the sale of
such Securities.
(b) Offerings Pursuant to Offering Circular. In the case of
any Offering of Securities, other than a Registered Offering, which is made
pursuant to an offering circular or other document comparable to a prospectus in
a Registered Offering, including, without limitation, an Offering of "exempted
securities" as defined in Section 3(a)(12) of the Exchange Act (an "EXEMPTED
SECURITIES Offering"), we shall provide you with such number of copies of each
preliminary offering circular and of the final offering circular relating
thereto as you may reasonably request. You agree that you will comply with the
applicable Federal and state laws, and the applicable rules and regulations of
any regulatory body promulgated thereunder, governing the use and distribution
of offering circulars by brokers or dealers. You agree that in purchasing
Securities pursuant to an offering circular you will rely upon no statements
whatsoever, written or oral, other than the statements in the final offering
circular delivered to you by us. You will not be authorized by the issuer or
other seller of Securities offered pursuant to an offering circular or by any
Underwriter to give any information or to make any representation not contained
in the offering circular in connection with the sale of such Securities.
E-2
(c) Offer and Sale to the Public. With respect to any Offering
of Securities, we will inform you by a Written Communication of the public
offering price, the selling concession, the reallowance (if any) to
broker-dealers and the time when you may commence selling Securities to the
public. After such public offering has commenced, we may change the public
offering price, the selling concession and the reallowance (if any) to
broker-dealers. The offering price, selling concession and reallowance (if any)
to broker-dealers at any time in effect with respect to an Offering are
hereinafter referred to, respectively, as the "PUBLIC OFFERING PRICE", the
"CONCESSION" and the "REALLOWANCE". With respect to each Offering of Securities,
until the provisions of this Section 3(c) shall be terminated pursuant to
Section 5 hereof, you agree to offer Securities to the public at no more than
the Public Offering Price. If notified by us, you may sell securities to the
public at a lesser negotiated price than the Public Offering Price, but in an
amount not to exceed the Concession. If a Reallowance is in effect, a
reallowance from the Public Offering Price not in excess of such Reallowance may
be allowed as consideration for services rendered in distribution to
broker-dealers (i) who are actually engaged in the investment banking or
securities business, (ii) who execute the written agreement prescribed by Rule
2740(c) of the Conduct Rules of the National Association of Securities Dealers.
Inc. (the "NASD") and (iii) who, if they are foreign banks, broker-dealers or
institutions not eligible for membership in the NASD, represent to you that they
will promptly reoffer such Securities at the Public Offering Price and will
abide by the conditions with respect to foreign banks, broker-dealers and
institutions set forth in Section 3(e) hereof.
(d) Over-allotment; Stabilization; Unsold Allotments. We may,
with respect to any Offering, be authorized to over-allot in arranging sales to
Selected Dealers, to purchase and sell Securities for long or short account and
to stabilize or maintain the market price of the Securities. You agree not to
purchase and sell Securities for which an order from a client has not been
received without our consent in each instance. You further agree that, upon our
request at any time and from time to time prior to the termination of the
provisions of Section 3(c) hereof with respect to any Offering, you will report
to us the amount of Securities purchased by you pursuant to such Offering which
then remain unsold by you and will, upon our request at any such time, sell to
us for our account or the account of one or more Underwriters such amount of
such unsold Securities as we may designate at the Public Offering Price less an
amount to be determined by us not in excess of the Concession. If, prior to the
later of (i) the termination of the provisions of Section 3(c) hereof with
respect to any Offering or (ii) the covering by us of any short position created
by us in connection with such Offering for our account or the account of one or
more Underwriters, we purchase or contract to purchase for our account or the
account of one or more Underwriters in the open market or otherwise any
Securities purchased by you under this Agreement as part of such Offering, you
agree to pay us on demand an amount equal to the Concession with respect to such
Securities (unless you shall have purchased such Securities pursuant to Section
2 hereof at the Public Offering Price in which case we shall not be obligated to
pay such Concession to you pursuant to Section 2) plus transfer taxes and
broker's commissions or dealer's xxxx-up, if any, paid in connection with such
purchase or contract to purchase.
(e) NASD. You represent and warrant that you are actually
engaged in the investment banking or securities business. In addition, you
further represent and warrant that you are either (i) a member in good standing
of the NASD(ii) a foreign bank, broker-dealer or institution not eligible for
membership in the NASD which agrees not to make any sales within
E-3
the United States, its territories or its possessions or to persons who are
citizens thereof or residents therein, and in making any other sales to comply
with the NASD's interpretation with respect to free riding and withholding, or
(iii), solely in connection with an Exempted Securities Offering, a bank, as
defined in Section 3(a)(6) of the Exchange Act, that does not otherwise fall
within provision (i) or (ii) of this sentence (a "BANK"). You further represent,
by your participation in an Offering, that you have provided to us all documents
and other information required to be filed with respect to you, any related
person or any person associated with you or any such related person pursuant to
the supplementary requirements of the NASD's interpretation with respect to
review of corporate financing as such requirements relate to such Offering.
