EXHIBIT 1.1
UNITED PARCEL SERVICE, INC.
CLASS B COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------
UNDERWRITING AGREEMENT
July ___, 2002
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Certain shareowners named in Schedule I hereto (the "Selling
Shareowners") of United Parcel Service, Inc., a Delaware corporation (the
"Company"), propose, subject to the terms and conditions stated herein, to
issue and sell to you as Underwriter (the "Underwriter") an aggregate of
____________ shares (the "Shares") of Class B Common Stock, par value $.01 per
share ("Class B Stock"), of the Company.
1. (a) The Company represents and warrants to, and agrees with,
you that:
(i) A registration statement on Form S-3 (File No.
333-86468) (the "Initial Registration Statement") in respect of the
Shares has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore
delivered to you, have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document
with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto
or the Rule 462(b) Registration Statement, if any, has been issued and
no proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (i) the information contained in the
form of final prospectus filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof and deemed
by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective and (ii)
the documents incorporated by reference in the prospectus contained in
the Initial Registration Statement at the time such part of the
Initial Registration Statement
became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be; and
any reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement;
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein or by
a Selling Shareowner expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents, when they became effective or were filed with the
Commission, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein;
(iv) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of
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the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by ▇▇▇▇▇▇▇, Sachs &
Co. expressly for use therein or by a Selling Shareowner expressly for
use in the preparation of the answers therein to Item 7 of Form S-3;
(v) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
otherwise stated therein there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any material adverse change, or any development reasonably likely to
result in a material adverse change, in or affecting the business,
financial condition, shareowners' equity or results of operations of
the Company and its subsidiaries taken as a whole;
(vi) This Agreement has been duly authorized, executed
and delivered by the Company;
(vii) The Company and each of its subsidiaries that is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X
(a "Significant Subsidiary"), including without limitation United
Parcel Service, Inc., a New York corporation ("UPS-New York"), United
Parcel Service, Inc., an Ohio corporation ("UPS-Ohio"), United Parcel
Service Co., a Delaware corporation ("UPSCo"), and UPS Worldwide
Forwarding, Inc. a Delaware corporation ("WWF"), have title to all
real property and title to all personal property owned by them that is
material to the business of the Company and its subsidiaries taken as
a whole, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as
would not, singly or in the aggregate, have a material adverse affect
on the Company and its subsidiaries taken as a whole;
(viii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus,
and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole; and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation;
(ix) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of Class B Stock
and Class A Common Stock, par value $.01 per share (the "Class A Stock"
and, together with the Class B Stock, the "Stock"), have been duly and
validly authorized and issued and are fully paid and non-assessable;
the shares of Class A Stock are convertible into shares of Class B
Stock as described in the Prospectus and all of the issued shares of
Stock conform to the description of the Stock contained in the
Prospectus; the Company has no shares of capital stock outstanding
other than the Stock; and all of the issued shares of capital stock of
each Significant Subsidiary have been duly and validly authorized and
issued, are fully paid
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and non-assessable and are owned directly or indirectly by the
Company, free and clear of all adverse claims;
(x) The Shares to be sold by the Selling Shareowners to
the Underwriter hereunder have been duly and validly authorized and,
when issued and delivered upon conversion of shares of Class A Stock
owned by such Selling Shareowners, will be duly and validly issued and
fully paid and non-assessable and will conform to the description of
the Stock contained in the Prospectus;
(xi) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any
Significant Subsidiary is a party, or by which the Company or any
Significant Subsidiary is bound, that is material to the Company and
its subsidiaries taken as a whole, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any Significant Subsidiary; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required to be obtained
by the Company for the sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws or any applicable law, rule or
regulation of any foreign jurisdiction in connection with the purchase
and distribution of the Shares by the Underwriter;
(xii) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any Significant Subsidiary is a party or of which any property of the
Company or any Significant Subsidiary is the subject that are required
to be described in the Registration Statement and the Prospectus and
are not so described;
(xiii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be, required to register as
an "investment company", as such term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(xiv) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its subsidiaries are
independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder;
(xv) Except as set forth in or contemplated by the
Prospectus, the Company and each Significant Subsidiary (i) is in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions
of any
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such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(xvi) Except as set forth in the Prospectus, there are no
costs or liabilities associated with Environmental Laws (including
without limitation any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, reasonably be expected to
have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(xvii) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act
with respect to any securities of the Company or to require the
Company to include such securities with the Shares registered pursuant
to the Registration Statement;
(xviii) The Company and the Significant Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
the business of the Company and the Significant Subsidiaries in all
material respects as described in the Prospectus, and neither the
Company nor any Significant Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries taken as a whole, except as described
in the Prospectus; and
(xix) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability of assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect
to any differences.
