EXHIBIT F TO THE
CREDIT AGREEMENT
FORM OF INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT
This INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT dated
as of May 7, 1997, among UNITED PARCEL SERVICE OF AMERICA, INC., a Delaware
corporation (the "Company"), and UNITED PARCEL SERVICE, INC., a New York
corporation, UNITED PARCEL SERVICE, INC., an Ohio corporation, and UNITED
PARCEL SERVICE CO., a Delaware corporation (each, a "Guarantor" and
collectively, the "Guarantors").
Pursuant to the Amended and Restated Credit Agreement (364-Day
Facility) dated as of May 7, 1997 (the "Credit Agreement"; terms defined
therein unless otherwise defined herein being used herein as therein
defined) among the Company, the Lenders parties thereto, Citicorp
Securities, Inc. and NationsBanc Capital Markets, Inc., as Co-Arrangers,
NationsBank, N.A. (South), as Documentation Agent, and Citibank, N.A., as
Administrative Agent (the "Administrative Agent") for the Lenders, the
Lenders have agreed to make certain Advances to the Company. Pursuant to
the Guaranty (364-Day Facility) dated as of May 7, 1997 (the "Guaranty")
made by the Guarantors in favor of the Administrative Agent on behalf of
the Lenders, the Guarantors have guaranteed the Guaranteed Obligations (as
defined in the Guaranty), including repayment of Advances and the other
obligations of the Company under the Credit Agreement.
The Company and the Guarantors desire to enter into the
indemnification, subrogation and contribution agreements set forth below
with respect to the Guaranty.
Accordingly, the Company and the Guarantors agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 3), the Company agrees that (a) in
the event a payment shall be made by any Guarantor under the Guaranty, the
Company shall indemnify such Guarantor for the full amount of such payment
and such Guarantor shall be subrogated to the rights of the person to whom
such payment shall have been made to the extent of such payment and (b) in
the event any assets of any Guarantor shall be sold pursuant to any
mortgage, security agreement or similar instrument or agreement to satisfy
a claim of any Lender or any Agent, the Company shall indemnify such
Guarantor in an amount equal to the greater of (i) the book value and (ii)
the fair market value of the assets so sold.
SECTION 2. Contribution. Each Guarantor agrees (subject to
Section 3) that in the event a payment shall be made by any Guarantor under
the Guaranty or assets of any Guarantor shall be sold pursuant to any
mortgage, security agreement or similar instrument or agreement to satisfy
a claim of any Lender or any Agent and such Guarantor (the "Claiming
Guarantor") shall not have been indemnified by the Company as provided in
Section 1, each other Guarantor (a "Contributing Guarantor") shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment or the greater of (i) the book value and (ii) the fair market value
of such assets, as the case may be, multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Guarantor on the date
hereof and the denominator shall be the aggregate of the net worth of all
the Guarantors on the date hereof. Any Contributing Guarantor making any
payment to a Claiming Guarantor pursuant to this Section 2 shall be
subrogated to the rights of such Claiming Guarantor under Section 1 to the
extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors under Sections
1 and 2 shall be fully subordinated to the final and indefeasible payment
and performance in full of the Guaranteed Obligations. In furtherance of
the foregoing, each Guarantor agrees that it will not exercise any rights
against the Borrower under, or receive any payments in respect of amounts
owing under, Sections 1 and 2 during the existence of an Event of Default.
SECTION 4. Modification and Termination. This Agreement may
be modified or terminated only by an instrument in writing executed by each
of the parties hereto, and then only with the prior written consent of the
Required Lenders; provided, however, that in the event the Guaranty of any
Guarantor is released or terminated for any reason, the obligations and
rights of such Guarantor hereunder shall forthwith terminate and such
Guarantor shall cease to be a Guarantor for all purposes of this Agreement.
SECTION 5. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 6. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the day
and year first above written.
UNITED PARCEL SERVICE OF
AMERICA, INC.
By
Name:
Title:
UNITED PARCEL SERVICE, INC., a
New York corporation
By
Name:
Title:
UNITED PARCEL SERVICE, INC.,
an Ohio corporation
By
_________________________________
Name:
Title:
UNITED PARCEL SERVICE CO., a
Delaware corporation
By
Name:
Title:
