EXHIBIT 1.1
UNITED PARCEL SERVICE, INC.
DEBT SECURITIES
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UNDERWRITING AGREEMENT
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TO THE REPRESENTATIVES NAMED IN SCHEDULE I
OF THE SEVERAL UNDERWRITERS NAMED IN SCHEDULE II
Ladies and Gentlemen:
United Parcel Service, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the firms named in Schedule II hereto (such firms constituting the
"Underwriters") certain of its debt securities specified in Schedule III hereto
(the "Designated Securities"). The representative or representatives of the
Underwriters, if any, specified in Schedule I hereto are hereinafter referred to
as the "Representatives"; provided, however, that if Schedule I hereto does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 1(b) and 5), shall mean the
Underwriters.
1. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-.... )
(the "Initial Registration Statement") in respect of the Designated
Securities has been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus contained therein, to the
Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed or transmitted for filing with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the
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Commission pursuant to Rule 424 under the Act, is hereinafter called a
"Preliminary Prospectus"; the Initial Registration Statement, any
post-effective amendment thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference therein at the time the Initial Registration
Statement became effective but excluding the Statement of Eligibility
on Form T-1 of the Trustee (the "Form T-1"), each as amended at the
time the Initial Registration Statement or post-effective amendment
became effective or the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; the prospectus as amended or
supplemented relating to the Designated Securities, in the form in
which it is first used to confirm sales of the Designated Securities
being hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein, as of the
date of such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Initial Registration Statement shall
be deemed to refer to and include any annual report of the Company
filed pursuant to Sections 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such filing).
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents,
when they became effective or were filed with the Commission, contained
an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that 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 an
Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating
to the Designated Securities or (ii) the Form T-1;
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(c) The Registration Statement, as of its effective date or the
date of any post-effective amendment thereto, conformed, and the
Prospectus as of its issue date conformed, and any further amendments
or supplements to the Registration Statement or the Prospectus as of
their respective effective or issue dates will conform, in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and the rules and
regulations of the Commission thereunder; and (i) 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, (ii) 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, and (iii) the Prospectus, as
amended or supplemented, if applicable, at the Time of Delivery, will
not contain any untrue statement of a material fact or omit to state a
material fact necessary 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 an Underwriter
of Designated Securities through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to the Designated
Securities or (ii) the Form T-1.;
(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as otherwise
stated therein, there has not been any change in the capital stock
(other than changes due the issuance or exercise of stock options,
stock appreciation rights or other rights pursuant to employee benefit
plans described in the Registration Statement) or a material increase
in the long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development reasonably likely to result
in a material adverse change, in or affecting the business, financial
condition, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole (a "Material Adverse Change");
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority
to own its properties and conduct its business as described in the
Prospectus;
(f) The Designated Securities have been duly authorized, and,
when executed, authenticated, issued, delivered and paid for pursuant
to this Agreement and authenticated by the Trustee, will have been duly
executed, authenticated, issued and delivered and 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, entitled to the benefits
provided by the Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Indenture has
been duly
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authorized and duly qualified under the Trust Indenture Act and, at the
Time of Delivery, the Indenture will constitute 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; and the Indenture conforms, and the Designated
Securities will conform, in all material respects to the descriptions
thereof contained in the Prospectus;
(g) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture and this 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, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company is a party that is material to the Company and its
subsidiaries taken as a whole, nor will such action result in any
violation of the provisions of the Restated Certificate of
Incorporation or By-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company, except for such breaches, violations or
defaults that would not result in a Material Adverse Change; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Designated Securities or the consummation
by the Company of the transactions contemplated by this Agreement or
the Indenture, except (i) where the failure to obtain any such consent,
approval, authorization, order, registration or qualification would not
result in a Material Adverse Change and (ii) for such consents,
approvals, authorizations, orders, registrations or qualifications that
have been, or will have been prior to the Time of Delivery, obtained
under the Act and the Trust Indenture Act and or that may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Designated Securities by the Underwriters;
2. The several Underwriters propose to offer the Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
3. The Designated Securities to be purchased by each Underwriter
pursuant to this Agreement, in the form specified herein, and in such authorized
denominations and registered in such names as the Representatives may request
upon at least 48 hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to the Representatives at least 48 hours in
advance or at such other place and time and date as the Representatives and the
Company may agree upon in writing, such time and date being herein called the
"Time of Delivery."