(b) Each of the Selling Shareowners severally, and not jointly,
represents and warrants to, and agrees with, you and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Shareowner of
this Agreement and the Power of Attorney and the Letter Agreement
hereinafter referred to, and for the sale and delivery of the Shares
to be sold by such Selling Shareowner hereunder, have been obtained;
and such Selling Shareowner has full right, power and authority to
enter into this Agreement, the Power-of-Attorney and the Letter
Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareowner hereunder;
(ii) The sale of the Shares to be sold by such Selling
Shareowner hereunder and the compliance by such Selling Shareowner
with all of the provisions of this Agreement,
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the Power of Attorney and the Letter Agreement and the consummation of
the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Shareowner is a party or by which
such Selling Shareowner is bound or to which any of the property or
assets of such Selling Shareowner is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Shareowner if such Selling
Shareowner is a corporation, the constitutive documents of such
Selling Shareowner if such Selling Shareowner is an entity other than
a corporation or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over such
Selling Shareowner or the property of such Selling Shareowner;
(iii) Such Selling Shareowner has, and immediately prior
to the Time of Delivery (as defined in Section 4 hereof) such Selling
Shareowner will have, good and valid title to the shares of Class A
Stock that will convert automatically into the Shares to be sold by
such Selling Shareowner hereunder, free and clear of all adverse
claims; and, upon delivery of such Shares and payment therefor
pursuant hereto, title to such Shares, free of adverse claims, will
pass to the Underwriter;
(iv) Such Selling Shareowner has not taken and will not
take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares;
(v) To the extent that any statements or omissions made
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto are made in reliance
upon and in conformity with written information furnished to the
Company by such Selling Shareowner expressly for use therein, such
Preliminary Prospectus and the Registration Statement did, and the
Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus, when they become effective
or are filed with the Commission, as the case may be, will, conform in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(vi) In order to document the Underwriter's compliance
with the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the transactions
herein contemplated, such Selling Shareowner will deliver to you prior
to or at the First Time of Delivery a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form
or statement specified by Treasury Department regulations in lieu
thereof);
(vii) Such Selling Shareowner has duly executed and
delivered a Letter Agreement, in the form heretofore furnished to you
(the "Letter Agreement"), to Mellon Investor Services LLC, as agent
(the "Agent"), pursuant to which such Selling Shareowner has
irrevocably instructed the Agent to credit by book entry to an account
designated by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. all of the Shares to be sold by
such Selling Shareowner as provided in the Letter Agreement, and such
Selling Shareowner has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule I hereto, and
each of them, as such Selling Shareowner's attorneys-in-fact (the
"Attorneys-in-Fact") with
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authority to execute and deliver this Agreement on behalf of such
Selling Shareowner, to determine the purchase price to be paid by the
Underwriter to the Selling Shareowners as provided in Section 2
hereof, to authorize the delivery of the Shares to be sold by such
Selling Shareowner hereunder and otherwise to act on behalf of such
Selling Shareowner in connection with the transactions contemplated by
this Agreement and the Letter Agreement; and
(viii) The shares of such Selling Shareowner's Class A Stock
held in book-entry form at Mellon Investor Services LLC, the transfer
agent, that are covered by such Selling Shareowner's Letter Agreement
are subject to the interests of the Underwriter hereunder; the
arrangements made by such Selling Shareowner under the Letter
Agreement, and the appointment by such Selling Shareowner of the
Attorneys-in-Fact by the Power of Attorney, are to that extent
irrevocable; the obligations of such Selling Shareowner hereunder shall
not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Shareowner or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee
or the termination of such estate or trust, or in the case of a
partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event; if any individual
Selling Shareowner or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or
if any such partnership or corporation should be dissolved, or if any
other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by
or on behalf of such Selling Shareowner in accordance with the terms
and conditions of this Agreement and of such Selling Shareowner's
Letter Agreement; and actions taken by the Attorneys-in-Fact pursuant
to the Power of Attorney granted by such Selling Shareowner shall be as
valid as if such death, incapacity, termination, dissolution or other
event had not occurred, regardless of whether or not the Agent, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, each of
the Selling Shareowners agrees, severally and not jointly, to sell to you, and
you agree to purchase from each of the Selling Shareowners, at a purchase price
per share of $____, the number of Shares set forth opposite their respective
names in Schedule I hereto.
3. Upon the authorization by you of the release of the Shares,
the Underwriter proposes to offer the Shares for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by you hereunder, in definitive
form, and in such authorized denominations and registered in such names as
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may request upon at least forty-eight hours' prior notice
to the Selling Shareowners shall be delivered by or on behalf of each Selling
Shareowner to ▇▇▇▇▇▇▇, Sachs & Co., through the facilities of the Depository
Trust Company ("DTC"), for your account, against payment by you of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified by each of the Selling Shareowners, as their interests may appear, to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. at least forty-eight hours in advance. The Company will
cause the certificates representing the Shares to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery (as
defined below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York time, on July __, 2002, or such other time and date as ▇▇▇▇▇▇▇, Sachs & Co.
and the Selling Shareowners may agree upon in writing. Such time and date are
herein called the "Time of Delivery".
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(b) The documents to be delivered at the Time of Delivery by or
on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriter pursuant to Section 7(l) hereof, will be delivered at the offices
of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at the Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next preceding the
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by
the parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with the Underwriter:
(a) To prepare the Prospectus in a form approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the Time of Delivery
which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as
you may reasonably request to qualify the Shares for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriter with written and electronic
copies of the Prospectus in New York City in such quantities as you
may reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
time of issue of the Prospectus in connection with the offering or
sale of the Shares and if at such time any events shall
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have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to
comply with the Act or the Exchange Act, to notify you and upon your
request to file such document and to prepare and furnish without
charge to the Underwriter and to any dealer in securities as many
written and electronic copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such
compliance, and in case the Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of the Underwriter, to prepare and
deliver to the Underwriter as many written and electronic copies as
you may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders
as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the
Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(e) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act; and
(f) Upon your request, to furnish, or cause to be
furnished, to you an electronic version of the Company's trademarks,
servicemarks and corporate logo for use on the website, if any,
operated by the Underwriter for the purpose of facilitating the
on-line offering of the Shares (the "License"); provided, however,
that the License shall be used solely for the purpose described above,
is granted without any fee and may not be assigned or transferred.
6. The Company and each of the Selling Shareowners covenant and
agree with one another and with the Underwriter that (a) such Selling
Shareowner will pay or cause to be paid a pro rata share (based on the number
of Shares to be sold by such Selling Shareowner hereunder) of the following:
(i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriter and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriter in
connection with such qualification and in connection with the Blue
9
Sky survey; (iv) all fees and expenses in connection with listing the Shares on
the New York Stock Exchange and (v) the filing fees incident to, and the fees
and disbursements of counsel for the Underwriter in connection with, securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Shares; and (b) the Company will pay or cause to
be paid: (i) the cost of preparing stock certificates; (ii) the cost and
charges of any transfer agent or registrar; (iii) the fees, disbursements and
expenses of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP as counsel for the Underwriter that are
not referred to in clauses (a)(iii) or (a)(v) above; and (iv) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section; and (c) such Selling
Shareowner will pay or cause to be paid all costs and expenses incident to the
performance of such Selling Shareowner's obligations hereunder which are not
otherwise specifically provided for in this Section, including (i) any fees and
expenses of counsel for such Selling Shareowner, (ii) such Selling Shareowner's
pro rata share of the fees and expenses of the Attorneys-in-Fact and the Agent,
and (iii) all expenses and taxes incident to the sale and delivery of the
Shares to be sold by such Selling Shareowner to the Underwriter hereunder. In
connection with clause (c)(iii) of the preceding sentence, ▇▇▇▇▇▇▇, Sachs & Co.
