EXHIBIT 1
UNITED PARCEL SERVICE OF AMERICA, INC.
DEBT SECURITIES
FORM OF UNDERWRITING AGREEMENT
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DATED AS OF _____________, 1999
1. Introductory. United Parcel Service of America, Inc., a Delaware
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corporation (the "Company"), proposes to issue and sell from time to time
certain of its debt securities ("Debt Securities") in an aggregate principal
amount expressed in U.S. dollars or in such foreign currencies or currency units
as the Company shall designate at the time of offering. Such Debt Securities
registered under the registration statement referred to in Section 2(a) are
hereinafter referred to as "Registered Securities". Registered Securities
involved in any underwritten offering referred to below are hereinafter
collectively referred to as "Underwritten Securities", and such Underwritten
Securities that are to be sold in such an underwriting are hereinafter referred
to as "Purchased Debt Securities". The Debt Securities will be issued under an
Indenture, dated as of _________, 1999 (the "Indenture"), between the Company
and Citibank, N.A,, as Trustee, specified in the Terms Agreement referred to in
Section 3, in one or more series or issues, which may vary as to interest rates,
maturities, redemption provisions, exercise prices, expiration dates, selling
prices, currency or currency units and other terms, with in each case all such
terms for any particular Registered Securities being determined at the time of
sale. Particular Purchased Debt Securities will be sold pursuant to a Terms
Agreement and for resale in accordance with terms of offering determined at the
time of sale.
The firm or firms which agree to purchase the Purchased Debt Securities are
hereinafter referred to as the "Underwriters" of such Purchased Debt Securities,
and the representative or representatives of the Underwriters, if any, specified
in a Terms Agreement referred to in Section 3 are hereinafter referred to as the
"Representatives"; provided, however, that if the Terms Agreement does not
specify any representative of the Underwriters, the term "Representatives", as
used in this Agreement (other than in Sections 2(b), 5 and 6 and the second
sentence of Section 3), shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, each Underwriter that:
(a) Registration Statement. A registration statement (No. 333-08369),
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including a prospectus, relating to the Registered Securities has been
filed with the Securities and Exchange Commission (the "Commission") and
such amendments thereto as may have been required to the date hereof have
been filed and such registration statement has become effective. Such
registration statement, as amended at the time of any Terms Agreement
referred to in Section 3, is hereinafter referred to as the "Registration
Statement", and the prospectus included in such Registration Statement, as
supplemented as contemplated by Section 3 to reflect the terms of the
Registered Securities and the terms of offering thereof, including all
material incorporated by reference therein, is hereinafter referred to as
the "Prospectus". All financial statements
and schedules included in material incorporated by reference into the
Prospectus shall be deemed included in the Prospectus.
(b) Compliance. On the effective date of the registration statement
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relating to the Registered Securities, such registration statement or, if
one or more post-effective amendments shall have been filed with respect to
such registration statement, on the most recent effective date of such
post-effective amendments, such registration statement, as so amended,
conformed in all material respects to the requirements of the Securities
Act of 1933 (the "Securities Act"), the Trust Indenture Act of 1939 (the
"Trust Indenture Act") and the rules and regulations of the Commission (the
"Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and, on
the date of each Terms Agreement referred to in Section 3 and on each
Closing Date as defined in Section 3, the Registration Statement and the
Prospectus will conform in all respects to the requirements of the
Securities Act, the Trust Indenture Act and the Rules and Regulations, and
none of such documents will include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by any
Underwriter through the Representatives, if any, specifically for use
therein.
(c) Authorization of Underwriting Agreement and Terms Agreement. This
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Underwriting Agreement has been, and the applicable Terms Agreement as of
the date thereof will have been, duly authorized, executed and delivered by
the Company.
(d) Authorization of Debt Securities. Underwritten Securities issued
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and sold pursuant to the applicable Terms Agreement, as of the date of such
Terms Agreement, will have been duly authorized by the Company for issuance
and sale pursuant to this Underwriting Agreement and such Terms Agreement.