4. The Company agrees with each of the Underwriters of the
Designated Securities:
(a) To prepare the Prospectus in relation to the Designated
Securities in a form reasonably approved by the Representatives and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further
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amendment or any supplement to the Registration Statement or Prospectus
as amended or supplemented after the date of this Agreement and prior
to the Time of Delivery if the Representatives reasonably disapprove
thereof promptly after reasonable notice thereof (provided, however,
that (i) the Company may make any such further amendment or supplement
which, in the opinion of counsel to the Company, is required by law,
and (ii) the Company shall only be required to provide the Company's
reports to be filed with the Commission pursuant to the Exchange Act to
the Representatives on the business day prior to the date on which such
filings are to be transmitted for filing with the Commission); to
advise the Representatives promptly of any such amendment or supplement
after such Time of Delivery and furnish the Representatives with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus for so long as
the delivery of a prospectus is required in connection with the
offering or sale of the Designated Securities; and during such same
period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Designated
Securities, of the suspension of the qualification of the Designated
Securities for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any prospectus relating to
the Designated Securities or suspending any such qualification, to
promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Designated
Securities for offering and sale under the securities laws of such
jurisdictions as the Representatives reasonably may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Designated Securities, provided
that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Unless otherwise agreed to by the Representatives, prior to
3:00 p.m., New York City time, on the New York Business Day next
succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus
as amended or supplemented in New York City in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine
months after the issue date of the Prospectus in connection with the
offering or sale of the Designated Securities and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be
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necessary during such same period to amend or supplement the
Prospectus, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and
electronic copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than 18 months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the later of (i) the termination of trading
restrictions for such Designated Securities, as notified to the Company
by the Representatives and (ii) the Time of Delivery, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of
the Company which mature more than one year after the Time of Delivery
and which are substantially similar to the Designated Securities,
without the prior written consent of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, DC time, on the
date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
5. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Designated Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Indenture, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Designated
Securities; (iii) all expenses in connection with the qualification of the
Designated Securities for offering and sale under state securities laws as
provided in Section 4(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with any Blue Sky survey and the preparation of any Blue Sky Memorandum; (iv)
any fees charged by securities rating services for rating the Designated
Securities; (v) any filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Designated Securities; (vi) the cost of preparing the Designated
Securities; (vii) the fees and expenses of any Trustee and any agent of any
Trustee and the reasonable fees and disbursements of counsel for any Trustee in
connection with any Indenture and the Designated Securities; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which
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are not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 7 and 10 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees and expenses of their counsel, transfer taxes on resale of any of the
Designated Securities by them, and any advertising or roadshow expenses
connected with any offers they may make.
6. The obligations of the Underwriters under this Agreement shall
be subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in this
Agreement are, at and as of the Time of Delivery, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented shall have been
filed with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under the Act and
in accordance with Section 4(a) hereof; if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the Representatives'
reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated the Time of Delivery,
with respect to the valid existence of the Company, the validity of the
Designated Securities, the Registration Statement, the Prospectus and as such
other related matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) King Spalding LLP, special counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Time of
Delivery, in form and substance reasonably satisfactory to the Representatives,
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 under such
laws to own its properties and conduct its business as
described in the Prospectus as amended or supplemented.
(ii) The Indenture has been duly authorized,
executed and delivered by the Company; the Indenture
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.
(iii) The Designated Securities have been duly
authorized and, when executed, authenticated, issued and
delivered in the manner provided for in the Indenture against
payment therefor as provided in this Agreement, will (A)
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, subject, as to enforcement of
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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 (B) be entitled to the benefits of the
Indenture. The Designated Securities and the Indenture conform
in all material respects to the descriptions thereof in the
Prospectus as amended or supplemented.
(iv) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required to be obtained by the Company for the
issuance, sale and delivery of the Designated Securities by
the Company or for the consummation by the Company of the
transactions contemplated by this Agreement, except such as
have been obtained and made under the Act and the Trust
Indenture Act and such as may be required under state
securities laws.
(v) This Agreement has been duly authorized,
executed and delivered by the Company.
(vi) The Registration Statement has become
effective under the Act, and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending under the
Act; and the Registration Statement, as of its effective date,
and the Prospectus, as amended or supplemented as of its issue
date and the Time of Delivery, complied as to form in all
material respects with the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations (in each case
other than the financial statements and notes thereto, the
financial statement schedules and other financial and
statistical data and Form T-1 included or incorporated by
reference therein).
In addition, such counsel 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
Underwriters 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 do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus as amended or supplemented, on
the basis of the information that was developed in the course of the
performance of the services referred to above, nothing has come to its
attention that causes it to believe that (a) the Registration Statement
or any further amendment thereto made by the Company prior to the Time
of Delivery (other than the financial statements and notes thereto, the
financial statement schedules and other financial and statistical data
and 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 or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery (other than
the financial statements and notes thereto and the financial
8
statement schedules and other financial and statistical data included
or incorporated by reference therein), as of its issue date and as of
the Time of Delivery, contained or contains any untrue statement of a
material fact or omitted 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.