agrees to pay New York State stock transfer tax, and each Selling Shareowner
agrees to reimburse ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. for associated carrying costs if such
tax payment is not rebated on the day of payment and for any portion of such
tax payment not rebated. It is understood, however, that the Company shall
bear, and the Selling Shareowners shall not be required to pay or to reimburse
the Company for, the cost of any other matters not directly relating to the
sale and purchase of the Shares pursuant to this Agreement, and that, except as
provided in this Section, and Sections 8 and 10 hereof, the Underwriter will
pay all of its own costs and expenses, other than the fees, disbursements and
expenses of its counsel referred to above, including stock transfer taxes on
resale of any of the Shares by it, and any advertising expenses connected with
any offers it may make.
7. The obligations of the Underwriter hereunder shall be
subject, in your discretion, to the condition that all representations and
warranties and other statements of the Company and of the Selling Shareowners
herein are, at and as of the Time of Delivery, true and correct, the condition
that the Company and the Selling Shareowners shall have performed all of its
and their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 p.m., Washington, D.C. time, on the
date of this Agreement; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied
with to your reasonable satisfaction;
(b) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriter, shall have furnished to you such written opinion or
opinions (a draft of each such opinion is attached as Annex II(a)
hereto), dated the Time of Delivery, with respect to the matters
covered in paragraphs (i), (ii), (iii), (iv), (vi) and (vii) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
10
(c) King & Spalding, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus;
(ii) 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; and the Shares conform to the description of
the Stock contained in the Prospectus;
(iii) This Agreement has been duly authorized,
executed and delivered by the Company;
(iv) The statements set forth in the Prospectus
under the caption "Description of Capital Stock", insofar as
they purport to constitute a summary of the terms of the Stock
and under the caption "Underwriting", insofar as they purport
to describe the provisions of the laws and documents referred
to therein, fairly summarize the matters referred to therein;
(v) The Company is not required to be
registered as an "investment company", as such term is
defined in the Investment Company Act;
(vi) The documents incorporated by reference in
the Prospectus or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable
and the rules and regulations of the Commission thereunder;
and
(vii) The Registration Statement and the
Prospectus and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and
the rules and regulations thereunder.
In addition, such counsel 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, except for those referred to
in the opinion in subsection (iv) of this Section 7(c), it has no
reason to believe (A) that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior
to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (B) that, as of its
date, the Prospectus or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted 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 or that, as of the Time of
Delivery, either the Registration
11
Statement or the Prospectus or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to which
such counsel need express no opinion) contains an untrue statement of
a material fact or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of any amendment
to the Registration Statement required to be filed or of any contracts
or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required;
(d) [Name], [Title] for the Company shall have furnished
to you [his] written opinion (a draft of such opinion is attached as
Annex II(c) hereto), dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly qualified as a
foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification,
except to the extent that the failure to be so qualified
would not have a material adverse effect on the Company and
its subsidiaries taken as a whole;
(ii) Each Significant Subsidiary, including
without limitation UPS-New York, UPS-Ohio, UPSCo and WWF, has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares
of capital stock of each such subsidiary have been duly and
validly authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly by the
Company, free and clear of all adverse claims;
(iii) After due inquiry, such counsel does not
know of any legal or governmental proceedings pending to
which the Company or any Significant Subsidiary is a party or
of which any property of the Company or any Significant
Subsidiary is the subject, that are required to be described
in the Registration Statement or the Prospectus and are not
so described;
(iv) The compliance by the Company with all of
the provisions of this Agreement and the consummation of the
transactions herein contemplated will not (A) conflict with
or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound that is material to the Company
and its subsidiaries taken as a whole, (B) result in any
violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or (C) result in any
violation of any statute or any order, rule or regulation
(except for federal and state securities laws and
regulations, as to which counsel need not express any opinion
under this clause (iv)) known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties
except in the case of clause (A) or (C) where such violation
would not have a material adverse effect on the Company and
its subsidiaries taken as a whole;
12
(v) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required to be obtained by the
Company for the sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares, and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws or any applicable law, rule or regulation of
any foreign jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriter;
(vi) The documents incorporated by reference in
the Prospectus or any further amendment or supplement thereto
made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable
and the rules and regulations of the Commission thereunder;
and
(vii) The Registration Statement and the
Prospectus and any further amendments and supplements thereto
made by the Company prior to the Time of Delivery (other than
the financial statements and related schedules therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act and
the rules and regulations thereunder.
In addition, such counsel shall state that: (i) although such
counsel does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in any of the documents
incorporated by reference in the Prospectus or any further amendment
or supplement thereto made by the Company prior to the Time of
Delivery, such counsel has no reason to believe that any of such
documents, when such documents became effective or were so filed, as
the case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact, or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and (ii) although such counsel does do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
such counsel has no reason to believe (A) that, as of its effective
date, the Registration Statement or any further amendment thereto made
by the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or (B)
that, as of its date, the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of the Time of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such
13
counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and such counsel does not know of any
amendment to the Registration Statement required to be filed or of any
contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be incorporated
by reference into the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required;
(e) The respective counsel for each of the Selling
Shareowners, as indicated in Schedule I hereto, each shall have
furnished to you their written opinion with respect to each of the
Selling Shareowners for whom they are acting as counsel (a draft of
each such opinion is attached as Annex II(d) hereto), dated the Time
of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Power-of-Attorney and the Letter
Agreement have been duly executed and delivered by such
Selling Shareowner and constitute valid and binding agreements
of such Selling Shareowner in accordance with their terms;
(ii) This Agreement has been duly executed and
delivered by or on behalf of such Selling Shareowner; and the
sale of the Shares to be sold by such Selling Shareowner
hereunder and the compliance by such Selling Shareowner with
all of the provisions of this Agreement, the
Power-of-Attorney and the Letter Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which such Selling Shareowner is a party
or by which such Selling Shareowner is bound or to which any
of the property or assets of such Selling Shareowner is
subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of
such Selling Shareowner if such Selling Shareowner is a
corporation or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over such Selling Shareowner or the property of
such Selling Shareowner;
(iii) No consent, approval, authorization or
order of any court or governmental agency or body is required
for the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by such
Selling Shareowner hereunder, except such as have been
obtained under the Act and such as may be required under
state securities or Blue Sky laws or any applicable law, rule
or regulation of any foreign jurisdiction in connection with
the purchase and distribution of such Shares by the
Underwriter;
(iv) Immediately prior to the Time of Delivery,
the shares of Class A Stock to be converted into the Shares
sold at the Time of Delivery by such Selling Shareowner under
this Agreement were registered on the books of the Company in
the name of such Selling Shareowner, such Selling Shareowner
owned such Class A Stock free and clear of all adverse claims
within the meaning of the Uniform Commercial Code, and such
Selling Shareowner had full right, power and authority to
sell, assign, transfer and deliver the Shares to be sold by
such Selling Shareowner hereunder; and
(v) The Shares have been acquired, free and
clear of all adverse claims, by the Underwriter who has
purchased such Shares without notice of any adverse claim
within the meaning of the Uniform Commercial Code.
14
In rendering the opinions in paragraphs (ii) and (iii), such counsel
may rely upon a certificate of such Selling Shareowner in respect of matters
of fact confirming that no such breach or violation of the agreements or
instruments referred to therein would result from, and no consent, approval,
authorization or order of any court or governmental agency or body is required
for, the consummation of the transactions contemplated hereby; provided that
such counsel shall state that they have no reason to believe that reliance on
the certificate is unreasonable. In rendering the opinion in paragraphs (iv)
and (v), such counsel may rely upon a certificate of such Selling Shareowner in
respect of matters of fact as to ownership of, and liens, encumbrances,
equities or claims on, the Shares sold by such Selling Shareowner, provided
that such counsel shall state that they have no reason to believe that reliance
on the certificate is unreasonable;
(f) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
the Time of Delivery, Deloitte & Touche LLP shall have furnished to
you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered
prior to the execution of this Agreement is attached as Annex I(a)
hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of the Time of Delivery is attached as Annex I(b)
hereto);
(g) Since the respective dates as of which information
is given in the Prospectus neither the Company nor any of its
subsidiaries shall have sustained any loss or interference with its
business from any calamity, labor dispute or court or governmental
action, order or decree, and there shall not have been any change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development reasonably likely to
result in a change, in or affecting the business, financial condition,
shareowners' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which in any such case is in your judgment
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares on the
terms and in the manner contemplated in the Prospectus;
(h) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities by
any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(i) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange;
(ii) a suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either Federal or New
York State authorities or a material disruption in commercial banking
or securities settlement or clearance services in the United States;
or (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency
or war; or (v) the occurrence of any other calamity or crisis or any
change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in
clause (iv) or (v) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares on the terms and in the manner contemplated in the Prospectus;
(j) The Shares at the Time of Delivery shall have been
duly listed, subject to notice of issuance, on the New York Stock
Exchange;
15
(k) The Company shall have complied with the provisions
of Section 5(c) hereof with respect to the furnishing of prospectuses
on the New York Business Day next succeeding the date of this
Agreement; and
(l) The Company and the Selling Shareowners shall have
furnished or caused to be furnished to you at the Time of Delivery
certificates of officers of the Company and of the Selling
Shareowners, respectively, satisfactory to you as to the accuracy of
the representations and warranties of the Company and the Selling
Shareowners, respectively, herein at and as of the Time of Delivery,
as to the performance by the Company and the Selling Shareowners of
all of their respective obligations hereunder to be performed at or
prior to the Time of Delivery, and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to
be furnished certificates as to the matters set forth in subsections
(a) and (f) of this Section.
8. (a) The Company will indemnify and hold harmless the
Underwriter against any losses, claims, damages or liabilities to which the
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Underwriter for any legal or
other expenses reasonably incurred by the Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co. expressly for use therein.
(b) Each of the Selling Shareowners, severally but not jointly,
will indemnify and hold harmless the Underwriter against any losses, claims,
damages or liabilities to which the Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareowner expressly for use therein;
and will reimburse the Underwriter for any legal or other expenses reasonably
incurred by the Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that
such Selling Shareowner shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by ▇▇▇▇▇▇▇, Sachs
& Co. expressly for use therein; and provided, further, that the
16
liability of a Selling Shareowner pursuant to this subsection (b) shall not
exceed the product of the number of Shares sold by such Selling Shareowner and
the initial public offering price of the Shares as set forth in the Prospectus.
(c) The Underwriter will indemnify and hold harmless the Company
and each Selling Shareowner against any losses, claims, damages or liabilities
to which the Company or such Selling Shareowner may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein; and
will reimburse the Company and each Selling Shareowner for any legal or other
expenses reasonably incurred by the Company or such Selling Shareowner in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareowners on
the one hand and the Underwriter on the other from the offering of
17
the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (d) above, 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 and the Selling Shareowners on the
one hand and the Underwriter 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 and the Selling
Shareowners on the one hand and the Underwriter on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareowners bear to
the total underwriting discounts and commissions received by the Underwriter,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or the Selling Shareowners on the one hand or the Underwriter on
the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
each of the Selling Shareowners and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (e). 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 (e) 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 (e), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which the Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The obligations of the Company and the Selling Shareowners
under this Section 8 shall be in addition to any liability which the Company
and the respective Selling Shareowners may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability which
the Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company or any Selling Shareowner within the meaning of
the Act.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling Shareowners and the
Underwriter, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Underwriter or any controlling person of
the Underwriter, or the Company, or any of the Selling Shareowners, or any
officer or director or controlling person of the Company, or any controlling
person of any Selling Shareowner, and shall survive delivery of and payment for
the Shares.
18
10. If for any reason the Shares are not delivered by or on
behalf of the Selling Shareowners as provided herein, each of the Selling
Shareowners pro rata (based on the number of Shares to be sold by the Company
and such Selling Shareowner hereunder) will reimburse the Underwriter for all
out-of-pocket expenses reasonably incurred by the Underwriter in making
preparations for the purchase, sale and delivery of the Shares, but the Company
and the Selling Shareowners shall then be under no further liability to the
Underwriter except as provided in Sections 6 and 8 hereof.
11. In all dealings with any Selling Shareowner hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Shareowner made or given by any
or all of the Attorneys-in-Fact for such Selling Shareowner.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriter shall be delivered or sent by mail, telex or
facsimile transmission to you at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Registration Department (facsimile no: 212-___-____); if to any
Selling Shareowner shall be delivered or sent by mail, telex or facsimile
transmission to counsel for such Selling Shareowner at its address set forth in
Schedule I hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter, the Company and the Selling Shareowners and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Shareowner or
the Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
16. The Company and the Selling Shareowners are authorized,
subject to applicable law, to disclose any and all aspects of this potential
transaction that are necessary to support any U.S. federal income tax benefits
expected to be claimed with respect to such transaction, without the
Underwriter imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you
this letter and such acceptance hereof shall constitute a binding agreement
among the Underwriter, the Company and each of the Selling Shareowners.
19
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Shareowner represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Shareowner pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
UNITED PARCEL SERVICE, INC.
By:
----------------------------------------
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇ FOUNDATION
UPS RETIREMENT PLAN
UPS PENSION PLAN
UPS THRIFT PLAN
By:
----------------------------------------
Name:
As Attorney-in-Fact acting on behalf of
each of the Selling Shareowners named in
Schedule I to this Agreement
Accepted as of the date hereof at
New York, NY
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
By:
----------------------------------------
Name:
Title:
20
SCHEDULE I
TOTAL NUMBER OF
SHARES
TO BE SOLD
---------------
The Selling Shareowners:............................................
▇▇▇▇▇ ▇. ▇▇▇▇▇ Foundation(a)...................................
UPS Retirement Plan(b).........................................
UPS Thrift Plan(c).............................................
UPS Pension Plan(d)............................................
---------------
Total......................................................
===============
(a) ▇▇▇▇▇ ▇. ▇▇▇▇▇ Foundation is represented by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (facsimile no. 215-751-2205) and has
appointed D. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and each of them, as the
Attorneys-in-Fact for such Selling Shareowner.
(b) The UPS Retirement Plan is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed D. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and each of them,
as the Attorneys-in-Fact for such Selling Shareowner.
(c) The UPS Thrift Plan is represented by [NAME AND ADDRESS OF COUNSEL] and
has appointed D. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and each of them, as
the Attorneys-in-Fact for such Selling Shareowner.
(d) The UPS Pension Plan is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed D. ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and each of them,
as the Attorneys-in-Fact for such Selling Shareowner.
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriter to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited by them and
included or incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations
thereunder;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited consolidated statements of income, consolidated
balance sheets, consolidated statements of shareowners' equity and
consolidated statements of cash flows included in the Prospectus
and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Underwriter; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused
them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations;
(iv) They have compared the unaudited selected financial
information with respect to the consolidated results of operations and
financial position of the Company for the five most recent fiscal
years included in the Prospectus and included or incorporated by
reference in Item 6 of the Company's Annual Report on Form 10-K for
the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated
financial statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years and found them to be in agreement;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting
an audit in accordance with auditing standards generally accepted in
the United States of America, consisting of a reading of the unaudited
financial statements and other information referred to below, a
reading of the latest available interim financial statements of the
Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since
A-1
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited consolidated statements
of income, consolidated balance sheets, consolidated
statements of shareowners' equity and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it
applies to Form 10-Q and the related published rules and
regulations, or (ii) any material modifications should be
made to the unaudited consolidated statements of income,
consolidated balance sheets, consolidated statements of
shareowners' equity and consolidated statements of cash flows
included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus, for them to be conformity with accounting
principles generally accepted in the United States of
America;
(B) the unaudited financial statements which
were not included in the Prospectus but from which were
derived the unaudited financial statements referred to in
clause (A) were not determined on a basis substantially
consistent with the basis for the audited financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) any unaudited pro forma consolidated
financial statements prepared by the Company included or
incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the Act and the published rules
and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(D) as of a specified date not more than five
days prior to the date of such letter, there have been any
changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or shareowners' equity, in
each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(E) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause
(D) there were any decreases in consolidated net revenues or
operating profit or the total or basic or diluted per share
amounts of consolidated net income, in each case as compared
with the comparable period of the preceding year and with any
other period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
A-2
(vii) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (vi) above, they
have carried out certain specified procedures, not constituting an
audit in accordance with auditing standards generally accepted in the
United States of America, with respect to certain amounts, percentages
and financial information specified by the Representatives which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found
them to be in agreement.
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