Such Underwritten Securities, when issued and authenticated in the manner
provided for in the Indenture and delivered against payment of the
consideration therefor specified in such Terms Agreement, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
or by general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), and except further as
enforcement thereof may be limited by requirements that a claim with
respect to any Debt Securities payable in a foreign or composite currency
(or a foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or by governmental authority to
limit, delay or prohibit the making of payments outside the United States.
Such Underwritten Securities will be in the form contemplated by, and each
registered holder thereof is entitled to the benefits of, the Indenture.
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(e) Authorization of Indenture. The Indenture has been, and for each
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issuance of Underwritten Securities the Indenture will be, duly authorized,
executed and delivered by the Company, and upon such authorization,
execution and delivery by the Company, will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally or by general
equitable principles (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(f) Absence of Defaults and Conflicts. The Company is not in violation
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of its charter or bylaws or in default in the performance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Company is subject
(collectively, "Agreements and Instruments"), except for such defaults that
would not result in a Material Adverse Effect (as defined below). The (A)
execution, delivery and performance of this Underwriting Agreement, the
Indenture and each applicable Terms Agreement and any other agreement or
instrument entered into or issued or to be entered into or issued by the
Company in connection with the transactions contemplated hereby or thereby
or in the Registration Statement and the Prospectus, and (B) consummation
of the transactions contemplated therein (including the issuance and sale
of the Underwritten Securities) and compliance by the Company with its
obligations hereunder and thereunder, have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the Company
pursuant to any Agreements and Instruments, nor will such action result in
any violation of the provisions of the charter or bylaws of the Company or
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court (domestic or
foreign), having jurisdiction over the Company or any of its assets,
properties or operations, except for such conflicts, breaches or defaults
that would not result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition that gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company.
(g) Financial Statements. The financial statements of the Company
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included in the Registration Statement and the Prospectus, together with
the related schedules and notes thereto (the "Financial Statements"),
present fairly in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the periods
specified therein. Such Financial Statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The selected
financial data and summary unaudited financial information (if any)
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
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financial statements included in the Registration Statement and Prospectus.
[In addition, any pro forma financial statements of the Company and its
consolidated subsidiaries and the related notes thereto included in the
Registration Statement and Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparations thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.]
(h) No Material Adverse Change. Since the respective dates as of
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which information is given in the Registration Statement and Prospectus,
except as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company, other than those arising in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries considered as one enterprise, and (C) except for
regular dividends on the Company's common stock or preferred stock, in
amounts per share that are consistent with past practice and its charter
and bylaw documents (as amended), there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
3. Purchase and Offering of Securities. The obligation of the
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Underwriters to purchase the Purchased Debt Securities will be evidenced by an
exchange of telegraphic or other written communications (the "Terms Agreement")
at the time the Company determines to sell the Purchased Debt Securities. The
Terms Agreement will incorporate by reference the provisions of this Agreement,
except as otherwise provided therein, and will specify the firm or firms which
will be Underwriters, the names of any Representatives, the principal amount of
Purchased Debt Securities to be purchased by each Underwriter, the purchase
price to be paid by the Underwriters and the terms of the Purchased Debt
Securities not already specified in the Indenture, including, but not limited
to, interest rate, maturity, any redemption provisions and any sinking fund
requirements, and whether any of the Purchased Debt Securities may be sold to
institutional investors pursuant to Delayed Delivery Contracts (as defined
below). The Terms Agreement will also specify the time and date of delivery and
payment (such time and date, or such other time and date as the Representatives
and the Company agree as the time for payment and delivery, being herein and in
the Terms Agreement referred to as the "Closing Date"), the place of delivery
and payment and any details of the terms of offering that should be reflected in
the prospectus supplement relating to the offering of the Purchased Debt
Securities. The obligations of the Underwriters to purchase the Purchased Debt
Securities will be several and not joint. It is understood that the Underwriters
propose to offer the Purchased Debt Securities for sale as set forth in the
Prospectus. The Purchased Debt Securities delivered to the Underwriters on the
Closing Date will be in fully registered or bearer form in such denominations
and numbers and registered in such names as the Underwriters may request.
If the Terms Agreement provides for sales of Purchased Debt Securities
pursuant to delayed delivery contracts, the Company authorizes the Underwriters
to solicit offers to purchase
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Purchased Debt Securities pursuant to delayed delivery contracts substantially
in the form of Annex I attached hereto ("Delayed Delivery Contracts") with such
changes therein as the Company may authorize or approve. Delayed Delivery
Contracts are to be with institutional investors, including commercial and
savings banks, insurance companies, pension funds, investment companies and
educational and charitable institutions. On the Closing Date the Company will
pay, as compensation, to the Representatives for the accounts of the
Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Purchased Debt Securities to be sold pursuant to Delayed
Delivery Contracts ("Contract Securities"). The Underwriters will not have any
responsibility in respect of the validity or the performance of Delayed Delivery
Contracts. If the Company executes and delivers Delayed Delivery Contracts, the
Contract Securities will be deducted from the Debt Securities to be purchased by
the several Underwriters and the aggregate principal amount of Purchased Debt
Securities to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Purchased Debt Securities set forth
opposite each Underwriter's name in such Terms Agreement, except to the extent
that the Representatives determine that such reduction shall be otherwise than
pro rata and so advise the Company. The Company will advise the Representatives
not later than the business day prior to the Closing Date of the Purchased Debt
Securities that are the Contract Securities.
4. Certain Agreements of the Company. The Company agrees with the several
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Underwriters that it will furnish to the Representatives one signed copy of the
Registration Statement relating to the Registered Securities, including all
exhibits, in the form it became effective and of all amendments thereto and
that, in connection with each offering of Debt Securities:
(a) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus (whether pursuant to the Securities Act or the Exchange Act) and
will afford the Representatives a reasonable opportunity to comment on any
such proposed amendment or supplement during the offering period; and the
Company will also advise the Representatives promptly of the filing of any
such amendment or supplement and of the institution by the Commission of
any stop order proceedings in respect of the Registration Statement or of
any part thereof and will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible its lifting, if
issued.
(b) If, at any time when a prospectus relating to the Debt Securities
is required to be delivered under the Securities Act, any event occurs 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 to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Securities
Act, the Company promptly will prepare and file with the Commission an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance, and will afford the
Representatives a reasonable opportunity to comment on any such proposed
amendment or supplement during the offering period.
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(c) As soon as practicable, but not later than 18 months, after the
date of each Terms Agreement, the Company will make generally available to
its security holders an earnings statement covering a period of at least 12
months beginning after the later of (i) the most recent effective date of
the registration statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such Terms
Agreement and (iii) the date of the Company's most recent Annual Report on
Form 10-K filed with the Commission prior to the date of such Terms
Agreement, which will satisfy the provisions of Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158 of the
Rules and Regulations under the Securities Act).
(d) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement and all
amendments and supplements to such documents, in each case as soon as
available, and copies of the Prospectus and all amendments and supplements
to the Prospectus not later than 10:00 A.M., New York City time, on the day
following the date thereof or as soon thereafter as practicable. The
Company will furnish each of such documents in such quantities as are
reasonably requested.
(e) The Company will arrange for the qualification of the Debt
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions within the United States as
the Representatives designate and will continue such qualifications in
effect so long as required for the distribution; provided that the Company
will not be required to qualify to do business in any jurisdiction where it
is not now qualified or to take any action which would subject it to
general or unlimited service of process in any jurisdiction where it is not
now subject.
