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UST INC.
7.25% SENIOR NOTES DUE JUNE 1, 2009
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
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PURCHASE AGREEMENT
May 25, 1999
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Fleet Securities, Inc.
c/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
UST Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the Purchasers
named in Schedule I hereto (the "Purchasers") an aggregate of $200,000,000
principal amount of the 7.25% Senior Notes due June 1, 2009 (the "Fixed Notes")
and $40,000,000 principal amount of the Floating Rate Senior Notes due June 1,
2009 (the "Floating Notes") (the Fixed Notes and the Floating Notes
collectively, the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering circular, dated May 14, 1999 (the
"Preliminary Offering Circular") and an offering circular, dated May
25, 1999 (the "Offering Circular"), each attaching and incorporating
the Company's Annual Report on Form 10-K for the year ended December
31, 1998 (the "10-K"), and the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999 (the "10-Q"), have been prepared
in connection with the offering of the Securities. Any reference to the
Preliminary Offering Circular or the Offering Circular, as the case may
be, shall be deemed to refer to and include the 10-K and the 10- Q
attached thereto. The 10-K and 10-Q conformed in all material respects
to the applicable
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requirements of the United States Securities Exchange Act of 1934 (the
"Exchange Act") and the applicable rules and regulations of the United
States Securities and Exchange Commission (the "Commission") when filed
with the Commission. The Preliminary Offering Circular or the Offering
Circular and any amendments or supplements thereto and the 10-K and
10-Q did not and will not, as of their respective dates, contain an
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; 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 a Purchaser through
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein;
(b) Neither the Company nor any of its "Significant
Subsidiaries" (as such term is defined in Rule 1-02 of Regulation S-X)
has sustained since the date of the latest audited financial statements
included in the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree which would have individually or
in the aggregate, a material adverse effect or prospective material
adverse effect on the financial condition, results of operations or
business of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"), otherwise than as set forth or contemplated
in the Offering Circular; and, since the respective dates as of which
information is given in the Offering Circular, there has not 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 involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, which would have a Material Adverse
Effect other than as set forth or contemplated in the Offering
Circular;
(c) Except as set forth in the Offering Circular, the Company
and each Significant Subsidiary have (i) good and marketable title to
all personal properties owned by them, free and clear of all liens,
security interests, pledges, charges, encumbrances, and mortgages, and
(ii) valid, subsisting and enforceable leases or licenses for all real
and personal properties leased or licensed by them, subject to such
exceptions as, individually or in the aggregate, do not have and are
not reasonable likely to have a Material Adverse Effect.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Circular, 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 where the failure
to be so qualified in any such jurisdiction would not have a Material
Adverse Effect; and each Significant Subsidiary of the Company has been
duly incorporated and is validly existing as a corporation or limited
liability company in good standing under the laws of its jurisdiction
of incorporation or formation;
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(e) The Company has an authorized capitalization as set forth
in the Offering Circular, 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 all of the issued shares of capital
stock of each Significant Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(f) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the indenture to be dated as of May 27, 1999 (the
"Indenture") between the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee"), under which they are to be issued,
which will be substantially in the form previously delivered to you;
the Indenture has been duly authorized and, when executed and delivered
by the Company and the Trustee, the Indenture will constitute a valid
and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the descriptions thereof
in the Offering Circular and will be in substantially the form
previously delivered to you;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System;
(h) Prior to the date hereof, neither the Company nor any of
its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities;
(i) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is subject
except for such conflict, breach, violation or default which would not
have a Material Adverse Effect, nor will such action result in any
violation of the provisions of (i) the Certificate of Incorporation or
By-laws of the Company 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 subsidiaries or any of
their properties except, in the case of clause (ii) above, such
violation which would
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not have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, except
for the filing of a registration statement by the Company with the
Commission pursuant to the United States Securities Act of 1933, as
amended (the "Act") pursuant to Section 5(k) hereof, the filing of a
notice on Form D by the Company with the Commission pursuant to Section
5(h) hereby, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers;
(j) Neither the Company nor any of its Significant
Subsidiaries is (i) in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound other than any violations or defaults which in
the aggregate would not have a Material Adverse Effect or (ii) in
violation of its Certificate of Incorporation or By-laws;
(k) The statements set forth in the Offering Circular under
the caption "Description of Notes", insofar as they purport to
constitute a summary of the terms of the Securities and under the
caption "Material Federal Income Tax Consequences" and under the
caption "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(l) Other than as set forth in the Offering Circular, there
are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) When the Securities are issued and delivered pursuant to
this Agreement, the Securities will not be of the same class (within
the meaning of Rule 144A under the United States Securities Act of
1933, as amended (the "Act")) as securities which are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated inter-dealer quotation system;
(n) The Company is subject to Section 13 or 15(d) of the
Exchange Act;
(o) The Company is not, and after giving effect to the
offering and sale of the Securities, will not be an "investment
company", as such term is defined in the United States Investment
Company Act of 1940, as amended (the "Investment Company Act");
(p) Neither the Company, nor any person acting on its or their
behalf (other than the Purchasers with respect to whom the Company
makes no representation or warranties)
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has offered or sold the Securities by means of any general solicitation
or general advertising within the meaning of Rule 502(c) under the Act
or, with respect to Securities sold outside the United States to
non-U.S. persons (as defined in Rule 902 under the Act), by means of
any directed selling efforts within the meaning of Rule 902 under the
Securities Act and the Company, any affiliate of the Company and any
person acting on its or their behalf (other than the Purchasers with
respect to whom the Company makes no representation or warranties) has
complied with and will implement the "offering restriction" within the
meaning of such Rule 902;
(q) Within the preceding six months, neither the Company nor
any other person acting on behalf of the Company has offered or sold to
any person any Securities, or any securities of the same or a similar
class as the Securities, other than Securities offered or sold to the
Purchasers hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Securities or any substantially similar security issued by
the Company, within six months subsequent to the date on which the
distribution of the Securities has been completed (as notified to the
Company by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer
and sale of the Securities in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the
registration provisions of the Securities Act;
(r) Ernst & ▇▇▇▇▇, 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;
(s) With respect to the information systems of the Company and
its Significant Subsidiaries, the Company does not believe that the
Year 2000 Problem will have a Material Adverse Effect or result in any
material loss or interference with the Company's business or
operations. In addition, except as disclosed in the Offering Circular,
the Company has no reason to believe that, with respect to the
information systems of any third parties with which the company or any
of its Significant Subsidiaries has a material relationship, the Year
2000 Problem will have a Material Adverse Effect or result in any
material loss or interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization or data or in the operation of
technical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, the Fixed Notes
at a purchase price of 99.335% of the principal amount thereof and the Floating
Notes at a purchase price of 99.350% of the principal amount thereof, as set
forth opposite the name of such Purchaser in Schedule I hereto, in each case
plus accrued interest, if any, from May 27, 1999 to the Time of Delivery (as
defined below) hereunder.
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3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A, (ii) institutions which it reasonably believes are "accredited
investors" ("Institutional Accredited Investors") within the meaning of Rule 501
under the Act, or (iii) upon the terms and conditions set forth in Annex I to
this Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act.
4. (a) Except as set forth in the next paragraph, the Securities to be
purchased by each Purchaser hereunder will be represented by one or more
definitive global Securities in book-entry form which will be deposited by or on
behalf of the Company with The Depository Trust Company ("DTC") or its
designated custodian. The Company will deliver the Securities to ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co., for the account of each Purchaser, against payment by or on behalf of
such Purchaser of the purchase price therefor by wire transfer to an account
specified by the Company in Federal (same day) funds, by causing DTC to credit
the Securities to the account of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. at DTC. The Company will
cause the certificates representing the Securities to be made available to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. for checking 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 City time, on May 27, 1999 or such other time and date as
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the Company may agree upon in writing. Such time and
date are herein called the "Time of Delivery".
