EXHIBIT 1.1
UNITED PARCEL SERVICE, INC.
$600,000,000
UPS NOTES
WITH MATURITIES OF 9 MONTHS OR MORE FROM DATE OF ISSUE
SELLING AGENT AGREEMENT
December 20, 2001
ABN AMRO Financial Services, Inc. Morgan Stanley & Co. Incorporated
327 Plaza Real, Suite 225 1585 Broadway
Boca Raton, FL 33432 New York, New York 10036
Charles Schwab & Co., Inc. Salomon Smith Barney Inc.
101 Montgomery Street 388 Greenwich Street
San Francisco, CA 94104 New York, New York 10013
Edward D. Jones & Co., L.P. UBS PaineWebber Inc.
12555 Manchester 800 Harbor Blvd.
Des Peres, MO 63131 Weehawken, New Jersey 07087
Merrill Lynch, Pierce, Fenner & Smith Loop Capital Markets
Incorporated 175 W. Jackson, Suite A 635
4 World Financial Center Chicago, Illinois 60604
New York, New York 10080
Dear Sirs:
United Parcel Service, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell up to $600,000,000 aggregate principal amount of its
UPS Notes (the "NOTES") with maturities of 9 months or more from date of issue
pursuant to the provisions of the Indenture, dated as of January 26, 1999, as
supplemented by the First Supplemental Indenture thereto, dated as of March 27,
2000, the Second Supplemental Indenture thereto, dated as of September 21, 2001
and as further supplemented from time to time (the "INDENTURE"), between the
Company and Citibank, N.A., as Trustee (the "Trustee"). The Notes shall have the
maturity ranges, interest rates and other terms set forth in the Prospectus
referred to below as it may be amended or supplemented from time to time. The
Notes will be issued, and the terms thereof established, from time to time by
the Company in accordance with the Indenture.
Subject to the terms and conditions contained in this Selling Agent
Agreement (the "AGREEMENT") and to the reservation by the Company of the right
to sell up to $50,000,000 aggregate principal amount of Notes directly on its
own behalf or indirectly through other agents in up to ten separate
transactions, the Company hereby (1) appoints each of you as an agent of
the Company (individually, an "AGENT" and collectively the "AGENTS") for the
purpose of soliciting and receiving offers to purchase Notes from the Company
and you hereby agree to use your reasonable best efforts to solicit and receive
offers to purchase Notes upon terms acceptable to the Company at such times and
in such amounts as the Company shall from time to time specify and in accordance
with the terms hereof, and, after consultation with ABN AMRO Financial Services,
Inc. (the "PURCHASING AGENT"), the Company reserves the right to enter into
agreements substantially identical hereto with other agents and (2) agrees that
whenever the Company determines to sell Notes pursuant to this Agreement, such
Notes shall be sold pursuant to a Terms Agreement (as defined in Section IV(b)
below) relating to such sale in accordance with the provisions of Section IV(b)
hereof between the Company and the Purchasing Agent with the Purchasing Agent
purchasing such Notes as principal for resale to others. This Agreement shall
not be construed to create either an obligation on the part of the Company to
sell any Notes or an obligation of any of the Agents to purchase Notes.
I.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-08369) relating to
the Notes and the offering thereof, from time to time, in accordance with Rule
415 under the Securities Act of 1933, as amended (the "SECURITIES ACT"). Such
registration statement, including all documents incorporated therein by
reference, as from time to time amended or supplemented, is referred to herein
as the "REGISTRATION STATEMENT". The Registration Statement has been declared
effective by the Commission, and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"). The Company
has prepared or will promptly prepare for filing with, or transmission for
filing to, the Commission, pursuant to Rule 424 under the Securities Act, a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") and a prospectus (the "BASE
PROSPECTUS") for the purpose of supplying information in respect of the public
offering of the Notes. The Prospectus Supplement, together with the Base
Prospectus, including all documents incorporated therein by reference, as from
time to time amended or supplemented, and including any supplement to the
Prospectus that sets forth only the terms of a particular issue of the Notes (a
"PRICING SUPPLEMENT"), are referred to herein as the "PROSPECTUS".
II.
Your obligations hereunder are subject to the following conditions,
each of which shall be met on such date as you and the Company shall
subsequently fix for the commencement of your obligations hereunder (the
"COMMENCEMENT DATE"):
(a) (i) No litigation or proceeding shall be threatened or pending to
restrain or enjoin the issuance or delivery of the Notes, or which in any way
questions or affects the validity of the Notes and (ii) no stop order suspending
the effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by the
Commission and there shall have been no material adverse change in the
consolidated financial condition of the Company and its subsidiaries, considered
as a whole (a "MATERIAL ADVERSE CHANGE"), from that set forth in the
Registration Statement and the Prospectus; and you shall have received on the
Commencement Date a certificate of the Company dated such Commencement Date and
signed by an executive officer of the Company to the foregoing effect.
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The officer making such certificate may rely upon the best of his knowledge as
to proceedings threatened.
(b) You shall have received a favorable opinion of King &
Spalding, counsel for the Company, dated the Commencement Date, to the effect
that:
(i) the Company is a corporation validly existing and in
good standing under the laws of the State of Delaware and has the
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a legal, 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
creditors' rights generally, general equitable principles and the
discretion of courts in granting equitable remedies; and the Indenture
has been duly qualified under the Trust Indenture Act;
(iii) the Notes have been duly authorized and, when the
terms thereof have been established in accordance with the Indenture
and when executed, authenticated, issued and delivered in the manner
provided for in the Indenture against payment therefor, will constitute
legal, 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 creditors' rights generally,
general equitable principles and the discretion of courts in granting
equitable remedies;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) no authorization, consent or approval of, or
registration or filing with, any governmental or public body or
regulatory authority is required on the part of the Company for the
issuance of the Notes in accordance with the Indenture or the sale of
the Notes in accordance with this Agreement other than the registration
of the Notes under the Securities Act, qualification of the Indenture
under the Trust Indenture Act and compliance with the securities or
Blue Sky laws of various jurisdictions;
(vi) the statements in the Prospectus under the captions
"Description of Debt Securities", "Description of Notes" and "Certain
United States Federal Income Tax Considerations" insofar as such
statements constitute summaries of the documents (or provisions
thereof) or statutes (or provisions thereof) referred to therein,
fairly present the information required to be described with respect to
such documents (or provisions thereof) or statutes (or provisions
thereof) and fairly summarize in all material respects such documents
(or provisions thereof) or statutes (or provisions thereof);
(vii) the Indenture and the form of the Notes filed by the
Company with the Commission as an exhibit to the Company's Current
Report on Form 8-K on
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December 20, 2001 conform in all material respects to the descriptions
thereof in the Prospectus;
(viii) the Registration Statement has become effective under
the Securities Act, and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted or
are pending under the Securities Act; and
(ix) (1) each document, if any, filed pursuant to the
Securities Exchange Act of 1934, as amended, (the "EXCHANGE ACT") and
incorporated by reference in the Prospectus, when such document was
filed with the Commission, complied as to form in all material respects
with the Exchange Act and the rules and regulations thereunder; and (2)
the Registration Statement, as of its effective date, and the
Prospectus, as of its issue date and the Commencement Date, complied as
to form in all material respects with the requirements of the Trust
Indenture Act and the Securities Act and the rules and regulations
thereunder (in each case other than the financial statements and notes
thereto, the financial statement schedules and the other financial and
statistical data and Form T-1 included or incorporated by reference
therein).
In addition, King & Spalding shall state that, although such
counsel does 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,
nothing came to their attention that causes them to believe that (A)
the Registration Statement (other than the financial statements and
notes thereto, the financial statement schedules and the other
financial and statistical data and the Form T-1 included or
incorporated by reference therein), as of its effective date, contained
an untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or (B) the Prospectus (other than the financial
statements and notes thereto, the financial statement schedules and the
other financial and statistical data included or incorporated by
reference therein), as amended or supplemented, as of its issue date
and as of the Commencement Date, contained or contains any untrue
statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) You shall have received a favorable opinion of counsel in the
Legal Department of the Company, reasonably satisfactory to the Agents, dated
the Commencement Date, to the effect that:
(i) the Company is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which it
owns or leases 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 and its
subsidiaries considered as a whole;
(ii) the execution and delivery of the Indenture, the
issuance of the Notes in accordance with the Indenture and the sale of
the Notes pursuant to this Agreement (a) do
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not and will not result in any violation of the certificate of
incorporation or bylaws of the Company, (b) to such counsel's
knowledge, do not and will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
agreement or other instrument binding upon the Company or any
subsidiary of the Company that is a "significant subsidiary" as defined
in Rule 1-02(w) of Regulation S-X under the Securities Act (each, a
"SIGNIFICANT SUBSIDIARY") that is material to the Company and its
subsidiaries considered as a whole, and (c) do not and will not result
in a violation of any existing material law, rule or regulation
applicable to the Company or any of its subsidiaries or any material
judgment, order, writ, injunction or decree known to such counsel of
any governmental authority or court having jurisdiction over the
Company or any of its subsidiaries;
(iii) the Company has full power and authority to
authorize, issue and sell the Notes as contemplated by this Agreement;
(iv) the statements in the (a) documents incorporated by
reference into the Prospectus under the captions "Government
Regulations" and "Legal Proceedings" in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000 and Part II, Item 1 of
the Company's Quarterly Reports on Form 10-Q for each of the quarters
ended March 31, 2001, June 30, 2001 and September 30, 2001, and (b) the
Registration Statement under Item 15, insofar as such statements
constitute summaries of the documents (or provisions thereof), statutes
(or provisions thereof) or legal proceedings referred to therein,
fairly present the information required to be described with respect to
such documents (or provisions thereof), statutes (or provisions
thereof) or legal proceedings and fairly summarize in all material
respects such documents (or provisions thereof), statutes (or
provisions thereof), or legal proceedings; and
(v) to such counsel's knowledge, there are no (a) legal
or governmental proceedings pending or threatened to which the Company
or any Significant Subsidiary is a party, or to which any of the
properties of the Company or any Significant Subsidiary is subject,
that are required to be described in the Registration Statement or the
Prospectus and are not so described or (b) statutes, regulations or
contracts that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(d) You shall have received on the Commencement Date a letter
dated the Commencement Date from Deloitte & Touche LLP, independent auditors,
containing statements and information of the type ordinarily included in
auditors' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Registration Statement and the Prospectus relating to the
Notes.
(e) You shall have received a favorable opinion of Gibson, Dunn &
Crutcher LLP, counsel for the Agents, dated such Commencement Date, to the
effect set forth in Section II(b) in clauses (ii), (iii), (iv),(vii) and (ix)(2)
and subsection (B) of the paragraph following clause (ix).
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(f) You shall have received a certificate of the secretary or
assistant secretary of the Company as to (i) the Certificate of Incorporation of
the Company, (ii) the Bylaws of the Company and (iii) the resolutions
authorizing the issuance and sale of the Notes and certain related matters.
The obligations of the Purchasing Agent to purchase Notes as principal,
both under this Agreement and under any Terms Agreement, are subject to the
conditions that (i) no litigation or proceeding shall be threatened or pending
to restrain or enjoin the issuance or delivery of the Notes, or which in any way
questions or affects the validity of the Notes, (ii) no stop order suspending
the effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or threatened by the
Commission and (iii) there shall have been no material adverse change in the
consolidated financial condition of the Company and its subsidiaries, considered
as a whole, from that set forth in the Registration Statement and the
Prospectus, each of which conditions shall be met on the corresponding
Settlement Date (as defined in Section IV(b) hereof). Further, if specifically
called for by any written agreement by the Purchasing Agent to purchase Notes as
principal, the Purchasing Agent's obligations hereunder and under such agreement
shall be subject to such of the additional conditions set forth in clause (a),
as it relates to the executive officer's certificate, and clauses (b), (c), (d)
and (e) above, as agreed to by the parties, each of which such agreed conditions
shall be met on the corresponding Settlement Date.
III.