(f) During the period of five years after the date of any Terms
Agreement, the Company will furnish to the Representatives (i) as soon as
available, a copy of each Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Current Report on Form 8-K of the Company filed with the
Commission under the Securities Exchange Act of 1934 (the "Exchange Act")
or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as the Representatives may reasonably
request.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters
for any expenses (including fees and disbursements of counsel) incurred by
them in connection with qualification of the Registered Securities for sale
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representatives may designate and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Debt Securities, for the filing fee of the
National Association of Securities Dealers, Inc. relating to the Registered
Securities and for expenses incurred in distributing the Prospectus, any
preliminary prospectuses and any preliminary prospectus supplements to
Underwriters.
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(h) For a period beginning at the time of execution of the Terms
Agreement and ending on the Closing Date, without the prior consent of the
Representatives, the Company will not offer or contract to sell or, except
pursuant to a commitment entered into prior to the date of the Terms
Agreement, sell or otherwise dispose of any debt securities denominated in
the currency or currency unit in which the Debt Securities are denominated
and issued or guaranteed by the Company and having a maturity of more than
one year from the date of issue.
5. Conditions of the Obligations of the Underwriters. The obligations of
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the several Underwriters to purchase and pay for the Purchased Debt Securities
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) If required by the applicable Terms Agreement, on or prior to the
date of the Terms Agreement, the Representatives, or counsel for the
Underwriters, shall have received a letter of Deloitte & Touche LLP,
confirming that they are independent certified public accountants within
the meaning of the Securities Act and the applicable published Rules and
Regulations thereunder and stating in effect that:
(i) in their opinion, the financial statements and schedules of
the Company audited by them and included in the prospectus contained
in the registration statement relating to the Registered Securities,
as amended at the date of such letter, comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the related published Rules
and Regulations;
(ii) on the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement on Auditing
Standards Xx. 00, Xxxxxxx Xxxxxxxxx Xxxxxxxxxxx ("XXX Xx. 00") on any
unaudited interim condensed consolidated financial statements of the
Company included in such prospectus, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that (A) the unaudited interim condensed
consolidated financial statements, if any, of the Company included in
such prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it
applies to Quarterly Reports on Form 10-Q and the related published
Rules and Regulations, (B) any material modifications should be made
for them to be in conformity with generally accepted accounting
principles; (C) the unaudited interim condensed consolidated financial
statements of the Company, if any, included in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published Rules and Regulations or require any material modifications
to be made for them to be in
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conformity with generally accepted accounting principles; or (D) at
the date of the latest available consolidated financial statements of
the Company read by such accountants, and at a subsequent specified
date not more than three business days prior to the Closing Date, (i)
there was any change in capital stock, increase in the long-term debt
of the Company, (exclusive of any short-term borrowings reclassified
as long-term based upon the Company's ability and intention to
refinance these short-term borrowings on a long-term basis) or a
decrease in consolidated net current assets or stockholder's equity,
all as compared with amounts shown on or included in the latest
balance sheet of the Company included in the Prospectus or (ii) there
were any decreases in consolidated revenue or in the total or basic
per share amounts of net income, as compared with the corresponding
period in the preceding year.
(iii) on the basis of a reading of any unaudited pro forma
condensed combined financial statements of the Company included in
such prospectus, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that the unaudited pro forma condensed combined financial
statements included in such prospectus do not comply in form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and that the pro forma adjustments, if any,
have not been properly applied to the historical amounts in the
compilation of those statements; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in such prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
obtained from accounting records that are subject to the internal
control structure, policies and procedures of the Company's accounting
system or are derived directly from such accounting records by
analysis or computation) with the results obtained from procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into such prospectus shall be deemed included in such prospectus for
purposes of this subsection.
(b) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change in the long-term debt of the Company or
any change, or any development involving a prospective change, in or
affecting the general affairs, financial
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position, stockholders' equity or results of operations of the Company,
otherwise than as set forth or contemplated in the Prospectus, the effect
of which is, in the reasonable judgment of the Representatives exercised in
good faith, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Purchased Debt Securities on the terms and in the manner contemplated in
the Prospectus; (ii) any downgrading in the rating of the Company's debt
securities by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Securities Act), and no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
such debt securities; (iii) any banking moratorium declared by Federal or
New York authorities, or the authorities of any country in whose currency
any Purchased Debt Securities are denominated under the applicable Terms
Agreement; (iv) any outbreak or escalation of major hostilities in which
the United States or any country in whose currency any Purchased Debt
Securities are denominated under the applicable Terms Agreement is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the reasonable
judgment of the Representatives exercised in good faith, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and
payment for the Purchased Debt Securities; or (v) any 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 reasonable judgment of
the Representatives to proceed with the public offering or delivery of the
Purchased Securities on the terms and in the manner contemplated in the
Prospectus.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of Hunton & Xxxxxxxx, counsel for the Company, to the effect
that:
(i) the Company has been duly incorporated and is an existing
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 the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which it owns or leases substantial
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;
(ii) the Indenture has been duly authorized, executed and
delivered by the Company; the Indenture has been duly qualified under
the Trust Indenture Act; the Purchased Debt Securities have been duly
authorized; the Purchased Debt Securities other than any Contract
Securities have been duly executed, authenticated, issued and
delivered; the Indenture, and the Purchased Debt Securities and any
Contract Securities constitute, when executed, authenticated, issued
and delivered in the manner provided in the Indenture and any Contract
Securities, when executed, authenticated, issued and delivered in the
manner provided in the Indenture and sold pursuant to Delayed Delivery
Contracts, will
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constitute, valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, to general equity principles and any implied
covenant of good faith and fair dealing; and the Purchased Debt
Securities and any Contract Securities conform, and any Contract
Securities, when so issued and delivered and sold, will conform, to
the description thereof contained in the Prospectus;
(iii) no consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Terms Agreement
(including the provisions of this Agreement) in connection with the
issuance or sale of the Purchased Debt Securities by the Company,
except such as have been obtained and made under the Securities Act
and the Trust Indenture Act and such as may be required under state
securities laws;
(iv) the execution, delivery and performance of the Indenture,
the Terms Agreement (including the provisions of this Agreement), and
any Delayed Delivery Contracts and the issuance and sale of the
Purchased Debt Securities and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, the charter or by-
laws of the Company, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any of its properties or any agreement or instrument to
which the Company is a party or by which the Company is bound or to
which any of the properties of the Company is subject, and the Company
has full power and authority to authorize, issue and sell the
Purchased Debt Securities as contemplated by the Terms Agreement
(including the provisions of this Agreement);
(v) the Registration Statement has become effective under the
Securities Act, and, to the knowledge of such counsel, 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 or contemplated under the Securities
Act, and the registration statement relating to the Registered
Securities, as of its effective date, the Registration Statement and
the Prospectus, as of the date of the Terms Agreement, and any
amendment or supplement thereto, as of its date, complied as to form
in all material respects with the requirements of the Securities Act,
the Trust Indenture Act and the Rules and Regulations; such counsel
have no reason to believe that such registration statement, as of its
effective date, or any amendment or supplement thereto, as of its
date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto contains any untrue
statement of a material fact or omits to
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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; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel do not know of any
legal or governmental proceedings required to be described in the
Prospectus which are not described as required or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement or the Prospectus or any such amendment or
supplement; and
(vi) the Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company.
In rendering such opinion, Hunton & Xxxxxxxx may state that in clause
(iii) with respect to the validity and enforceability of the Indenture, and the
Purchased Debt Securities, and in clause (iv) and in clause (v) with respect to
any statute, rule, regulation or order of any governmental agency, body or court
and the power and authority of the Company to authorize, issue and sell the
Purchased Debt Securities, such counsel has assumed that under the laws of any
country in whose currency (or whose currency is a component currency of a
currency unit in which) any Purchased Debt Securities are denominated or
payable, if other than in U.S. dollars, or of any other governmental authority
having jurisdiction over any such currency unit, that no consent, approval,
authorization, or order of, or filing with any governmental agency, body or
court is required for the consummation of the transactions contemplated
hereunder in connection with the issuance and sale of the Purchased Debt
Securities and compliance with the terms and provisions thereof will not result
in any breach or violation of any of the terms and provisions in any statute,
rule, regulation or order of any governmental agency or body or any court.