(d) A representative of the Legal Department of for the Company
satisfactory to the Representatives shall have furnished to the Representatives
his or her written opinion, dated the Time of Delivery, in form and substance
reasonably satisfactory to the Representatives, 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 be so qualified would result in a
Material Adverse Change.
(ii) Each subsidiary of the Company that is a
"significant subsidiary", as defined in Rule 1-02(w) of
Regulation S-X under the Act (each a "Significant
Subsidiary"), has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
it owns or leases substantial properties or in which the
conduct of its business requires such qualification, except to
the extent that the failure to be so qualified or be in good
standing would not result in a Material Adverse Change.
(iii) The execution, delivery and performance of
the Indenture, this Agreement and the issuance and sale of the
Designated Securities by the Company and the consummation of
the transactions contemplated herein and therein by the
Company (a) do not and will not result in any violation of the
certificate of incorporation or bylaws of the Company, (b) to
the knowledge of such counsel, do not 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 Significant Subsidiary that is
material to the Company and its subsidiaries taken 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 material judgment, order, writ, injunction or
decree known to such counsel of any governmental authority or
court having jurisdiction over the Company. The Company has
the corporate power and authority to authorize, issue and sell
the Designated Securities 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
9
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 accurately summarize in all
material respects such documents (or provisions thereof),
statutes (or provisions thereof) or legal proceedings.
(v) To the knowledge of such counsel, (a) there
are no 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, and (b) there are no statutes,
regulations or contracts that are required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required.
(e) At the Time of Delivery for the Designated Securities, the
independent accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the effective date of the Registration Statement
or the date of the most recent report filed with the Commission containing
financial statements and incorporated by reference in the Registration
Statement, if the date of such report is later than such effective date, and a
letter dated such Time of Delivery, respectively, to the effect set forth in
Annex I hereto, and with respect to such letter dated such Time of Delivery, as
to such other matters as the Representatives may reasonably request and in form
and substance satisfactory to the Representatives (the executed copy of the
letter delivered prior to the execution of this Agreement is attached as Annex I
hereto);
(f) Since the execution and delivery of this Agreement, neither
the Company nor any of its subsidiaries shall have sustained any loss or
interference with its business from any calamity, labor dispute or court or
governmental action, order or decree, other than as set forth in or contemplated
by the Prospectus (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement), and there shall not have been any change in the
capital stock (other than changes due the issuance or exercise of stock options,
stock appreciation rights or other rights pursuant to employee benefit plans
described in the Registration Statement) or a material increase in the long-term
debt of the Company or any of its subsidiaries or any change, or any development
reasonably likely to result in a change, in or affecting the business, financial
condition, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement) reviewed by the Representatives at the time of execution and
delivery of this Agreement, the effect of which in any such case is in your
judgment so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Designated Securities on
the terms and in the manner contemplated in the Prospectus;
(g) On or after the date of this Agreement (i) no downgrading
shall have occurred in the rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating organization",
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities or preferred stock;
10
(h) On or after the date of this Agreement there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's securities on the
New York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war or (v) the occurrence of any other calamity or crisis
or any material adverse change in financial, political or economic conditions in
the United States or elsewhere, if the effect of any such event specified in
clause (iv) or (v) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(i) The Company shall have complied with the provisions of Section
4(c) hereof; and
(j) The Company shall have furnished or caused to be furnished to
the Representatives at the Time of Delivery a certificate or certificates of
officers of the Company satisfactory to the Representatives as to the accuracy
of the representations and warranties of the Company herein at and as of the
Time of Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to the Time of Delivery, as to the matters
set forth in subsections (a) and (f) of this Section and as to such other
matters as the Representatives may reasonably request.
7. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Designated
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to the Designated
Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a
11
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel 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 shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim 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 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above 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 the Underwriters
on the other from the offering of the Designated Securities 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 or if the indemnified party failed to give the notice required
under subsection (c) above, then each
12
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
the Underwriters of the Designated Securities 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 such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. 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 relates to information supplied by the Company on the one hand
or such Underwriters 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 the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters 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 subsection (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
subsection (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 subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations with respect to the Designated Securities and not joint.
(e) The obligations of the Company under this Section 7 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
8. (a) If any Underwriter shall default in its obligation to
purchase the Designated Securities which it has agreed to purchase under this
Agreement, the Representatives may in their discretion arrange for themselves or
another party or other parties to purchase such Designated Securities on the
terms contained herein. If within 36 hours after such default by any Underwriter
the Representatives do not arrange for the purchase of such Designated
Securities, then the Company shall be entitled to a further period of 36 hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Company that they have so arranged for the purchase of such
13
Designated Securities, or the Company notifies the Representatives that it has
so arranged for the purchase of such Designated Securities, the Representatives
or the Company shall have the right to postpone the Time of Delivery for such
Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Designated Securities.
10. If this Agreement shall be terminated pursuant to Section 8
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities except as provided in Sections 5 and 7
hereof; but, if for any other reason Designated Securities are not delivered by
or on behalf of the Company as provided herein, other than the
14
occurrence of an event described in Section 6(g)(i), (iii), (iv) or (v), the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including the
reasonable fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of such
Designated Securities, but the Company shall then be under no further liability
to any Underwriter with respect to such Designated Securities except as provided
in Sections 5 and 7 hereof.
11. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in Schedule I to this Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in
Schedule I to this Agreement; and if to the Company shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement: Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Designated Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, DC is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
16 The Company is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, and all materials of any kind (including tax opinions and
other tax analyses) related to those benefits, without the Underwriters imposing
any limitation of any kind.
15
If the foregoing is in accordance with your understanding, please sign
and return to us _____ counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this Agreement shall constitute a binding
agreement between each of the Underwriters and the Company. It is understood
that your acceptance of this Agreement on behalf of each of the Underwriters is
or will be pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
United Parcel Service, Inc.
By:
-----------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name of Book-Running Representative(s)]
[Name(s) of Co-Representative(s)]
[By:
-----------------------------------------
[[Name(s) of Co-Representative Corporation(s)]
[By:
-----------------------------------------
Name:
Title:
-----------------------------------------
[(Name(s) of Co-Representative
Partnership(s))](1)]
On behalf of each of the Underwriters
1
SCHEDULE I
REPRESENTATIVES OF THE SEVERAL UNDERWRITERS
1
SCHEDULE II
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
Total..................................... ---------------
$
===============
1
SCHEDULE III
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due ,
AGGREGATE PRINCIPAL AMOUNT:
[$]
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus
accrued interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus
accrued interest from to [and accrued amortization[, if
any,] from to ]
FORM OF DESIGNATED SECURITIES:
[Definitive form to be made available for checking and packaging at
least twenty-four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds
TIME OF DELIVERY:
a.m. (New York City time), , 20
INDENTURE:
Indenture dated , 20 , between the Company and ,
as Trustee
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates, commencing ....................., 20..]
1
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before ,
%, and if] redeemed during the 12-month period beginning ,
REDEMPTION
YEAR PRICE
---- -----
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at
the election of the Company, at a redemption price equal to the
principal amount thereof, plus accrued interest to the date of
redemption.]]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking
fund to retire [$ ] principal amount of Designated Securities
on in each of the years through
at 100% of their principal amount plus accrued interest[,
together with [cumulative] [noncumulative] redemptions at the option of
the Company to retire an additional [$ ] principal amount of Designated
Securities in the years through at 100% of their principal
amount plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
EXTENDABLE PROVISIONS:
Designated Securities are repayable on , [insert date and
years], at the option of the holder, at their principal amount with
accrued interest. The initial annual interest rate will be %, and
thereafter the annual interest rate will be adjusted on , and
to a rate not less than % of the effective annual interest rate
on U.S. Treasury obligations with -year maturities as of the
[insert date 15 days prior to maturity date] prior to such [insert
maturity date].]
[If Designated Securities are floating rate debt securities, insert--
2
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through [and thereafter
will be adjusted [monthly] [on each , , and ] [to an
annual rate of % above the average rate for -year [month]
[securities][certificates of deposit] issued by and
[insert names of banks].] [and the annual interest rate
[thereafter] [from through ] will be the interest yield
equivalent of the weekly average per annum market discount rate for
-month Treasury bills plus % of Interest Differential
(the excess, if any, of (i) the then current weekly average per annum
secondary market yield for -month certificates of deposit
over (ii) the then current interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury
bills); [from and thereafter the rate will be the then current
interest yield equivalent plus % of Interest Differential].]
DEFEASANCE PROVISIONS:
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
ADDITIONAL CLOSING CONDITIONS:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
3
ANNEX I
Pursuant to Section 6(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable rules and regulations adopted by the Commission;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related rules and
regulations; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been furnished to the representative or representatives of the
Underwriters (the "Representatives") such term to include an
Underwriter or Underwriters who act without any firm being designated
as its or their representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon, copies of which have been furnished
to the Representatives; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility
for financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related rules and regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for five
such fiscal years included or incorporated by reference in the
Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with
F-1
the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the published rules and regulations
adopted by the Commission, or (ii) any material modifications
should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the rules and regulations adopted by the Commission
thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of
F-2
performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of
the latest balance sheet included or incorporated by reference
in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance
sheet included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by
the Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
F-3