In further consideration of your agreements herein contained, the
Company covenants as follows:
(a) To furnish to you, without charge, a copy of (i) the
Indenture, (ii) the resolutions of the Board of Directors (or Executive
Committee) of the Company authorizing the issuance and sale of the Notes,
certified by the Secretary or Assistant Secretary of the Company as having been
duly adopted, (iii) the Registration Statement including exhibits and documents
incorporated by reference therein; provided, however, that the Company shall
only be required to provide the Company's periodic filings to be filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act to
the Purchasing Agent, on behalf of the Agents, on the date on which such filings
are to be transmitted for filing with the Commission; and (iv) as many copies of
the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus (other than amendments or supplements to change interest rates
and other than amendments or supplements in the form of the Company's periodic
filings to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act that are incorporated by reference in the Prospectus),
to furnish you a copy of each such proposed amendment or supplement, and to
afford you a reasonable opportunity to comment on any such proposed amendment or
supplement.
(c) To furnish you copies of each amendment to the Registration
Statement and of each amendment and supplement to the Prospectus in such
quantities as you may from time to time
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reasonably request; and if at any time when the delivery of a Prospectus shall
be required by law in connection with sales of any of the Notes, either (i) any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact, or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading or (ii)
for any other reason it shall be necessary to amend or supplement the latest
Prospectus, as then amended or supplemented, or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act, the Company will (A) notify you to
suspend the solicitation of offers to purchase Notes and if notified by the
Company, you shall forthwith suspend such solicitation and cease using the
Prospectus as then amended or supplemented and (B), if the Company notifies you
that it would like you to resume the solicitation of offers to purchase,
promptly prepare and file with the Commission such document incorporated by
reference in the Prospectus or an amendment or supplement to the Registration
Statement or the Prospectus which will correct such statement or omission or
effect such compliance and will provide to you without charge a reasonable
number of copies thereof, which you shall use thereafter.
(d) To endeavor to qualify such Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to pay all reasonable expenses (including fees and disbursements of
counsel) in connection with such qualification and in connection with the
determination of the eligibility of such Notes for investment under the laws of
such jurisdictions as you may designate; provided, that, in connection therewith
the Company shall not be required to qualify as a foreign corporation to do
business, or to file a general consent to service of process, in any
jurisdiction.
(e) The Company will make generally available to its security
holders and to you as soon as practicable earning statements that satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder covering twelve month periods beginning, in each
case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in Rule 158 under the Securities Act)
of the Registration Statement with respect to each sale of Notes.
(f) (i) If the Company and the Purchasing Agent mutually
agree to list Notes on any stock exchange (a "STOCK EXCHANGE"), to use its
reasonable efforts, in cooperation with the Purchasing Agent, to cause such
Notes to be accepted for listing on any such Stock Exchange, in each case as the
Company and the Purchasing Agent shall deem to be appropriate. In connection
with any such agreement to list Notes on a Stock Exchange, the Company shall use
its reasonable efforts to obtain such listing promptly and shall furnish any and
all documents, instruments, information and undertakings that may be reasonably
necessary or advisable in order to obtain and maintain the listing.
(ii) So long as any Note remains outstanding and listed on
a Stock Exchange, if the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact relating to any matter described in the Prospectus the inclusion of which
was required by the listing rules and regulations of such Stock Exchange on
which any Notes are listed (the "LISTING RULES") or by such Stock Exchange, to
provide to the Purchasing Agent information about the change or matter and to
amend or supplement the
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Prospectus in order to comply with the Listing Rules or as otherwise requested
by the Stock Exchange.
(iii) To use reasonable efforts to comply with any
undertakings given by it from time to time to any Stock Exchange on which any
Notes are listed.
(g) To notify the Purchasing Agent promptly in writing in the
event that the Company does not have a security listed on the New York Stock
Exchange.
(h) The Company will notify the Agents immediately, and confirm
such notice in writing, of any change in the rating assigned by any nationally
recognized statistical rating organization, as such term is defined in Rule
436(g)(2) under the Securities Act, to the Medium-Term Note Program under which
the Notes are issued (the "PROGRAM") or any debt securities (including the
Notes) of the Company, or the public announcement by any nationally recognized
statistical rating organization that it has under surveillance or review, with
possible negative implications, its rating of the Program or any such debt
securities, or the withdrawal by any nationally recognized statistical rating
organization of its rating of the Program or any such debt securities.
IV.
(a) Solicitations as Agent. You hereby agree, as Agents hereunder,
to use your reasonable best efforts to solicit and receive offers to purchase
Notes upon the terms and conditions set forth herein and in the Prospectus and
upon the terms communicated to you from time to time by the Company. For the
purpose of such solicitation you will use the Prospectus as then amended or
supplemented which has been most recently distributed to you by the Company, and
you will solicit offers to purchase only as permitted or contemplated thereby
and herein and will solicit offers to purchase Notes only as permitted by the
Securities Act and the applicable securities laws or regulations of any
jurisdiction. The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase Notes commencing at any time for any period
of time or permanently. Upon receipt of instructions (which may be given orally)
from the Company, you will as soon as practicable, but in any event no later
than one business day after receipt of such instructions, suspend solicitation
of offers to purchase until such time as the Company has advised you that such
solicitation may be resumed. In addition, the Company reserves the right to
sell, and may solicit and accept offers to purchase, up to $50,000,000 aggregate
principal amount of Notes directly on its own behalf in up to ten separate
transactions; and, in the case of any such sale not resulting from a
solicitation made by any Agent, no Concession (as defined below) will be payable
with respect to such sale.
You are authorized to solicit orders for the Notes only in
denominations of $1,000 or more (in multiples of $1,000). You are not authorized
to appoint subagents or to engage the service of any other broker or dealer in
connection with the offer or sale of the Notes without the consent of the
Company; provided, however, the Purchasing Agent may engage the service of any
other broker or dealer without the consent of the Company. The Purchasing Agent
will, however, on a periodic basis, provide the Company with a listing of those
brokers or dealers so engaged. In addition, unless otherwise instructed by the
Company, the Purchasing Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes. The Company
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shall have the sole right to accept offers to purchase Notes offered through you
and may reject any proposed purchase of Notes as a whole or in part. You shall
have the right, in your discretion reasonably exercised, to reject any proposed
purchase of Notes, as a whole or in part, and any such rejection shall not be
deemed a breach of your agreements contained herein.
The Company agrees to pay the Purchasing Agent, as consideration for
soliciting the sale of the Notes, a concession in the form of a discount equal
to the percentages of the principal amount of each Note sold not in excess of
the concession set forth in Exhibit A hereto (the "CONCESSION"). Notwithstanding
the foregoing, for Zero-Coupon Notes (as defined below), the Company agrees to
pay the Purchasing Agent, as consideration for soliciting the sale of the
Zero-Coupon Notes, a Concession in the form of a discount equal to the
percentages of the initial offering price of each Zero-Coupon Note sold not in
excess of the Concession set forth in Exhibit A hereto. The Purchasing Agent and
the other Agents will share the Concession in such proportions as they may
agree.
Except as provided in Section IV(b) hereof, in soliciting offers to
purchase Notes from the Company, you are acting solely as agent for the Company
and not as principal. If acting on behalf of the Company on an agency basis, you
will make reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes has been accepted by the Company,
but you shall not have any liability to the Company in the event such purchase
is not consummated for any reason, other than to repay to the Company any
Concession with respect thereto.
(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms of this Agreement and a
separate agreement, substantially in the form of Exhibit C hereto, to be entered
into on behalf of such Agent(s) by the Purchasing Agent, which will provide for
the sale of such Notes to, and the purchase and reoffering thereof by, the
Purchasing Agent as principal. Each such separate agreement (which may be an
oral agreement and confirmed in writing as described below between the
Purchasing Agent and the Company) is herein referred to as a "TERMS AGREEMENT".
A Terms Agreement may also specify certain provisions relating to the reoffering
of such Notes by the Purchasing Agent. The Purchasing Agent's agreement to
purchase Notes pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations, warranties and agreements of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Except pursuant to a Terms Agreement, under no circumstances shall you be
obligated to purchase any Notes for your own account. Each Terms Agreement,
whether oral (and confirmed in writing which may be by facsimile transmission)
or in writing, shall describe the Notes to be purchased pursuant thereto by the
Purchasing Agent as principal, and may specify, among other things, the
principal amount of Notes to be purchased, the interest rate or formula and
maturity date or dates of such Notes, the interest payment dates, if any, the
price to be paid to the Company for such Notes, the initial public offering
price at which the Notes are proposed to be reoffered, and the time and place of
delivery of and payment for such Notes (the "SETTLEMENT DATE"), whether the
Notes provide for a survivor's option or for optional redemption by the Company
and on what terms and conditions, and any other relevant terms. Terms Agreements
may take the form of an exchange of any standard form of written
telecommunication between the Purchasing Agent and the Company.
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In connection with the resale of the Notes purchased, without the
consent of the Company, you are not authorized to appoint subagents or to engage
the service of any other broker or dealer, nor may you reallow any portion of
the discount paid to you by the Company in excess of the designated reallowance
portion; provided, however, that the Purchasing Agent may engage the service of
any other broker or dealer without the consent of the Company. The Purchasing
Agent will however, on a periodic basis, provide the Company with a listing of
those brokers or dealers so engaged. Unless authorized by the Purchasing Agent
in each instance, each Agent agrees not to purchase and sell Notes for which an
order from a client has not been received.
Each purchase of Notes by the Purchasing Agent from the Company shall
be at a discount from the principal amount of each such Note on the date of
issue not in excess of the applicable Concession set forth in Exhibit A hereto.
Notwithstanding the foregoing, for Zero-Coupon Notes (as defined below), each
purchase of Zero-Coupon Notes by the Purchasing Agent from the Company shall be
at a discount from the initial offering price of each such Note on the date of
issue not in excess of the applicable Concession set forth in Exhibit A hereto.
(c) Public Offering Price. Unless otherwise authorized by the
Company, all Notes shall be sold to the public at a purchase price not to exceed
100% of the principal amount thereof, plus accrued interest, if any, with the
exception of Notes that bear a zero interest rate and are issued at a
substantial discount from the principal amount payable at the Maturity Date (a
"ZERO-COUPON NOTE"). Zero-Coupon Notes shall be sold to the public at a purchase
price no greater than an amount, expressed as a percentage of the principal face
amount of such Notes, equal to (i) the net proceeds to the Company on the sale
of such Notes, plus (ii) the Concession, plus (iii) accrued interest, if any.
Such purchase price shall be set forth in the confirmation statement of the
Selling Group (as defined in Exhibit B) member responsible for such sale, and
delivered to the purchaser along with a copy of the Prospectus (if not
previously delivered) and Pricing Supplement.
(d) Procedures. Procedural details relating to the issue and
delivery of, and the solicitation of offers to purchase and payment for, the
Notes, whether under Section IV(a) or IV(b) of this Agreement, are set forth in
the Administrative Procedures attached hereto as Exhibit B, as amended from time
to time (the "PROCEDURES"). The provisions of the Procedures shall apply to all
transactions contemplated hereunder. You and the Company each agree to perform
the respective duties and obligations specifically provided to be performed by
each in the Procedures. The Procedures may only be amended by written agreement
of the Company and each of you.
(e) Prospectus Delivery. You shall, as required by applicable law,
furnish to each person to whom you sell or deliver Notes a copy of the
Prospectus (as then amended or supplemented) or, if delivery of the Prospectus
is not required by applicable law, inform each such person that a copy thereof
(as then amended or supplemented) will be made available upon request. You are
not authorized to give any information or to make any representation not
contained in the Prospectus or the documents incorporated by reference or
specifically referred to therein in connection with the offer and sale of the
Notes. You will not use any marketing materials other than the Prospectus in
connection with any offer or sale of the Notes except for marketing materials
prepared by the Company, if any, and furnished to you together with written
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authorization from the Company to the Purchasing Agent to use the same
hereunder. If you elect to distribute these additional marketing materials under
the so called "free writing" exemption embodied in Section 2(10)(a) of the
Securities Act (any such marketing materials, "FREE WRITING MATERIALS"), you
will use your best efforts to ensure that any intended recipients of such Free
Writing Materials receive a Prospectus either prior to or concurrently with
their receipt of the Free Writing Materials.