(e) The Representatives shall have received from Xxxxx & Wood LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Purchased Debt Securities, the Registration Statement, the Prospectus and
other related matters as they may require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(f) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
11
at or prior to the Closing Date, that 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
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operation of the
Company and its subsidiaries except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(g) The Representatives shall have received a letter, dated the
Closing Date, of ______________________________, which reconfirms the
matters set forth in any letter delivered pursuant to subsection (a) of
this Section.
12
(h) The Representatives shall have received, so long as financial
statements audited by any independent accountants for or with respect to
any entity acquired by the Company are included in the Prospectus, a
letter, dated the Closing Date, of such accountants confirming that as of a
specified date immediately prior to such acquisition and during the period
covered by the financial statements on which they reported, they were
independent accountants with respect to such entity within the meaning of
the Securities Act and the applicable published Rules and Regulations
thereunder and stating in effect that:
(i) in their opinion, the consolidated financial statements
audited by them and included in the Prospectus comply in form in all
material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the related published Rules
and Regulations, with respect to Registration Statements on Form S-3;
and
(ii) on the basis of performing the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in SAS No. 71, inquiries of
officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that the unaudited
financial statements of such entity at any date and for any period
ending on or prior to the date of the latest unaudited balance sheet
of such entity included in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the Securities Act and the related published Rules and Regulations or
any material modifications should be made for them to be in conformity
with generally accepted accounting principles.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for
purposes of this subsection.
13
(i) The Representatives shall have received from counsel,
satisfactory to the Representatives, such opinion or opinions, dated the
Closing Date, with respect to compliance with the laws of any country,
other than the United States, in whose currency Purchased Debt Securities
are denominated, the validity of the Purchased Debt Securities, the
Prospectus and other related matters as they may require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(j) If applicable to the offering of any Purchased Debt Securities,
the Representatives shall have received an opinion from Hunton & Xxxxxxxx,
special tax counsel for the Company, dated the Closing Date, confirming
their opinion as to United States tax matters set forth in the Prospectus.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as they reasonably request.
6. Indemnification and Contribution. (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 Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, 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 loss, claim, damage,
liability or action as such expenses are incurred, provided, however, that the
Company will 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 in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein; and provided further, that as to any preliminary
prospectus this indemnity agreement shall not inure to the benefit of any
Underwriter or any person controlling that Underwriter on account of any loss,
claim, damage or liability arising from the sale of Purchased Debt Securities to
any person by that Underwriter if that Underwriter failed to send or give a copy
of the Prospectus, as the same may be amended or supplemented, to that person
within the time required by the Securities Act, and the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in such preliminary prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Company with
Section 4(d). For purposes of the second proviso to the immediately preceding
sentence, the term Prospectus shall not be deemed to include the documents
incorporated therein by reference, and no Underwriter shall be obligated to send
or give any supplement or amendment to any document incorporated by reference in
a preliminary prospectus or the Prospectus to any person other than a person to
whom such Underwriter has delivered such incorporated documents in response to a
written request therefor.