You agree that, in connection with any purchase or sale of the
Securities wherein a selling Concession, discount or other allowance is received
or granted, (1) you will comply with the provisions of Rule 2740 of the Conduct
Rules of the NASD, (2) if you are a non-NASD member broker or dealer in a
foreign country, you will also comply (a), as though you were an NASD member,
with the provision of Rules 2730, 2740 and 2750 of the Conduct Rules and (b)
with Rule 2420 of the Conduct Rules as that Rule applies to a non-NASD member
broker or dealer in a foreign country and (3), in connection with an Exempted
Securities Offering, if you are a Bank, you will also comply, as though you were
an NASD member, with the provision of Rules 2730, 2740 and 2750 of the Conduct
Rules.
You further agree that, in connection with any purchase of
securities from us that is not otherwise covered by the terms of this Agreement
(whether we are acting as manager, as a member of an underwriting syndicate or a
selling group or otherwise), if a selling Concession, discount or other
allowance is granted to you, clauses (1), (2) and (3) of the preceding paragraph
will be applicable.
(f) Relationship among Underwriters and Selected Dealers. We
may buy Securities from or sell Securities to any Underwriter or Selected Dealer
and the Underwriters (if any) and the Selected Dealers may purchase Securities
from and sell Securities to each other at the Public Offering Price less all or
any part of the Reallowance. You are not authorized to act as agent for us, any
Underwriter or the issuer or other seller of any Securities in offering
Securities to the public or otherwise. Neither we nor any Underwriter shall be
under any obligation to you except for obligations assumed hereby or in any
Written Communication from us in connection with any Offering. Nothing contained
herein or in any Written Communication from us shall constitute the Selected
Dealers an association or partners with us or any Underwriter or with one
another. If the Selected Dealers, among themselves or with the Underwriters,
should be deemed to constitute a partnership for Federal income tax purposes,
then you elect to be excluded from the application of Subchapter K, Chapter 1,
Subtitle A of the Internal Revenue Code of 1986 and agree not to take any
position inconsistent with that election. You authorize us, in our discretion,
to execute and file on your behalf such evidence of that election as may be
required by the Internal Revenue Service. In connection with any Offering, you
shall be liable for your proportionate amount of any tax, claim, demand or
liability that may be asserted against you alone or against one or more Selected
Dealers participating in such Offering, or against us or the Underwriters, based
upon the claim that the Selected Dealers (including you), or any of them,
constitute an association, an unincorporated business or other
E-4
entity, including, in each case, your proportionate amount of any expense
incurred in defending against any such tax, claim, demand or liability.
(g) Blue Sky Laws. Upon application to us, we shall inform you
as to any advice we have received from counsel concerning the jurisdictions in
which Securities have been qualified for sale or are exempt under the securities
or blue sky laws of such jurisdictions, but we do not assume any obligation or
responsibility as to your right to sell Securities in any such jurisdiction.
(h) Compliance with Law. You agree that in selling Securities
pursuant to any Offering (which agreement shall also be for the benefit of the
issuer or other seller of such Securities) you will comply with all applicable
laws, rules and regulations, including the applicable provisions of the
Securities Act and the Exchange Act, the applicable rules and regulations of the
Securities and Exchange Commission thereunder, the applicable rules and
regulations of the NASD, the applicable rules and regulations of any securities
exchange having jurisdiction over the Offering and the applicable laws, rules
and regulations specified in Section 3(b) hereof.
(i) Registration of the Securities. You are aware that no
action has been or will be taken by the issuer of the Securities that would
permit the offer or sale of the Securities or possession or distribution of the
Prospectus or any other offering material relating to the Securities in any
jurisdiction where action for that purpose is required, other than registering
the Securities under the Securities Act in the case of a Registered Offering.
Accordingly, you agree that you will observe all applicable laws and regulations
in each jurisdiction in or from which you may directly or indirectly acquire,
offer, sell, or deliver Securities or have in your possession or distribute the
Prospectus or any other offering material relating to the Securities, and you
will obtain any consent, approval or permission required by you for the
purchase, offer, or sale by you of the Securities under the laws and regulations
in force in any such jurisdiction to which you are subject or in which you make
such purchase, offer, or sale. Neither the issuer of the Securities nor AAFS or
any Selected Dealers or Underwriters shall have any responsibility for
determining what compliance is necessary by you or for your obtaining such
consents, approvals, or permissions. You further agree that you will take no
action that will impose any obligations on the issuer of the Securities, AAFS,
or any Selected Dealers or Underwriters. Subject as provided above, you shall,
unless prohibited by applicable law, furnish to each person to whom you offer,
sell or deliver Securities a copy of the Prospectus (as then amended or
supplemented) or (unless delivery of the Prospectus is required by applicable
law) inform each such person that a copy thereof (as then amended or
supplemented) will be made available upon request. You are not authorized to
give any information or to make any representation not contained in the
Prospectus or the documents incorporated by reference or specifically referred
to therein in connection with the offer and sale of the Securities. In the case
of an Exempted Securities Offering, all references to "Prospectus" in this
section shall be interpreted to mean "offering circular."
4. Indemnification. You agree to indemnify and hold
harmless ABN AMRO Financial Services, Inc., the issuer of the Securities, each
person, if any, who controls (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) ABN AMRO Financial Services,
Inc. or the issuer of the Securities, and their respective directors,
E-5
officers and employees from and against any and all losses, liabilities, costs
or claims (or actions in respect thereof) (collectively, "LOSSES") to which any
of them may become subject (including all reasonable costs of investigating,
disputing or defending any such claim or action), insofar as such Losses arise
out of or are in connection with the breach of any representation, warranty or
agreement made by you herein.
If any claim, demand, action or proceeding (including any
governmental investigation) shall be brought or alleged against an indemnified
party in respect of which indemnity is to be sought against an indemnifying
party, the indemnified party shall promptly notify the indemnifying party in
writing, and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnified party may
designate in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the reasonable fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the indemnifying party has failed
within a reasonable time to retain counsel reasonably satisfactory to such
indemnified party or (iii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
agreed that the indemnifying party shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate law firm (in addition to local
counsel where necessary) for all such indemnified parties. Such firm shall be
designated in writing by the indemnified party. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
The indemnity agreements contained in this Section and the
representations and warranties by you in this Agreement shall remain operative
and in full force and effect regardless of: (i) any termination of this
Agreement; (ii) any investigation made by an indemnified party or on such
party's behalf or any person controlling an indemnified party or by or on behalf
of the indemnifying party, its directors or officers or any person controlling
the indemnifying party; and (iii) acceptance of and payment for any Securities.
5. Termination, Supplements and Amendments. This
Agreement constitutes the entire agreement of the parties with regard to the
subject matter hereof and supercedes all prior oral or written agreements
between the parties hereto or their predecessors with regard to the subject
matter hereof. This Agreement may be terminated by Written Communication from
you to AAFS or from AAFS to you. Until so terminated, this Agreement shall
continue in full force and effect. This Agreement may be supplemented or amended
by us by written notice
E-6
thereof to you, and any such supplement or amendment to this Agreement shall be
effective with respect to any Offering to which this Agreement applies after the
date you received such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Section 3(c) hereof with
regard to any Offering will terminate at the close of business on the 30th day
after the commencement of the public offering of the Securities to which such
Offering relates, but in our discretion may be extended by us for a further
period not exceeding 30 days and in our discretion, whether or not extended, may
be terminated at any earlier time.
6. Successors and Assigns. This Agreement shall be
binding on, and inure to the benefit of, the parties hereto and other persons
specified in Section 1 hereof, and the respective successors and assigns of each
of them.
7. Governing Law. This Agreement and the terms and
conditions set forth herein with respect to any Offering together with such
supplementary terms and conditions with respect to such Offering as may be
contained in any Written Communication from us to you in connection therewith
shall be governed by, and construed in accordance with, the laws of the State of
New York.
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Please confirm by signing and returning to us the enclosed copy of this
Agreement that your subscription to, or your acceptance of any reservation of,
any Securities pursuant to an Offering shall constitute (i) acceptance of and
agreement to the terms and conditions of this Agreement (as supplemented and
amended pursuant to Section 5 hereof) together with and subject to any
supplementary terms and conditions contained in any Written Communication from
us in connection with such Offering, all of which shall constitute a binding
agreement between you and us, individually or as representative of any
Underwriters, (ii) confirmation that your representations and warranties set
forth in Section 3 hereof are true and correct at that time, (iii) confirmation
that your agreements set forth in Sections 2 and 3 hereof have been and will be
fully performed by you to the extent and at the times required thereby and (iv)
in the case of any Offering described in Section 3(a) and 3(b) hereof,
acknowledgment that you have requested and received from us sufficient copies of
the final prospectus or offering circular, as the case may be, with respect to
such Offering in order to comply with your undertakings in Section 3(a) or 3(b)
hereof.
Very truly yours,
ABN AMRO FINANCIAL SERVICES, INC.
By:______________________________
Name:
Title:
CONFIRMED: ________ __, 200_
(NAME OF BROKER-DEALER)
By:__________________________
Name:
Title:
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