(f) Compliance With Laws. The Purchasing Agent is aware that other
than registering the Notes under the Securities Act, no action has been or will
be taken by the Company that would permit the offer or sale of the Notes or
possession or distribution of the Prospectus or any other offering material
relating to the Notes in any jurisdiction where action for that purpose is
required. Accordingly, the Purchasing Agent agrees that it will observe all
applicable laws and regulations in each jurisdiction in or from which it may
directly or indirectly acquire, offer, sell or deliver Notes or have in its
possession or distribute the Prospectus or any other offering material relating
to the Notes, and the Purchasing Agent will obtain any consent, approval or
permission required for the purchase, offer or sale by it of Notes under the
laws and regulations in force in any such jurisdiction to which it is subject or
in which it makes such purchase, offer or sale.
V.
The Company represents and warrants to the Agents that as of the date
hereof, as of each date on which the Company accepts an offer to purchase Notes
(including any purchase by the Purchasing Agent as principal, pursuant to a
Terms Agreement or otherwise), as of each date the Company issues and sells
Notes and as of each date the Registration Statement or the Prospectus is
amended or supplemented:
(a) (i) each document, if any, filed, or to be filed, pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied when
so filed, or will comply, in all material respects with such Act and the rules
and regulations thereunder; (ii) the Registration Statement (including the
documents incorporated by reference therein), filed with the Commission pursuant
to the Securities Act relating to the Notes, when it became effective, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (iii) each Prospectus, if any, filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with such Act
and the applicable rules and regulations thereunder; (iv) the Registration
Statement and each Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act and the
applicable rules and regulations thereunder; and (v) the Registration Statement
and each Prospectus relating to the Notes do not and, as amended or
supplemented, if applicable, will 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;
(b) 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, and has been duly qualified
as a foreign corporation for the transaction of business and is in good
11
standing under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the failure to be so
qualified in any such jurisdiction;
(c) the Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(d) the Notes have been duly authorized and, when the terms
thereof have been established in accordance with the Indenture and when
executed, authenticated, issued and delivered in the manner provided for in the
Indenture against payment therefor, will constitute legal, 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 creditors' rights
generally, general equitable principles and the discretion of courts in granting
equitable remedies; the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a legal, 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 creditors' rights
generally, general equitable principles and the discretion of courts in granting
equitable remedies; and the Indenture has been duly qualified under the Trust
Indenture Act; and the Indenture conforms and the Notes of any particular
issuance of Notes will conform in all material respects to the descriptions
thereof contained in the Prospectus as amended or supplemented that relate to
such issuance of Notes;
(e) other than as set forth in the Prospectus, the Company and
each of its subsidiaries have conducted their businesses and are in compliance
in all material respects with all applicable federal and state laws and
regulations, except for any noncompliance which would not have a material
adverse effect on the Company and its subsidiaries considered as a whole;
(f) the issue and sale of the Notes, the compliance by the Company
with all of the provisions of the Notes, the Indenture, this Agreement and any
Terms Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, (i) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, or (ii) any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties, except for such
conflicts, breaches, violations or defaults under subsections (i) or (ii)
immediately above that would not result in a material adverse effect on the
Company and its subsidiaries considered as a whole, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or Bylaws
of the Company; and no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the solicitation of offers to purchase Notes, the issue and sale of the
Notes or the consummation by the Company of the other transactions contemplated
by this Agreement, any Terms Agreement or the Indenture, except such as have
been, or will have been prior to the Commencement Date, obtained under the
Securities Act or the Trust Indenture Act and such consents, approvals,
12
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the solicitation by you of offers
to purchase Notes from the Company and with purchases of Notes by you as
principal, as the case may be, in each case in the manner contemplated hereby;
(g) other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending or, to the Company's knowledge, threatened
to which the Company or any of its subsidiaries is a party or to which any
property of the Company or any of its subsidiaries is subject, which are of a
character that are required to be disclosed in the Prospectus which have not
been properly disclosed therein;
(h) immediately after any sale of Notes by the Company hereunder
or under any Terms Agreement, the aggregate amount of Notes which shall have
been issued and sold by the Company hereunder or under any Terms Agreement and
of any debt securities of the Company (other than such Notes) that shall have
been issued and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement;
(i) the Company is not, and, after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as described
in the Prospectus, the Company will not be, required to register as an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended; and
(j) the Program, as well as the Notes, are rated Aaa by Moody's
Investors Service, Inc. and AAA by Standard & Poor's Ratings Services, or, after
the Commencement Date, such other rating as to which the Company shall have most
recently notified the Agents pursuant to Section III(h) hereof.
The above representations and warranties shall not apply to any
statements or omissions made in the Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by you expressly
for use therein. Each acceptance by the Company of an offer for the purchase of
Notes and each issuance of Notes shall be deemed an affirmation by the Company
that the foregoing representations and warranties are true and correct at the
time, as the case may be, of such acceptance or of such issuance, in each case
as though expressly made at such time. The representations, warranties and
covenants of the Company shall survive the execution and delivery of this
Agreement and the issuance and sale of the Notes.
Unless the Company has suspended the solicitation of offers to purchase
Notes pursuant to paragraph (a) of Article IV, each time the Registration
Statement shall be amended by the filing of a post-effective amendment with the
Commission, or the filing by the Company of a Form 10-K or Form 10-Q pursuant to
Section 13 of the Exchange Act, or, if so agreed in connection with a particular
transaction, the Company shall furnish the Agents with (1) a written opinion,
dated the date of such amendment, filing or as otherwise agreed, of counsel to
the Company, in substantially the form previously delivered under Sections II(b)
and II(c), but modified, as necessary, to relate to the Registration Statement
and the Prospectus as amended or supplemented at such date; (2) a letter, dated
the date of such amendment, filing or as otherwise agreed, of Deloitte & Touche
LLP, independent auditors, in substantially the form previously
13
delivered under Section II(d), but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended or supplemented at such
date; and (3) a certificate, dated the date of such amendment, filing or as
otherwise agreed and signed by an executive officer of the Company, in
substantially the form previously delivered under Section II(a), but modified,
as necessary, to relate to the Registration Statement and the Prospectus as
amended or supplemented at such date.
VI.
(a) The Company agrees to indemnify and hold harmless you, each
person, if any, who controls (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) you and each of your and such
person's officers and directors against any and all losses, liabilities, costs
or claims (or actions in respect thereof) to which any of them may become
subject (including all reasonable legal and other costs of investigating,
disputing or defending any such claim or action), insofar as such losses,
liabilities, costs or claims (or actions in respect thereof) arise out of or in
connection with any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any Prospectus, or any amendment
or supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading provided, however: (i) that the Company shall not be
liable for any such loss, liability, cost, action or claim arising from any
statements or omissions made in reliance on and in conformity with written
information provided by you to the Company expressly for use in the Registration
Statement or Prospectus or any amendment or supplement thereto; and (ii) that
the Company shall not be liable to you or any person controlling you with
respect to the Prospectus to the extent any such loss, liability, cost, action
or claim to you or such controlling person results from the fact that you sold
Notes to a person to whom there was not sent or given, at or prior to the
earlier of either the mailing or delivery of the written confirmation of such
sale or the delivery of such Notes to such person, a copy of the Prospectus as
then amended or supplemented, if the Company has previously furnished copies
thereof to you.
(b) Each Agent severally agrees to indemnify and hold harmless the
Company, each person, if any, who controls (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act), the Company, and
the Company's and such person's officers and directors from and against any and
all losses, liabilities, costs or claims (or actions in respect thereof) to
which any of them may become subject (including all reasonable legal and other
costs of investigating, disputing or defending any such claim or action),
insofar as such losses, liabilities, costs or claims (or actions in respect
thereof) (i) arise out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
Prospectus, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, in each case only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance on and in conformity with written information furnished to the
Company by such Agent expressly for use therein or (ii) arise solely from the
use by such Agent of Free Writing Materials that are not preceded by or
accompanied with a copy of the Prospectus.
14
(c) If any claim, demand, action or proceeding (including any
governmental investigation) shall be brought or alleged against an indemnified
party in respect of which indemnity is to be sought against an indemnifying
party pursuant to the preceding paragraphs, the indemnified party shall,
promptly after receipt of notice of the commencement of any such claim, demand,
action or proceeding, notify the indemnifying party in writing of the
commencement of such claim, demand, action or proceeding, enclosing a copy of
all papers served, if any; provided, that, the omission to so notify such
indemnifying party will not relieve the indemnifying party from any liability
that it may have to any indemnified party under the foregoing provisions of this
Section VI unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. In case
any such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Article VI for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the reasonable fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the indemnifying party has assumed the defense
of such proceeding and has failed within a reasonable time to retain counsel
reasonably satisfactory to such indemnified party or (iii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential conflicts
of interests between them. It is agreed that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate law firm (in addition to local counsel where reasonably necessary) for
all such indemnified parties. Such firm shall be designated in writing by the
indemnified party. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section VI is
unavailable to or insufficient to hold harmless an indemnified party under the
preceding paragraphs of this Section VI in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the
15
Company on the one hand and each Agent on the other from the offering of the
Notes to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and each Agent on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and each Agent on the other shall be deemed to be
in the same proportion as the total net proceeds from the sale of Notes (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading relates to information supplied by the Company
on the one hand or by any Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that it would not be
just and equitable if contribution pursuant to this subsection (d) of Section VI
were determined by per capita allocation (even if all Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d) of Section VI. 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) of Section VI 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) of Section VI, no Agent
shall be required to contribute any amount in excess of the amount by which the
total public offering price at which the Notes purchased by it in the offering
giving rise to the damages were sold exceeds the amount of any damages which
such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of each of the
Agents under this subsection (d) of Section VI to contribute are several in
proportion to the respective purchases made by or through it to which such loss,
claim, damage or liability (or action in respect thereof) relates and are not
joint.
(e) The indemnity and contribution agreements contained in this
Section VI and the representations and warranties of the Company and you in this
Agreement shall remain operative and in full force and effect regardless of: (i)
any termination of this Agreement; (ii) any investigation made by or on behalf
of the Agents; (iii) any investigation by an indemnified party or on such
party's behalf or any person controlling an indemnified party or by or on behalf
of the indemnifying party, its directors or officers or any person controlling
the indemnifying party; and (iv) acceptance of and payment for any of the Notes.
16
VII.
This Agreement may be terminated at any time by either party hereto
upon the giving of five business days written notice of such termination to the
other party hereto. In the event of any such termination, neither party shall
have any liability to the other party hereto, except for obligations hereunder
which expressly survive the termination of this Agreement and except that, if at
the time of termination an offer for the purchase of Notes shall have been
accepted by the Company but the time of delivery to the purchaser or his agent
of the Note or Notes relating thereto shall not yet have occurred, the Company
shall have the obligations provided herein with respect to such Note or Notes.
Subsequent to the execution of a Terms Agreement, (i) the Purchasing
Agent may terminate such Terms Agreement, and (ii), if the Purchasing Agent does
not elect to terminate such Terms Agreement pursuant to clause (i) of this
sentence, upon the request of an Agent with respect to Notes to be purchased
through the Purchasing Agent by such Agent, the Purchasing Agent shall terminate
such Terms Agreement to the extent of the Notes that were to be purchased
through the Purchasing Agent by such requesting Agent, in each case immediately
upon notice to the Company, at any time prior to the Settlement Date relating
thereto, if there shall have occurred any:
(A) change in the long-term debt of the Company or any
change, or any development involving a prospective change, in the
financial condition or in the earnings, business or operations of the
Company, otherwise than as set forth or contemplated in the Prospectus,
the effect of which is, in the judgment of the Purchasing Agent or such
requesting Agent, so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering of such Notes or
enforce contracts for the sale of such Notes; or
(B) downgrading in the rating of the Company's debt
securities (including the Notes) by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Securities Act), 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; or
(C) banking moratorium declared by Federal or New York
authorities, or the authorities of any country in whose currency any
Notes are denominated under the applicable Terms Agreement; or
(D) outbreak or escalation of hostilities in which the
United States or any country in whose currency any Notes are
denominated under the applicable Terms Agreement is involved, any
declaration of war by Congress, any material adverse change in
financial markets or any other substantial national or international
calamity or emergency if, in the judgment of the Purchasing Agent or
such requesting Agent, the effect of any such outbreak, escalation,
material adverse change, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with the public offering of such
Notes or enforce contracts for the sale of such Notes; or
17
(E) action by any governmental authority or any change,
or any development involving a prospective change, involving currency
exchange rates or exchange controls, which makes it impracticable or
inadvisable in the judgment of the Purchasing Agent or such requesting
Agent to proceed with the public offering of such Notes or enforce
contracts for the sale of such Notes.