14
(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 Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or the
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 reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives, if any, specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. 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 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 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. Notwithstanding anything herein to the
contrary, if in the reasonable judgment of the indemnified party a conflict of
interest in the action exists between the indemnified and indemnifying parties,
the indemnified party nevertheless may select its own counsel and also defend
against the action, and in such case the indemnifying party shall pay all
reasonable fees and expenses of such counsel. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
15
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) 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 Purchased
Debt Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the 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 or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of 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 action or claim which is the subject of this
subsection (d). 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 Purchased Debt 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 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 Securities Act; and the obligations of the
Underwriters under this Section 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 director of the Company, to each officer of the Company
who has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Securities Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
-----------------------
their obligations to purchase Purchased Debt Securities under the Terms
Agreement and the aggregate amount of the Purchased Debt Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the aggregate amount of the Purchased Debt Securities, the
Representatives may make arrangements satisfactory to the Company for the
16
purchase of such Purchased Debt Securities by other persons, including any of
the Underwriters, but if no such arrangements are made by the Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments under this Agreement and the Terms Agreement, to purchase
the Purchased Debt Securities that such defaulting Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate amount of the Purchased Debt Securities with respect to which such
default or defaults occur exceeds 10% of the aggregate amount of the Purchased
Debt Securities and arrangements satisfactory to the Representatives and the
Company for the purchase of such Purchased Debt Securities by other persons are
not made within 36 hours after such default, such Terms Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except as provided in Section 8. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. As used in this Section only, the "aggregate amount" of Purchased Debt
Securities shall mean the aggregate principal amount of any Purchased Debt
Securities Nothing herein will relieve a defaulting Underwriter from liability
for its default. The respective commitments of the several Underwriters for the
purposes of this Section shall be determined without regard to reduction in the
respective Underwriters' obligations to purchase the amount of Purchased Debt
Securities set forth opposite their names in the Terms Agreement as a result of
Delayed Delivery Contracts entered into by the Company.
The foregoing obligations and agreements set forth in this Section will not
apply if the Terms Agreement specifies that such obligations and agreements will
not apply.
8. Survival of Certain Representations and Obligations. The respective
---------------------------------------------------
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person and will survive delivery of and
payment for the Purchased Debt Securities. If the obligations of the
Underwriters with respect to any offering of Purchased Debt Securities are
terminated pursuant to Section 7 or if for any reason the purchase of the
Purchased Debt Securities by the Underwriters under a Terms Agreement is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 4 and the respective obligations of the
Company and the Underwriters pursuant to Section 6 shall remain in effect. If
for any reason the purchase of the Purchased Debt Securities by the Underwriters
is not consummated other than because of the termination of this Agreement
pursuant to Section 7 or a failure to satisfy the conditions set forth in
Section 5(c), the Company shall reimburse the Underwriters, severally, for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Purchased Debt
Securities.
9. Notices. All communications hereunder will be in writing and, if sent
-------
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 55 Glenlake
00
Xxxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Senior Vice
President, General Counsel and Secretary.
10. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the Company and such Underwriters as are identified in Terms
Agreements and their respective successors and the officers and directors and
controlling persons referred to in Section 5, and no other person will have any
right or obligation hereunder.
11. Applicable Law. This Agreement and the Terms Agreement shall be
--------------
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to principles of conflicts of laws of such state.
Each of the parties hereto waives to the fullest extent permitted by law any
right it may have to a trial by jury in respect of any claim, demand, action or
cause of action based on, arising out of, under or in connection with this
Agreement.
18
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M.,
Eastern Standard time, on ________________, 19__*.)
DELAYED DELIVERY CONTRACT
-------------------------
[Insert date of initial public offering]
UNITED PARCEL SERVICE OF AMERICA, INC.
c/o [Insert name and address of lead Underwriter]
Attention:
Gentlemen:
The undersigned hereby agrees to purchase from United Parcel Service of
America, Inc., a Delaware corporation ("Company"), and the Company agrees to
sell to the undersigned, [If one delayed closing, insert--as of the date hereof,
for delivery on ______________ 19__ ("Delivery Date"),]
$_____________________
principal amount of the Company's [Insert title of debt securities] ("Debt
Securities") and
_____________________
offered by the Company's Prospectus dated , 19 and a Prospectus
Supplement dated , 19 relating thereto, receipt of copies of
which is hereby acknowledged, at % of the principal amount of the Debt
Securities plus accrued interest, if any, and on the further terms and
conditions set forth in this Delayed Delivery Contract ("Contract").