If this Agreement is terminated, the last sentence of the second
paragraph of Section IV(a), Section III(c), (d) and (e), Section VI, and the
first paragraph of Section XII shall survive; provided, that, if at the time of
termination of this Agreement an offer to purchase Notes has been accepted by
the Company but the time of delivery to the purchaser or its agent of such Notes
has not occurred, the provisions of Section III(a) and (b), and Section IV(b)
and (d) shall also survive until time of delivery.
VIII.
Except as otherwise specifically provided herein, all statements,
requests, notices and advices hereunder shall be in writing, or by telephone if
promptly confirmed in writing, and if to you shall be sufficient in all respects
if delivered in person or sent by telex, facsimile transmission (confirmed in
writing), or registered mail to you at your address, telex or telecopier number
set forth below by your signature and if to the Company shall be sufficient in
all respects if delivered or sent by telex, telecopier or registered mail to the
Company at 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328, Attention: Legal
Department, telecopier number (404) 828-6912. All such notices shall be
effective on receipt.
IX.
This Agreement shall be binding upon you and the Company, and inure
solely to the benefit of you and the Company and any other person expressly
entitled to indemnification hereunder and the respective personal
representatives, successors and assigns of each, and no other person shall
acquire or have any rights under or by virtue of this Agreement.
X.
This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of New York. Each party to this Agreement
irrevocably agrees that any legal action or proceeding against it arising out of
or in connection with this Agreement or for recognition or enforcement of any
judgment rendered against it in connection with this Agreement may be brought in
any Federal or New York State court sitting in the Borough of Manhattan, and, by
execution and delivery of this Agreement, such party hereby irrevocably accepts
and submits to the jurisdiction of each of the aforesaid courts in personam,
generally and unconditionally with respect to any such action or proceeding for
itself and in respect of its property, assets and revenues. Each party hereby
also irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of venue of any such action or
proceeding brought in any such court and any claim that any such action or
proceeding has been brought in an inconvenient forum.
18
XI.
If this Agreement is executed by or on behalf of any party, such person
hereby states that at the time of the execution of this Agreement he has no
notice of revocation of the power of attorney by which he has executed this
Agreement as such attorney.
XII.
The Company will pay the expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and filing of
the Registration Statement; (ii) the preparation, issuance and delivery of the
Notes; (iii) the fees and disbursements of the Company's counsel and auditors,
of the Trustee and its counsel and of any paying or other agents appointed by
the Company; (iv) the printing and delivery to you in quantities as hereinabove
stated of copies of the Registration Statement and the Prospectus; (v) the
reasonable fees and disbursements of Gibson, Dunn & Crutcher LLP, counsel for
the Agents (including "Blue Sky" fees and disbursements, if any); (vi) if the
Company lists Notes on a securities exchange, the costs and fees of such
listing; and (vii) any fees charged by rating agencies for the rating of the
Notes.
This Agreement may be executed by each of the parties hereto in any
number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
As used herein, "business day" means any day other than a Saturday,
Sunday or any day on which banking institutions are authorized or required by
law, regulation or executive order to be closed in the City of New York.
19
If the foregoing is in accordance with your understanding, please sign
and return to us a counterpart hereof, and upon acceptance hereof by you, this
letter and such acceptance hereof shall constitute a binding agreement between
the Company and you.
Very truly yours,
UNITED PARCEL SERVICE, INC.
By:
--------------------------------------------
Name:
Title:
Confirmed and accepted
as of the date first above written:
ABN AMRO FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Name:
Title:
ABN AMRO Incorporated
327 Plaza Real, Suite 225
Boca Raton, FL 33432
Attention:
--------------------
Telefax:
----------------------
CHARLES SCHWAB & CO., INC.
By:
-----------------------------------------
Name:
Title:
Charles Schwab & Co., Inc.
101 Montgomery Street
San Francisco, CA 94104
Attention:
--------------------
Telefax:
----------------------
20
EDWARD D. JONES & CO., L.P.
By:
-----------------------------------------
Name:
Title:
Edward D. Jones & Co., L.P.
12555 Manchester
Des Peres, Missouri 63131
Attention:
--------------------
Telefax:
----------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------------
Name:
Title:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
New York, New York 10080
Attention:
--------------------
Telefax:
----------------------
MORGAN STANLEY & CO. INCORPORATED
By:
-----------------------------------------
Name:
Title:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036 Attention: Manager,
Attention: Credit Department
Telefax: 212-761-0780
21
SALOMON SMITH BARNEY INC.
By:
-----------------------------------------
Name:
Title:
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Attention:
--------------------
Telefax:
----------------------
UBS PAINEWEBBER INC.
By:
-----------------------------------------
Name:
Title:
UBS PaineWebber Inc.
Attention: Taxable Fixed Income Department -- Corporate Desk
800 Harbor Blvd.
Weehawken, New Jersey 07087
Telephone: (201) 352-7150
Telecopier: (201) 352-6900
LOOP CAPITAL MARKETS
By:
-----------------------------------------
Name:
Title:
Loop Capital Markets
175 W. Jackson, Suite A 635
Chicago, IL 60604
Attention:
--------------------
Telefax:
----------------------
22
EXHIBIT A
UPS Notes
UNITED PARCEL SERVICE, INC.
DEALER AGENT PROGRAM
The following Concessions are payable as a percentage of the Price to Public of
each note sold to or through the Purchasing Agent and will not exceed the
amounts listed below.
9 months to less than 23 months......................... 0.600%
23 months to less than 35 months........................ 0.850%
35 months to less than 47 months........................ 1.375%
47 months to less than 59 months........................ 1.625%
59 months to less than 71 months........................ 2.000%
71 months to less than 83 months........................ 2.250%
83 months to less than 95 months........................ 2.250%
95 months to less than 107 months....................... 2.375%
107 months to less than 119 months...................... 2.375%
119 months to less than 131 months...................... 2.500%
131 months to less than 143 months...................... 2.750%
143 months to less than 179 months...................... 3.250%
179 months to less than 239 months...................... 3.500%
239 months to 360 months................................ 5.000%
A-1
EXHIBIT B
UNITED PARCEL SERVICE, INC.
$600,000,000
UPS Notes
WITH MATURITIES OF 9 MONTHS OR MORE FROM DATE OF ISSUE
ADMINISTRATIVE PROCEDURES
UPS Notes with maturities of 9 months or more from date of issue (the "NOTES")
are offered on a continuing basis by United Parcel Service, Inc. The Notes will
be offered by ABN AMRO Financial Services, Inc. (the "PURCHASING AGENT"),
Charles Schwab & Co., Inc., Edward D. Jones & Co., L.P., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Salomon Smith
Barney Inc., UBS PaineWebber Inc. and Loop Capital Markets (collectively, the
"AGENTS") pursuant to a Selling Agent Agreement among the Company and the Agents
dated as of the date hereof (the "SELLING AGENT AGREEMENT") and one or more
terms agreements substantially in the form attached to the Selling Agent
Agreement as Exhibit C (each a "TERMS AGREEMENT"). The Notes are being resold by
the Purchasing Agent (and by any Agent that purchases them from the Purchasing
Agent) to (i) customers of the Agents or (ii) selected broker-dealers (the
"SELLING GROUP") for distribution to their customers pursuant to a Master
Selected Dealers Agreement (a "DEALERS AGREEMENT") attached hereto as Exhibit E.
The Agents have agreed to use their reasonable best efforts to solicit offers to
purchase Notes. The Notes will be senior debt and have been registered with the
Securities and Exchange Commission (the "COMMISSION"). Citibank, N.A. is trustee
(the "TRUSTEE") under an Indenture, dated as of January 26, 1999, as
supplemented by the First Supplemental Indenture thereto, dated as of March 27,
2000, the Second Supplemental Indenture thereto, dated as of September 21, 2001
and as further amended or supplemented from time to time, between the Company
and the Trustee (the "INDENTURE") covering the Notes. Pursuant to the terms of
the Indenture, Citibank, N.A. also will serve as authenticating agent, issuing
agent and paying agent.
Each tranche of Notes will be issued in book-entry form and represented by one
or more fully registered global notes without coupons (each, a "GLOBAL NOTE")
held by the Trustee, as agent for the Depository Trust Corporation ("DTC") and
recorded in the book-entry system maintained by DTC. Each Global Note will have
the annual interest rate, maturity and other terms set forth in the relevant
Pricing Supplement (as defined in the Selling Agent Agreement). Owners of
beneficial interests in a Global Note will be entitled to physical delivery of
Notes issued in certificated form equal in principal amount to their respective
beneficial interests only upon certain limited circumstances described in the
Indenture.
Administrative procedures and specific terms of the offering are explained
below. Administrative responsibilities will be handled for the Company by its
Treasury Department; accountable document control and record-keeping
responsibilities will be performed by its Legal Department. The Company will
advise the Agents and the Trustee in writing of those persons handling
administrative responsibilities with whom the Agents and the Trustee are to
communicate regarding offers to purchase Notes and the details of their
delivery.
B-1
Notes will be issued in accordance with the administrative procedures set forth
herein. To the extent the procedures set forth below conflict with or omit
certain of the provisions of the Notes, the Indenture, the Selling Agent
Agreement or the Prospectus and the Pricing Supplement (together, the
"PROSPECTUS"), the relevant provisions of the Notes, the Indenture, the Selling
Agent Agreement and the Prospectus shall control. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in the
Selling Agent Agreement, the Prospectus in the form most recently filed with the
Commission pursuant to Rule 424 of the Securities Act, or the Indenture.
ADMINISTRATIVE PROCEDURES FOR NOTES
In connection with the qualification of Notes for eligibility in the book-entry
system maintained by DTC, the Trustee will perform the custodial, document
control and administrative functions described below, in accordance with its
obligations under a Letter of Representations from the Company and the Trustee
to DTC, dated January 18, 2001, and a Medium-Term Note Certificate Agreement
between the Trustee and DTC (the "CERTIFICATE AGREEMENT"), dated October 31,
1988, and its obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement System ("SDFS"). The procedures set forth below may be modified
in compliance with DTC's then applicable procedures and upon agreement by the
Company, the Trustee and the Purchasing Agent.
Maturities: Each Note will mature on a date (the "MATURITY DATE")
not less than nine months after the date of delivery
by the Company of such Note. Notes will mature on any
date selected by the initial purchaser and agreed to
by the Company. "MATURITY" when used with respect to
any Note means the date on which the outstanding
principal amount of such Note becomes due and payable
in full in accordance with its terms, whether at its
Maturity Date or by declaration of acceleration, call
for redemption, repayment or otherwise.
Issuance: All Notes having the same terms will be represented
initially by a single Global Note. Each Global Note
will be dated and issued as of the date of its
authentication by the Trustee.
All Discount Notes which have the same terms
(collectively, the "ZERO-COUPON TERMS") will be
represented initially by a single Global Certificate
in fully registered form without coupons.
Each Global Note will bear an original issue date
(the "ORIGINAL ISSUE DATE"). The Original Issue Date
shall remain the same for all Notes subsequently
issued upon registration of transfer, exchange or
substitution of an original Note regardless of their
dates of authentication.
B-2
Identification
Numbers: The Company has received from the CUSIP Service
Bureau (the "CUSIP SERVICE BUREAU") of Standard &
Poor's Corporation ("STANDARD & POOR'S") one series
of CUSIP numbers consisting of approximately 900
CUSIP numbers for future assignment to Global Notes.
The Company will provide DTC and the Trustee with a
list of such CUSIP numbers. The Company will assign
CUSIP numbers as described below under Settlement
Procedure "B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the
Company has assigned to Global Notes. The Company
will reserve additional CUSIP numbers when necessary
for assignment to Global Notes and will provide the
Trustee and DTC with the list of additional CUSIP
numbers so obtained.
Registration: Unless otherwise specified by DTC, Global Notes will
be issued only in fully registered form without
coupons. Each Global Note will be registered in the
name of Cede & Co., as nominee for DTC, on the Note
Register maintained under the Indenture by the
Trustee. The beneficial owner of a Note (or one or
more indirect participants in DTC designated by such
owner) will designate one or more participants in DTC
(with respect to such Note, the "PARTICIPANTS") to
act as agent or agents for such owner in connection
with the book-entry system maintained by DTC, and DTC
will record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect to such beneficial owner of such
Note in the account of such Participants. The
ownership interest of such beneficial owner in such
Note will be recorded through the records of such
Participants or through the separate records of such
Participants and one or more indirect participants in
DTC.
Transfers: Transfers of interests in a Global Note will be
accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one or
more indirect participants in DTC) acting on behalf
of beneficial transferors and transferees of such
interests.
Exchanges: The Trustee, at the Company's request, may deliver
to DTC and the CUSIP Service Bureau at any time a
written notice of consolidation specifying (a) the
CUSIP numbers of two or more Global Notes outstanding
on such date that represent Notes having the same
terms (except that Issue Dates need not be the same)
and for which interest, if any, has been paid to the
same date and which otherwise constitute Notes of the
same series and tenor under the Indenture, (b) a
date, occurring at least 30 days after such written
notice is delivered and at least 30 days before the
next Interest Payment Date, if any, for the related
Notes, on which such Global Notes shall be exchanged
for a single replacement Global Note; and (c) a new
CUSIP number, obtained from the Company, to be
assigned to such replacement Global Note. Upon
receipt of such a
B-3
notice, DTC will send to its participants (including
the Issuing Agent) and the Trustee a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau written notice setting forth
such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP
numbers of the Global Notes to be exchanged will no
longer be valid. On the specified exchange date, the
Trustee will exchange such Global Notes for a single
Global Note bearing, the new CUSIP number and the
CUSIP numbers of the exchanged Global Notes will, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned.
Notwithstanding the foregoing, if the Global Notes to
be exchanged exceed $400,000,000 in aggregate
principal or face amount, one replacement Global Note
will be authenticated and issued to represent each
$400,000,000 of principal or face amount of the
exchanged Global Notes and an additional Global Note
will be authenticated and issued to represent any
remaining principal amount of such Global Notes (See
"Denominations" below).
Denominations: Notes will be issued in denominations of $1,000 or
more (in multiples of $1,000). Global Notes will be
denominated in principal or face amounts not in
excess of $400,000,000. If one or more Notes having
an aggregate principal or face amount in excess of
$400,000,000 would, but for the preceding sentence,
be represented by a single Global Note, then one
Global Note will be issued to represent each
$400,000,000 principal or face amount of such Note or
Notes and an additional Global Note will be issued to
represent any remaining principal amount of such Note
or Notes. In such case, each of the Global Notes
representing such Note or Notes shall be assigned the
same CUSIP number.
Issue Price: Unless otherwise specified in an applicable Pricing
Supplement, each Note will be issued at the
percentage of principal amount specified in the
Prospectus relating to such Note.
Interest: Each Note will bear interest at a fixed rate, which
may be zero during all or any part of the term in the
case of certain Notes issued at a price representing
a substantial discount from the principal amount
payable at Maturity. Interest on each Note will
accrue from the Issue Date of such Note for the first
interest period and from the most recent Interest
Payment Date to which interest has been paid for all
subsequent interest periods. Except as set forth
hereafter, each payment of interest on a Note will
include interest accrued to but excluding, as the
case may be, the Interest Payment Date or the date of
Maturity (other than a Maturity Date of a Note
occurring on the 31st day of a month in which case
such payment of interest will include interest
accrued to but excluding the 30th day of such month).
Any payment of principal, premium or interest
required to be made on a day that is not a Business
Day (as defined
B-4
below) may be made on the next succeeding Business
Day and no interest shall accrue as a result of any
such delayed payment.
Each pending deposit message described under
Settlement Procedure "C" below will be routed to
Standard & Poor's, which will use the message to
include certain information regarding the related
Notes in the appropriate daily bond report published
by Standard & Poor's.
Each Note will bear interest from and including its
Issue Date at the rate per annum set forth thereon
and in the applicable Pricing Supplement until the
principal amount thereof is paid, or made available
for payment, in full. Unless otherwise specified in
the applicable Pricing Supplement, interest on each
Note (other than a Zero-Coupon Note) will be payable
either monthly, quarterly, semi-annually or annually
on each Interest Payment Date and at Maturity (or on
the date of redemption or repayment if a Note is
repurchased by the Company prior to maturity pursuant
to mandatory or optional redemption provisions or the
Survivor's Option). Interest will be payable to the
person in whose name a Note is registered at the
close of business on the Regular Record Date next
preceding each Interest Payment Date; provided,
however, that interest payable at Maturity, on a date
of redemption or in connection with the exercise of
the Survivor's Option will be payable to the person
to whom principal shall be payable.
Any payment of principal, and premium, if any, or
interest required to be made on a Note on a day which
is not a Business Day need not be made on such day,
but may be made on the next succeeding Business Day
with the same force and effect as if made on such
day, and no additional interest shall accrue as a
result of such delayed payment. Unless otherwise
specified in the applicable Pricing Supplement, any
interest on the Notes will be computed on the basis
of a 360-day year of twelve 30-day months. The
interest rates the Company will agree to pay on
newly-issued Notes are subject to change without
notice by the Company from time to time, but no such
change will affect any Notes already issued or as to
which an offer to purchase has been accepted by the
Company.
The Interest Payment Dates for a Note that provides
for monthly interest payments shall be the fifteenth
day of each calendar month (or the next Business Day
if not a Business Day), commencing in the calendar
month that next succeeds the month in which the Note
is issued. In the case of a Note that provides for
quarterly interest payments, the Interest Payment
Dates shall be the fifteenth day of each third month
(or the next Business Day if not a Business Day),
commencing in the third succeeding calendar month
following the month in which the Note is issued. In
the case of a Note that provides for semi-annual
interest payments, the Interest Payment dates shall
be the fifteenth day of each sixth month (or the next
Business Day if not a Business Day), commencing in
the sixth
B-5
succeeding calendar month following the month in
which the Note is issued. In the case of a Note that
provides for annual interest payments, the Interest
Payment Date shall be the fifteenth day of every
twelfth month (or the next Business Day if not a
Business Day), commencing in the twelfth succeeding
calendar month following the month in which the Note
is issued. The Regular Record Date with respect to
any Interest Payment Date shall be the date fifteen
calendar days prior to such Interest Payment Date,
whether or not such date shall be a Business Day;
provided, however, that interest payable at Maturity
will be payable to the person to whom principal shall
be payable.
Each payment of interest on a Note shall include
accrued interest from and including the Issue Date or
from and including the last day in respect of which
interest has been paid (or duly provided for), as the
case may be, to, but excluding, the Interest Payment
Date or Maturity Date, as the case may be.
Calculation
of Interest: Unless otherwise specified in the applicable Pricing
Supplement, interest on the Notes (including interest
for partial periods) will be calculated on the basis
of a 360-day year of twelve 30-day months. (Examples
of interest calculations are as follows: October 1,
2000 to April 1, 2001 equals 6 months and 0 days, or
180 days; the interest paid equals 180/360 times the
annual rate of interest times the principal amount of
the Note. The period from December 3, 2000 to April
1, 2001 equals 3 months and 28 days, or 118 days; the
interest payable equals 118/360 times the annual rate
of interest times the principal amount of the Note.)
Business Day: "Business Day" means, unless otherwise specified in
the applicable Pricing Supplement, any day, other
than a Saturday or Sunday, that meets the following
applicable requirement: such day is not a day on
which banking institutions are authorized or required
by law, regulation or executive order to be closed in
the City of New York.
Payments of
Principal and
Interest: Payments of Principal and Interest. Promptly after
each Regular Record Date, the Trustee will deliver to
the Company and DTC a written notice specifying by
CUSIP number the amount of interest, if any, to be
paid on each Global Note on the following Interest
Payment Date (other than an Interest Payment Date
coinciding with a Maturity Date) and the total of
such amounts. DTC will confirm the amount payable on
each Global Note on such Interest Payment Date by
reference to the daily bond reports published by
Standard & Poor's. On such Interest Payment Date, the
Company will pay to the Trustee, and the Trustee in
turn will pay to DTC, such total amount of interest
due (other than on the Maturity Date), at the times
and in the manner set forth below under "Manner of
B-6
Payment". If any Interest Payment Date for any Note
is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day and
no interest shall accrue on such payment for the
period from and after such Interest Payment Date.
Payments on the Maturity Date. On or about the first
Business Day of each month, the Trustee will deliver
to the Company and DTC a written list of principal,
premium, if any, and interest to be paid on each
Global Note representing Notes maturing or subject to
redemption (pursuant to a sinking fund or otherwise)
or repayment ("MATURITY") in the following month. The
Trustee, the Company and DTC will confirm the amounts
of such principal, premium, if any, and interest
payments with respect to each Global Note on or about
the fifth Business Day preceding the Maturity Date of
such Global Note. On the Maturity Date, the Company
will pay to the Trustee, and the Trustee in turn will
pay to DTC, the principal amount of such Global Note,
together with interest and premium, if any, due on
such Maturity Date, at the times and in the manner
set forth below under "Manner of Payment". If the
Maturity Date of any Global Note is not a Business
Day, the payment due on such day shall be made on the
next succeeding Business Day and no interest shall
accrue on such payment for the period from and after
such Maturity Date. Promptly after payment to DTC of
the principal and interest due on the Maturity Date
of such Global Note and all other Notes represented
by such Global Note, the Trustee will cancel and
destroy such Global Note in accordance with the
Indenture and so advise the Company.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Global Notes on
any Interest Payment Date or at Maturity shall be
paid by the Company to the Trustee in immediately
available funds on such date. The Company will make
such payment on such Global Notes by instructing the
Trustee to withdraw funds from an account maintained
by the Company with Citibank, N.A., by wire transfer
to Citibank, N.A. or as otherwise agreed with the
Trustee. The Company will confirm such instructions
in writing to the Trustee. Prior to 10:00 a.m., New
York City time, on the Maturity Date or as soon as
possible thereafter, the Trustee will make payment to
DTC in accordance with existing arrangements between
DTC and the Trustee, in funds available for immediate
use by DTC, each payment of interest, principal and
premium, if any, due on a Global Note on such date.
On each Interest Payment Date (other than on the
Maturity Date) the Trustee will pay DTC such interest
payments in same-day funds in accordance with
existing arrangements between the Trustee and DTC.
Thereafter, on each such date, DTC will pay, in
accordance with its SDFS operating procedures then in
effect, such amounts in funds available for immediate
use to the respective Participants with payments in
amounts proportionate to their respective holdings in
principal amount of beneficial interest in such
Global Note as are recorded in the book-entry system
maintained by
B-7
DTC. Neither the Company nor the Trustee shall have
any direct responsibility or liability for the
payment by DTC of the principal of, or premium, if
any, or interest on, the Notes to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Note will be determined and withheld by
the Participant, indirect participant in DTC or other
person responsible for forwarding payments and
materials directly to the beneficial owner of such
Note.
Procedure for Rate
Setting and
Posting: The Company and the Agents will discuss, from time to
time, the aggregate principal amounts of, the
Maturities, the Issue Price and the interest rates to
be borne by Notes that may be sold as a result of the
solicitation of orders by the Agents. If the Company
decides to set interest rates borne by any Notes in
respect of which the Agents are to solicit orders
(the setting of such interest rates to be referred to
herein as "POSTING"), or if the Company decides to
change interest rates previously posted by it, it
will promptly advise the Agents of the prices and
interest rates to be posted.
The Company will assign a separate CUSIP number for
each tranche of Notes to be posted, and will so
advise and notify the Trustee and Purchasing Agent of
said assignment by telephone and/or by telecopier or
other form of electronic transmission. The Purchasing
Agent will, in turn, include the assigned CUSIP
number on all Posting notices communicated to the
Agents and Selling Group members.
Offering of Notes: In the event that there is a Posting, the Purchasing
Agent will communicate to each of the Agents and
Selling Group members the aggregate principal amount
and Maturities of, along with the interest rates to
be borne by, each tranche of Notes that is the
subject of the Posting. Thereafter, the Purchasing
Agent, along with the other Agents and the Selling
Group, will solicit offers to purchase the Notes
accordingly.
Purchase of Notes
by the Purchasing
Agent: The Purchasing Agent will, no later than 4:00 p.m.
(New York City time) on the sixth day subsequent to
the day on which such Posting occurs, or if such
sixth day is not a Business Day, on the preceding
Business Day, or on such other Business Day and time
as shall be mutually agreed upon by the Company and
the Agents (any such day, a "TRADE Day"), (i)
complete, execute and deliver to the Company a Terms
Agreement that sets forth, among other things, the
amount of each tranche that the Purchasing Agent is
offering to purchase or (ii) inform the Company that
B-8
none of the Notes of a particular tranche will be
purchased by the Purchasing Agent.
Acceptance and
Rejection of
Orders: Unless otherwise agreed by the Company and the
Agents, the Company has the sole right to accept
orders to purchase Notes and may reject any such
order in whole or in part. Unless otherwise
instructed by the Company, the Purchasing Agent will
promptly advise the Company by telephone of all
offers to purchase Notes received by it, other than
those rejected by it in whole or in part in the
reasonable exercise of its discretion. No order for
less than $1,000 principal amount of Notes will be
accepted.
Upon receipt of a completed and executed Terms
Agreement from the Purchasing Agent, the Company will
(i) promptly execute and return such Terms Agreement
to the Purchasing Agent or (ii) inform the Purchasing
Agent that its offer to purchase the Notes of a
particular tranche has been rejected, in whole or in
part. The Purchasing Agent will thereafter promptly
inform the other Agents and participating Selling
Group members of the action taken by the Company.
Preparation of
Pricing
Supplement: If any offer to purchase a Note is accepted by or on
behalf of the Company, the Company will provide a
Pricing Supplement (substantially in the form
attached to the Selling Agent Agreement as Exhibit D)
reflecting the terms of such Note and will have filed
such Pricing Supplement with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Act and will supply a copy thereof
(or additional copies if requested) to the Purchasing
Agent, by no later than 11:00 a.m. on the Business
Day immediately following the Trade Day, and one copy
to the Trustee. The Purchasing Agent will cause a
Prospectus and Pricing Supplement to be delivered to
each of the other Agents and Selling Group members
that purchased such Notes, and each of these, in
turn, will, pursuant to the terms of the Selling
Agent Agreement and the Master Selected Dealer
Agreement, cause to be delivered a copy of the
applicable Pricing Supplement to each purchaser of
Notes from such Agent or Selling Group member.
In each instance that a Pricing Supplement is
prepared, the Agents will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements and the Prospectuses to
which they are attached (other than those retained
for files) will be destroyed.
B-9
Delivery of
Confirmation
and Prospectus to
Purchaser by
Purchasing Agent: Subject to "Suspension of Solicitation; Amendment or
Supplement" below, the Agents will deliver a
Prospectus (including the Pricing Supplement) as
herein described with respect to each Note sold by
it.
For each offer to purchase a Note solicited by an
Agent and accepted by or on behalf of the Company,
the Purchasing Agent will issue a confirmation to the
purchaser, with a copy to the Company, setting forth
the terms of such Note and other applicable details
described above and delivery and payment
instructions. In addition, the Purchasing Agent will
deliver to such purchaser the Prospectus (including
the Pricing Supplement) in relation to such Note
prior to or together with the earlier of any written
offer of such Note, delivery of the confirmation of
sale or delivery of the Note.
Settlement: The receipt of immediately available funds by the
Company in payment for Notes and the authentication
and issuance of the Global Note representing such
Notes shall constitute "SETTLEMENT" with respect to
such Note. All orders accepted by the Company will be
settled within one to three Business Days pursuant to
the timetable for Settlement set forth below, unless
the Company and the purchaser agree to Settlement on
a later date, and shall be specified upon acceptance
of such offer; provided, however, that in all cases
the Company will notify the Trustee on the date
issuance instructions are given.
Settlement
Procedures: In the event of a purchase of Notes by any Agent, as
principal, appropriate Settlement details, if
different from those set forth below, will be set
forth in the applicable Terms Agreement to be entered
into between such Agent and the Company pursuant to
the Selling Agent Agreement. Settlement Procedures
with regard to each Note sold by an Agent, as agent
for the Company, shall be as follows:
A. After the acceptance of an offer by the
Company with respect to a Note, the
Purchasing Agent will communicate the
following details of the terms of such offer
(the "NOTE SALE INFORMATION") to the Company
by telephone confirmed in writing or by
facsimile transmission or other acceptable
written means:
1. Principal amount of the purchase;
2. Interest Rate;
B-10
3. Interest Payment Dates;
4. Settlement Date;
5. Maturity Date;
6. Purchase Price;
7. Purchasing Agent's commission
determined pursuant to Section
IV(a) of the Selling Agent
Agreement;
8. Net proceeds to the Company;
9. Trade Date;
10. If a Note is redeemable by the
Company, such of the following as
are applicable:
(i) The date on and after
which such Note may be
redeemed (the "REDEMPTION
COMMENCEMENT DATE"),
(ii) Initial redemption price
(% of par), and
(iii) Amount (% of par) that the
initial redemption price
shall decline (but not
below par) on each
anniversary of the
Redemption Commencement
Date;
11. Whether the Note has the Survivor's
Option;
12. If a Discount Note, the total
amount of original issue discount,
the yield to maturity and the
initial accrual period of original
issue discount;
13. DTC Participant Number of the
institution through which the
customer will hold the beneficial
interest in the Global Note; and
14. Such other terms as are necessary
to complete the applicable form of
Note.
B. The Company will advise the Trustee by
telephone (confirmed in writing and signed
by an authorized person at any time on the
same date) or by facsimile transmission
signed by an authorized person of the
information set forth in Settlement
Procedure "A" above and the name of the
Purchasing Agent. The Trustee will assign a
CUSIP number to the Global Security
representing such
B-11
Note. The Trustee will notify the Company
and the Purchasing Agent of such CUSIP
number by telephone as soon as practicable.
C. The Trustee will communicate to DTC and the
Purchasing Agent through DTC's Participant
Terminal System, a pending deposit message
specifying the following Settlement
information:
1. The information received in
accordance with Settlement
Procedure "A".
2. The numbers of the participant
accounts maintained by DTC on
behalf of the Trustee and the
Purchasing Agent.
3. The initial Interest Payment Date
for such Note, number of days by
which such date succeeds the
related DTC record date (which term
means the Regular Record Date), and
if then calculated, the amount of
interest payable on such Initial
Interest Payment Date (which amount
shall have been confirmed by the
Trustee).
4. The CUSIP number of the Global Note
representing such Notes.
5. The frequency of interest.
6. Whether such Global Note represents
any other Notes issued or to be
issued (to the extent then known).
D. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
E. The Trustee will complete and deliver a
Global Note representing such Note in a form
that has been approved by the Company, the
Agents and the Trustee.
F. The Trustee will authenticate the Global
Note representing such Note and maintain
possession of such Global Note.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to
the Trustee's participant account and credit
such Note to the participant account of the
Agent maintained by DTC and (ii) debit the
settlement account of the Agent and credit
the settlement account of the Trustee
maintained by DTC, in an amount equal to the
price of such Note less the Purchasing
Agent's commission. The entry of such a
deliver order shall be deemed to constitute
a representation and warranty by the Trustee
B-12
to DTC that (a) the Global Note representing
such Note has been issued and authenticated
and (b) the Trustee is holding such Global
Note pursuant to the Certificate Agreement.
H. The Purchasing Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC to (i) debit
such Note to the Purchasing Agent's
participant account and credit such Note to
the participant accounts of the Participants
to whom such Note is to be credited
maintained by DTC and (ii) debit the
settlement accounts of such Participants and
credit the settlement account of the
Purchasing Agent maintained by DTC, in an
amount equal to the price of the Note so
credited to their accounts.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in
effect on the Settlement Date.
J. The Trustee will credit to an account of the
Company maintained at Citibank, N.A. funds
available for immediate use in an amount
equal to the amount credited to the
Trustee's DTC participant account in
accordance with Settlement Procedure "G".
K. The Trustee will send a copy of the Global
Note representing such Note by first-class
mail to the Company.
L. The Purchasing Agent will confirm the
purchase of each Note to the purchaser
thereof either by transmitting to the
Participant to whose account such Note has
been credited a confirmation order through
DTC's Participant Terminal System or by
mailing a written confirmation to such
purchaser. In all cases the Prospectus, as
most recently amended or supplemented, must
accompany or precede such confirmation.
M. Upon request by the Company, the Trustee
will send to the Company a statement setting
forth the principal amount of Notes
outstanding as of that date under the
Indenture and setting forth the CUSIP
number(s) assigned to, and a brief
description of, any orders which the Company
has advised the Trustee but which have not
yet been settled.
B-13
Settlement
Procedures
Timetable: In the event of a purchase of Notes by the Purchasing
Agent, as principal, appropriate Settlement details,
if different from those set forth below, will be set
forth in the applicable Terms Agreement to be entered
into between the Purchasing Agent and the Company
pursuant to the Selling Agent Agreement.
For orders of Notes solicited by an Agent, as agent,
and accepted by the Company, Settlement Procedures
"A" through "M" shall be completed as soon as
possible but not later than the respective times (New
York City time) set forth below:
Settlement: Procedure Time
--------- ----
A 4:00 p.m. on the Trade Day.
B 5:00 p.m. on the Trade Day.
C 2:00 p.m. on the Business Day before
the Settlement Date.
D 10:00 a.m. on the Settlement Date.
E 12:00 p.m. on the Settlement Date.
F 12:30 p.m. on the Settlement Date.
G-H 2:00 p.m. on the Settlement Date.
I 4:45 p.m. on the Settlement Date.
J-L 5:00 p.m. on the Settlement Date
M At the request of the Company.
NOTE: The Prospectus as most recently amended or
supplemented must accompany or precede any written
confirmation given to the customer (Settlement
Procedure "L"). Settlement Procedure "I" is subject
to extension in accordance with any extension Fedwire
closing deadlines and in the other events specified
in the SDFS operating procedures in effect on the
Settlement Date.
If Settlement of a Note is rescheduled or cancelled,
the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m., New York
City time, on the Business Day immediately preceding
the scheduled Settlement Date.
B-14
Failure to Settle: If the Trustee fails to enter an SDFS deliver order
with respect to a Note pursuant to Settlement
Procedure "G", the Trustee may deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to
debit such Note to the participant account of the
Trustee maintained at DTC. DTC will process the
withdrawal message; provided, that, such participant
account contains Notes having the same terms and
having a principal amount that is at least equal to
the principal amount of such Note to be debited. If
withdrawal messages are processed with respect to all
the Notes issued or to be issued represented by a
Global Note, the Trustee will cancel such Global Note
in accordance with the Indenture, make appropriate
entries in its records and so advise the Company. The
CUSIP number assigned to such Global Note shall, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned. If
withdrawal messages are processed with respect to one
or more, but not all, of the Notes represented by a
Global Note, the Trustee will exchange such Global
Note for two Global Notes, one of which shall
represent such Notes and shall be cancelled
immediately after issuance, and the other of which
shall represent the remaining Notes previously
represented by the surrendered Global Note and shall
bear the CUSIP number of the surrendered Global Note.
If the purchase price for any Note is not timely paid
to the Participants with respect to such Note by the
beneficial purchaser thereof (or a person, including
an indirect participant in DTC, acting on behalf of
such purchaser), such Participants and, in turn, the
related Agent may enter SDFS deliver orders through
DTC's participant Terminal System reversing the
orders entered pursuant to Settlement Procedures "G"
and "H", respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the related
actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than
default by the Agent in the performance of its
obligations hereunder or under the Selling Agent
Agreement, the Company will reimburse the Agent on an
equitable basis for its loss of the use of funds
during the period when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Note, DTC may take any
actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure
to settle with respect to one or more, but not all,
of Notes that were to have been represented by a
Global Note, the Trustee will provide, in accordance
with Settlement Procedures "D" and "E", for the
authentication and issuance of a Global Note
representing the other Notes to have been represented
by such Global Note and will make appropriate entries
in its records.
B-15
Procedure for
Rate Changes: Each time a decision has been reached to change
rates, the Company will promptly advise the Agents of
the new rates, who will forthwith suspend
solicitation of purchases of Notes at the prior
rates. The Agents may telephone the Company with
recommendations as to the changed interest rates.
Suspension of
Solicitation;
Amendment or
Supplement: Subject to the Company's representations, warranties
and covenants contained in the Selling Agent
Agreement, the Company may instruct the Agents to
suspend at any time for any period of time or
permanently, the solicitation of orders to purchase
Notes. Upon receipt of such instructions (which may
be given orally), each Agent will forthwith suspend
solicitation until such time as the Company has
advised it that solicitation of offers to purchase
may be resumed.
In the event that at the time the Company suspends
solicitation of offers to purchase there shall be any
orders outstanding for settlement, the Company will
promptly advise the Agents and the Trustee whether
such orders may be settled and whether copies of the
Prospectus as in effect at the time of the suspension
may be delivered in connection with the settlement of
such orders. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such orders may not be
settled or that copies of such Prospectus may not be
so delivered.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and furnish the Agents and
the Trustee with the proposed amendment or supplement
and with such certificates and opinions as are
required, all to the extent required by and in
accordance with the terms of the Selling Agent
Agreement. Subject to the provisions of the Selling
Agent Agreement, the Company may file with the
Commission any supplement to the Prospectus relating
to the Notes. The Company will provide the Agents and
the Trustee with copies of any such supplement, and
confirm to the Agents that such supplement has been
filed with the Commission.
Trustee Not to Risk
Funds: Nothing herein shall be deemed to require the Trustee
to risk or expend its own funds in connection with
any payment to the Company, or the Agents or the
purchasers, it being understood by all parties that
payments made by the Trustee to either the Company or
the Agents shall be made only to the extent that
funds are provided to the Trustee for such purpose.
Advertising Costs: The Company shall have the sole right to approve the
form and substance of any advertising an Agent may
initiate in connection with such Agent's solicitation
to purchase the Notes. The expense of such
advertising will be solely the responsibility of such
Agent, unless otherwise agreed to by the Company.
B-16
EXHIBIT C
UNITED PARCEL SERVICE, INC.
UPS Notes
TERMS AGREEMENT
__________ __, 200_
United Parcel Service, Inc.
55 Glenlake Parkway, N.E.
Atlanta, Georgia 30328
The undersigned agrees to purchase the following aggregate principal amount of
Notes:
$
------------------
The terms of such Notes shall be as follows:
CUSIP Number:
---------------------
Interest Rate: %
-----------
Maturity Date:
--------------------
Price to Public:
------------------
Agent's Concession: %
----------------
Settlement Date, Time
and Place:
--------------------------------------
Survivor's Option:
---------------------------------
Interest Payment Dates:
----------------------------
Optional Redemption, if any:
--------------------------
Initial Redemption Date:
--------------------
Redemption Price: Initially % of Principal Amount and declining ______%
of the Principal Amount on each anniversary of the Initial Redemption
Date until the Redemption Price is 100% of the Principal Amount.
[Any other terms and conditions agreed to by such Agent and the Company]
ABN AMRO FINANCIAL SERVICES, INC.
By:
-------------------------------------
Name:
Title:
ACCEPTED:
UNITED PARCEL SERVICE, INC.
By:
---------------------------------------
Name:
Title:
C-1
EXHIBIT D
FORM OF PRICING SUPPLEMENT
Registration No. 333-08369
Filed Pursuant to Rule 424(b)(2)
United Parcel Service, Inc.
UPS Notes
With Maturities of 9 Months or More from Date of Issue
Pricing Supplement No. __ Trade Date: __/__/__
(To Prospectus Supplement dated December 20, 2001) Issue Date: __/__/__
The date of this Pricing Supplement is _______ __, ____
CUSIP
or
Common Code Principal Amount Interest Rate Maturity Date Price to Public
----------- ---------------- ------------- ------------- ---------------
Interest Payment
Frequency Subject to Dates and terms of redemption
(begin date) Survivor's Option Redemption (including the redemption price)
---------------- ----------------- ---------- --------------------------------
Discounts and
Proceeds to UPS Commissions Reallowance Dealer
--------------- -------------- ----------- ------
D-1
EXHIBIT E
Form of Master Selected Dealer Agreement
[Name of Broker-Dealer]
[Broker-Dealer's Address]
Dear Selected Dealer:
In connection with public offerings of securities after the date hereof
for which we are acting as manager of an underwriting syndicate or are otherwise
responsible for the distribution of securities to the public by means of an
offering of securities for sale to selected dealers, you may be offered the
right as such a selected dealer to purchase as principal a portion of such
securities. This will confirm our mutual agreement as to the general terms and
conditions applicable to your participation in any such selected dealer group
organized by us as follows.
1. Applicability of this Agreement. The terms and
conditions of this Agreement shall be applicable to any public offering of
securities ("SECURITIES") pursuant to a registration statement filed under the
Securities Act of 1933 (the "SECURITIES ACT"), or exempt from registration
thereunder (other than a public offering of Securities effected wholly outside
the United States of America), wherein ABN AMRO Financial Services, Inc.
("AAFS") (acting for its own account or for the account of any underwriting or
similar group or syndicate) is responsible for managing or otherwise
implementing the sale of the Securities to selected broker-dealers ("SELECTED
DEALERS") and has expressly informed you that such terms and conditions shall be
applicable. Any such offering of Securities to you as a Selected Dealer is
hereinafter called an "OFFERING". In the case of any Offering where we are
acting for the account of any underwriting or similar group or syndicate
("UNDERWRITERS"), the terms and conditions of this Agreement shall be for the
benefit of, and binding upon, such Underwriters, including, in the case of any
Offering where we are acting with others as representatives of Underwriters,
such other representatives.
2. Conditions of Offering; Acceptance and Purchases. Any
Offering will be subject to delivery of the Securities and their acceptance by
us and any other Underwriters, may be subject to the approval of all legal
matters by counsel and the satisfaction of other conditions, and may be made on
the basis of reservation of Securities or an allotment against subscription. We
will advise you by telegram, telex or other form of written communication
("WRITTEN COMMUNICATION", which term, in the case of any Offering described in
Section 3(a) or 3(b) hereof, may include a prospectus or offering circular) of
the particular method and supplementary terms and conditions (including, without
limitation, the information as to prices and offering date referred to in
Section 3(c) hereof) of any Offering in which you are invited to participate. To
the extent such supplementary terms and conditions are inconsistent with any
provision herein, such terms and conditions shall supersede any such provision.
Unless otherwise indicated in any such Written Communication, acceptances and
other communications by you with respect to an Offering should be sent to ABN
AMRO Financial Services, Inc., 327 Plaza Real, Suite 225, Boca Raton, Florida
33432 (Telecopy: (561) 416-6180). We reserve the right to reject any acceptance
in whole or in part. Unless notified otherwise by us, Securities
E-1
purchased by you shall be paid for on such date as we shall determine, on one
business day's prior notice to you, by certified or official bank check, in an
amount equal to the Public Offering Prices (as hereinafter defined) or, if we
shall so advise you, at such Public Offering Price less the Concession (as
hereinafter defined), payable in immediately available funds to the order of ABN
AMRO Financial Services, Inc., against delivery of the Securities. If Securities
are purchased and paid for at such Public Offering Price, such Concession will
be paid after the termination of the provisions of Section 3(c) hereof with
respect to such Securities. Notwithstanding the foregoing, unless notified
otherwise by us, payment for and delivery of Securities purchased by you shall
be made through the facilities of The Depository Trust Company, if you are a
member, unless you have otherwise notified us prior to the date specified in a
Written Communication to you from us or, if you are not a member, settlement may
be made through a correspondent who is a member pursuant to instructions which
you will send to us prior to such specified date.
3. Representations, Warranties and Agreements.
(a) Registered Offerings. In the case of any Offering of
Securities that are registered under the Securities Act ("REGISTERED OFFERING"),
we shall provide you with such number of copies of each preliminary prospectus
and of the final prospectus relating thereto as you may reasonably request for
the purposes contemplated by the Securities Act and the Securities Exchange Act
of 1934 (the "EXCHANGE ACT") and the applicable rules and regulations of the
Securities and Exchange Commission (the "COMMISSION") thereunder. You represent
and warrant that you are familiar with Rule 15c2-8 under the Exchange Act
relating to the distribution of preliminary and final prospectuses and agree
that you will comply therewith. You agree to make a record of your distribution
of each preliminary prospectus and, when furnished with copies of any revised
preliminary prospectus, you will, upon our request, promptly forward copies
thereof to each person to whom you have theretofore distributed a preliminary
prospectus. You agree that in purchasing Securities in a Registered Offering you
will rely upon no statement whatsoever, written or oral, other than the
statements in the final prospectus delivered to you by us. You will not be
authorized by the issuer or other seller of Securities offered pursuant to a
prospectus or by any Underwriter to give any information or to make any
representation not contained in the prospectus in connection with the sale of
such Securities.
(b) Offerings Pursuant to Offering Circular. In the case
of any Offering of Securities, other than a Registered Offering, which is made
pursuant to an offering circular or other document comparable to a prospectus in
a Registered Offering, including, without limitation, an Offering of "exempted
securities" as defined in Section 3(a)(12) of the Exchange Act (an "EXEMPTED
SECURITIES OFFERING"), we shall provide you with such number of copies of each
preliminary offering circular and of the final offering circular relating
thereto as you may reasonably request. You agree that you will comply with the
applicable Federal and state laws, and the applicable rules and regulations of
any regulatory body promulgated thereunder, governing the use and distribution
of offering circulars by brokers or dealers. You agree that in purchasing
Securities pursuant to an offering circular you will rely upon no statements
whatsoever, written or oral, other than the statements in the final offering
circular delivered to you by us. You will not be authorized by the issuer or
other seller of Securities offered pursuant to an offering circular or by any
Underwriter to give any information or to make any representation not contained
in the offering circular in connection with the sale of such Securities.
E-2
(c) Offer and Sale to the Public. With respect to any
Offering of Securities, we will inform you by a Written Communication of the
public offering price, the selling concession, the reallowance (if any) to
broker-dealers and the time when you may commence selling Securities to the
public. After such public offering has commenced, we may change the public
offering price, the selling concession and the reallowance (if any) to
broker-dealers. The offering price, selling concession and reallowance (if any)
to broker-dealers at any time in effect with respect to an Offering are
hereinafter referred to, respectively, as the "PUBLIC OFFERING PRICE", the
"CONCESSION" and the "REALLOWANCE". With respect to each Offering of Securities,
until the provisions of this Section 3(c) shall be terminated pursuant to
Section 5 hereof, you agree to offer Securities to the public at no more than
the Public Offering Price. If notified by us, you may sell securities to the
public at a lesser negotiated price than the Public Offering Price, but in an
amount not to exceed the Concession. If a Reallowance is in effect, a
reallowance from the Public Offering Price not in excess of such Reallowance may
be allowed as consideration for services rendered in distribution to
broker-dealers (i) who are actually engaged in the investment banking or
securities business, (ii) who execute the written agreement prescribed by Rule
2740(c) of the Conduct Rules of the National Association of Securities Dealers.
Inc. (the "NASD") and (iii) who, if they are foreign banks, broker-dealers or
institutions not eligible for membership in the NASD, represent to you that they
will promptly reoffer such Securities at the Public Offering Price and will
abide by the conditions with respect to foreign banks, broker-dealers and
institutions set forth in Section 3(e) hereof.
(d) Over-allotment; Stabilization; Unsold Allotments. We
may, with respect to any Offering, be authorized to over-allot in arranging
sales to Selected Dealers, to purchase and sell Securities for long or short
account and to stabilize or maintain the market price of the Securities. You
agree not to purchase and sell Securities for which an order from a client has
not been received without our consent in each instance. You further agree that,
upon our request at any time and from time to time prior to the termination of
the provisions of Section 3(c) hereof with respect to any Offering, you will
report to us the amount of Securities purchased by you pursuant to such Offering
which then remain unsold by you and will, upon our request at any such time,
sell to us for our account or the account of one or more Underwriters such
amount of such unsold Securities as we may designate at the Public Offering
Price less an amount to be determined by us not in excess of the Concession. If,
prior to the later of (i) the termination of the provisions of Section 3(c)
hereof with respect to any Offering or (ii) the covering by us of any short
position created by us in connection with such Offering for our account or the
account of one or more Underwriters, we purchase or contract to purchase for our
account or the account of one or more Underwriters in the open market or
otherwise any Securities purchased by you under this Agreement as part of such
Offering, you agree to pay us on demand an amount equal to the Concession with
respect to such Securities (unless you shall have purchased such Securities
pursuant to Section 2 hereof at the Public Offering Price in which case we shall
not be obligated to pay such Concession to you pursuant to Section 2) plus
transfer taxes and broker's commissions or dealer's mark-up, if any, paid in
connection with such purchase or contract to purchase.
(e) NASD. You represent and warrant that you are actually
engaged in the investment banking or securities business. In addition, you
further represent and warrant that you are either (i) a member in good standing
of the NASD(ii) a foreign bank, broker-dealer or institution not eligible for
membership in the NASD which agrees not to make any sales within
E-3
the United States, its territories or its possessions or to persons who are
citizens thereof or residents therein, and in making any other sales to comply
with the NASD's interpretation with respect to free riding and withholding, or
(iii), solely in connection with an Exempted Securities Offering, a bank, as
defined in Section 3(a)(6) of the Exchange Act, that does not otherwise fall
within provision (i) or (ii) of this sentence (a "BANK"). You further represent,
by your participation in an Offering, that you have provided to us all documents
and other information required to be filed with respect to you, any related
person or any person associated with you or any such related person pursuant to
the supplementary requirements of the NASD's interpretation with respect to
review of corporate financing as such requirements relate to such Offering.
You agree that, in connection with any purchase or sale of the
Securities wherein a selling Concession, discount or other allowance is received
or granted, (1) you will comply with the provisions of Rule 2740 of the Conduct
Rules of the NASD, (2) if you are a non-NASD member broker or dealer in a
foreign country, you will also comply (a), as though you were an NASD member,
with the provision of Rules 2730, 2740 and 2750 of the Conduct Rules and (b)
with Rule 2420 of the Conduct Rules as that Rule applies to a non-NASD member
broker or dealer in a foreign country and (3), in connection with an Exempted
Securities Offering, if you are a Bank, you will also comply, as though you were
an NASD member, with the provision of Rules 2730, 2740 and 2750 of the Conduct
Rules.
You further agree that, in connection with any purchase of
securities from us that is not otherwise covered by the terms of this Agreement
(whether we are acting as manager, as a member of an underwriting syndicate or a
selling group or otherwise), if a selling Concession, discount or other
allowance is granted to you, clauses (1), (2) and (3) of the preceding paragraph
will be applicable.
(f) Relationship among Underwriters and Selected Dealers.
We may buy Securities from or sell Securities to any Underwriter or Selected
Dealer and the Underwriters (if any) and the Selected Dealers may purchase
Securities from and sell Securities to each other at the Public Offering Price
less all or any part of the Reallowance. You are not authorized to act as agent
for us, any Underwriter or the issuer or other seller of any Securities in
offering Securities to the public or otherwise. Neither we nor any Underwriter
shall be under any obligation to you except for obligations assumed hereby or in
any Written Communication from us in connection with any Offering. Nothing
contained herein or in any Written Communication from us shall constitute the
Selected Dealers an association or partners with us or any Underwriter or with
one another. If the Selected Dealers, among themselves or with the Underwriters,
should be deemed to constitute a partnership for Federal income tax purposes,
then you elect to be excluded from the application of Subchapter K, Chapter 1,
Subtitle A of the Internal Revenue Code of 1986 and agree not to take any
position inconsistent with that election. You authorize us, in our discretion,
to execute and file on your behalf such evidence of that election as may be
required by the Internal Revenue Service. In connection with any Offering, you
shall be liable for your proportionate amount of any tax, claim, demand or
liability that may be asserted against you alone or against one or more Selected
Dealers participating in such Offering, or against us or the Underwriters, based
upon the claim that the Selected Dealers (including you), or any of them,
constitute an association, an unincorporated business or other
E-4
entity, including, in each case, your proportionate amount of any expense
incurred in defending against any such tax, claim, demand or liability.
(g) Blue Sky Laws. Upon application to us, we shall
inform you as to any advice we have received from counsel concerning the
jurisdictions in which Securities have been qualified for sale or are exempt
under the securities or blue sky laws of such jurisdictions, but we do not
assume any obligation or responsibility as to your right to sell Securities in
any such jurisdiction.
(h) Compliance with Law. You agree that in selling
Securities pursuant to any Offering (which agreement shall also be for the
benefit of the issuer or other seller of such Securities) you will comply with
all applicable laws, rules and regulations, including the applicable provisions
of the Securities Act and the Exchange Act, the applicable rules and regulations
of the Securities and Exchange Commission thereunder, the applicable rules and
regulations of the NASD, the applicable rules and regulations of any securities
exchange having jurisdiction over the Offering and the applicable laws, rules
and regulations specified in Section 3(b) hereof.
(i) Registration of the Securities. You are aware that no
action has been or will be taken by the issuer of the Securities that would
permit the offer or sale of the Securities or possession or distribution of the
Prospectus or any other offering material relating to the Securities in any
jurisdiction where action for that purpose is required, other than registering
the Securities under the Securities Act in the case of a Registered Offering.
Accordingly, you agree that you will observe all applicable laws and regulations
in each jurisdiction in or from which you may directly or indirectly acquire,
offer, sell, or deliver Securities or have in your possession or distribute the
Prospectus or any other offering material relating to the Securities, and you
will obtain any consent, approval or permission required by you for the
purchase, offer, or sale by you of the Securities under the laws and regulations
in force in any such jurisdiction to which you are subject or in which you make
such purchase, offer, or sale. Neither the issuer of the Securities nor AAFS or
any Selected Dealers or Underwriters shall have any responsibility for
determining what compliance is necessary by you or for your obtaining such
consents, approvals, or permissions. You further agree that you will take no
action that will impose any obligations on the issuer of the Securities, AAFS,
or any Selected Dealers or Underwriters. Subject as provided above, you shall,
unless prohibited by applicable law, furnish to each person to whom you offer,
sell or deliver Securities a copy of the Prospectus (as then amended or
supplemented) or (unless delivery of the Prospectus is required by applicable
law) inform each such person that a copy thereof (as then amended or
supplemented) will be made available upon request. You are not authorized to
give any information or to make any representation not contained in the
Prospectus or the documents incorporated by reference or specifically referred
to therein in connection with the offer and sale of the Securities. In the case
of an Exempted Securities Offering, all references to "Prospectus" in this
section shall be interpreted to mean "offering circular."
4. Indemnification. You agree to indemnify and hold
harmless ABN AMRO Financial Services, Inc., the issuer of the Securities, each
person, if any, who controls (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) ABN AMRO Financial Services,
Inc. or the issuer of the Securities, and their respective directors,
E-5
officers and employees from and against any and all losses, liabilities, costs
or claims (or actions in respect thereof) (collectively, "LOSSES") to which any
of them may become subject (including all reasonable costs of investigating,
disputing or defending any such claim or action), insofar as such Losses arise
out of or are in connection with the breach of any representation, warranty or
agreement made by you herein.
If any claim, demand, action or proceeding (including any
governmental investigation) shall be brought or alleged against an indemnified
party in respect of which indemnity is to be sought against an indemnifying
party, the indemnified party shall promptly notify the indemnifying party in
writing, and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnified party may
designate in such proceeding and shall pay the reasonable fees and expenses of
such counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the reasonable fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) the indemnifying party has failed
within a reasonable time to retain counsel reasonably satisfactory to such
indemnified party or (iii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
agreed that the indemnifying party shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate law firm (in addition to local
counsel where necessary) for all such indemnified parties. Such firm shall be
designated in writing by the indemnified party. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
The indemnity agreements contained in this Section and the
representations and warranties by you in this Agreement shall remain operative
and in full force and effect regardless of: (i) any termination of this
Agreement; (ii) any investigation made by an indemnified party or on such
party's behalf or any person controlling an indemnified party or by or on behalf
of the indemnifying party, its directors or officers or any person controlling
the indemnifying party; and (iii) acceptance of and payment for any Securities.
5. Termination, Supplements and Amendments. This
Agreement constitutes the entire agreement of the parties with regard to the
subject matter hereof and supercedes all prior oral or written agreements
between the parties hereto or their predecessors with regard to the subject
matter hereof. This Agreement may be terminated by Written Communication from
you to AAFS or from AAFS to you. Until so terminated, this Agreement shall
continue in full force and effect. This Agreement may be supplemented or amended
by us by written notice
E-6
thereof to you, and any such supplement or amendment to this Agreement shall be
effective with respect to any Offering to which this Agreement applies after the
date you received such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Section 3(c) hereof with
regard to any Offering will terminate at the close of business on the 30th day
after the commencement of the public offering of the Securities to which such
Offering relates, but in our discretion may be extended by us for a further
period not exceeding 30 days and in our discretion, whether or not extended, may
be terminated at any earlier time.
6. Successors and Assigns. This Agreement shall be
binding on, and inure to the benefit of, the parties hereto and other persons
specified in Section 1 hereof, and the respective successors and assigns of each
of them.
7. Governing Law. This Agreement and the terms and
conditions set forth herein with respect to any Offering together with such
supplementary terms and conditions with respect to such Offering as may be
contained in any Written Communication from us to you in connection therewith
shall be governed by, and construed in accordance with, the laws of the State of
New York.
E-7
Please confirm by signing and returning to us the enclosed copy of this
Agreement that your subscription to, or your acceptance of any reservation of,
any Securities pursuant to an Offering shall constitute (i) acceptance of and
agreement to the terms and conditions of this Agreement (as supplemented and
amended pursuant to Section 5 hereof) together with and subject to any
supplementary terms and conditions contained in any Written Communication from
us in connection with such Offering, all of which shall constitute a binding
agreement between you and us, individually or as representative of any
Underwriters, (ii) confirmation that your representations and warranties set
forth in Section 3 hereof are true and correct at that time, (iii) confirmation
that your agreements set forth in Sections 2 and 3 hereof have been and will be
fully performed by you to the extent and at the times required thereby and (iv)
in the case of any Offering described in Section 3(a) and 3(b) hereof,
acknowledgment that you have requested and received from us sufficient copies of
the final prospectus or offering circular, as the case may be, with respect to
such Offering in order to comply with your undertakings in Section 3(a) or 3(b)
hereof.
Very truly yours,
ABN AMRO FINANCIAL SERVICES, INC.
By:
--------------------------------
Name:
Title:
CONFIRMED: ________ __, 200_
(NAME OF BROKER-DEALER)
By:
----------------------
Name:
Title:
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