[If two or more delayed closings, insert the following:
The undersigned will purchase from the Company as of the date hereof, for
delivery on the dates set forth below, Debt Securities in the principal amounts
and number, respectively, set forth below:
Principal Amount
of Debt
Delivery Date Securities
------------- ----------
______________________ ________________
______________________ ________________
--------------------
* Insert date which is third full business day prior to Closing Date under
the Terms Agreement.
19
Each of such delivery dates is hereinafter referred to as a Delivery Date.]
Payment for the Debt Securities that the undersigned has agreed to purchase
for delivery on [the] [each] Delivery Date shall be made to the Company or its
order by certified or official bank check in New York Clearing House (next day)
funds at the office of _______________________ at _____________ .M. on [the]
[such] Delivery Date upon delivery to the undersigned of the Debt Securities to
be purchased by the undersigned [for delivery on such Delivery Date] in
definitive fully registered form and in such denominations or numbers and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less than five full
business days prior to [the] [such] Delivery Date.
It is expressly agreed that the provisions for delayed delivery and payment
are for the sole convenience of the undersigned; that the purchase hereunder of
Debt Securities is to be regarded in all respects as a purchase as of the date
of this Contract; that the obligation of the Company to make delivery of and
accept payment for, and the obligation of the undersigned to take delivery of
and make payment for, Debt Securities on [the] [each] Delivery Date shall be
subject only to the conditions that (1) investment in the Debt Securities shall
not at [the] [such] Delivery Date be prohibited under the laws of any
jurisdiction in the United States to which the undersigned is subject and (2)
the Company shall have sold to the Underwriters the total principal amount of
the Debt Securities less the principal amount thereof covered by this and other
similar Contracts. The undersigned represents that its investment in the Debt
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which governs such
investment.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
This Contract will (a) inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other, and (b) shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of laws of such state.
20
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
------------------------------------
(Name of Purchaser)
By:
---------------------------------
---------------------------------
(Title of Signatory)
---------------------------------
---------------------------------
(Address of Purchaser)
Accepted, as of the above date.
UNITED PARCEL SERVICE OF AMERICA, INC.
By
-------------------------------
(Insert Title)
00
XXXXXX XXXXXX XXXXXXX XX XXXXXXX, INC.
("COMPANY")
DEBT SECURITIES
TERMS AGREEMENT
---------------
[Date]
------------
United Parcel Service of America, Inc.
00 Xxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx,
Senior Vice President and Chief Financial Officer
Dear Sirs:
On behalf of the several Underwriters named in Schedule A hereto and for
their respective accounts, we offer to purchase, on and subject to the terms and
conditions of the Underwriting Agreement relating to Debt Securities dated as of
_______________ ("Underwriting Agreement"), the following securities
("Securities") on the following terms:
DEBT SECURITIES
Title:
Principal Amount: $
Interest Rate: _________% from ________________________, ___________, payable:
Maturity:
Currency of Denomination:
Currency of Payment:
Form and Denomination:
Overseas Paying Agents:
Optional Redemption:
Sinking Fund:
Delayed Delivery Contracts: [authorized] [not authorized]
Delivery Date:
Minimum Contract
Maximum aggregate principal amount:
Fee: %
Purchase Price: _______%, plus accrued interest, or amortized original issue
discount, if any, from ________________
Expected Reoffering Price:
------------------------------------
2
Names and Addresses of Representatives:
The respective principal amounts of the Debt Securities to be purchased by
each of the Underwriters are set forth opposite their names in Schedule A
hereto.
The provisions of the Underwriting Agreement are incorporated herein by
reference.
The Closing will take place at ____ A.M., Eastern Standard time, on
_______________,____________ at the offices of ________________________________.
The Securities will be made available for checking and packaging at the
office of _____________________________________ at least 24 hours prior to the
Closing Date.
Please signify your acceptance by signing the enclosed response to us in
the space provided and returning it to us.
Very truly yours,
SCHEDULE A
DEBT SECURITIES
Underwriter Principal Amount
----------- ----------------