Such Securities, if any, as ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. may request
upon at least forty-eight hours' prior to notice to the Company (such request to
include the authorized denominations and the names in which they are to be
registered), shall be delivered in definitive certificated form, by or on behalf
of the Company to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. for the account of certain of the
Purchasers, against payment by or on behalf of such Purchaser of the purchase
price therefor by certified or official bank check or checks, payable to the
order of the Company in Federal (same day) funds. The Company will cause the
certificates representing the Securities to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery at the office
of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(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 Securities and any additional documents requested by the
Purchasers pursuant to Section 7 hereof, will be delivered at such time and date
at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ (the "Closing Location"), and the
Securities will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York
City time, on the New York Business Day next preceding the Time
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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 each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities 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 Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report in the Offering Circular, and
any amendment or supplement containing amendments to the financial statements
covered by such report, signed by the accountants, and additional copies thereof
in such quantities as you may from time to time reasonably request, and if, at
any time prior to the expiration of nine months after the date of the Offering
Circular, any event shall have occurred as a result of which the Offering
Circular 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 Offering Circular is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend or
supplement the Offering Circular, to notify you and upon your request to prepare
and furnish without charge to each Purchaser and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Offering Circular or a supplement to the Offering Circular which will correct
such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date 30 days after the Time of Delivery, not to offer, sell contract
to sell or otherwise dispose of, except as provided hereunder any securities of
the Company that are substantially similar to the Securities.
(e) Not to be or become, at any time prior to the expiration of two
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
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(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Act;
(g) If requested by you, to use its reasonable best efforts to cause
the Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) To file with the Commission, not later than 15 days after the Time
of Delivery, five copies of a notice on Form D under the Act (one of which will
be manually signed by a person duly authorized by the Company); to otherwise
comply with the requirements of Rule 503 under the Act; and to furnish promptly
to you evidence of each such required timely filing (including a copy thereof);
(i) To make generally available to the holders of the Securities as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Offering Circular), to make available to
its stockholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
(j) During a period of three years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Securities, or any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(k) During the period of three years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
(l) The Company shall file and use its reasonable best efforts to cause
to be declared or become effective under the Securities Act, on or prior to 90
days after the Securities are initially issued, a registration statement
providing for the registration of (i) another series of debt securities of the
Company, with terms identical to the Securities (the "Exchange Securities"), and
(ii) the exchange of the Securities for the Exchange Securities, all in a manner
which will permit persons who acquire the Exchange Securities to resell the
Exchange Securities pursuant to Section 4(1) of the Securities Act.
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(m) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Purchasers that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and all other expenses in connection
with the preparation, printing and filing of the Preliminary Offering Circular
and the Offering Circular and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the
cost of printing or producing any Agreement among Purchasers, this Agreement,
the Indenture, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Purchasers in connection with such qualification; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost of preparing
the Securities; (vi) the fees and expenses of the Trustee and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities; (vii) any cost incurred in connection
with the designation of the Securities for trading in PORTAL and all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Purchasers will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to certain matters covered in subsection (b) 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;
(b) ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company,
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President and General Counsel of the
Company, shall have furnished to the Purchasers their written opinions, dated
the Time of Delivery, in form and substance satisfactory to the Purchasers,
collectively 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 Delaware
with full corporate power and authority to own its properties and
conduct its business as described in the Offering Circular;
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(ii) The Company has an authorized capitalization as set forth
in the Offering Circular 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;
(iii) 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, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iv) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation or limited
liability company in good standing under the laws of its jurisdiction
of incorporation or formation, as the case may be; and all of the
issued shares of capital stock or limited liability company interests
of each Significant Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company or its Significant
Subsidiaries, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions and
certificates);
(v) Except as described in the Offering Circular, the Company
and each Significant Subsidiary have (i) good and marketable title to
all personal properties owned by them, free and clear of all liens,
security interests, pledges, charges, encumbrances, and mortgages, and
(ii) valid, subsisting and enforceable leases or licenses for all real
and personal properties leased or licensed by them, subject to such
exceptions as, individually or in the aggregate, do not have and are
not reasonable likely to have a Material Adverse Effect. (In giving the
opinion in this clause, such counsel may state that no examination of
record titles for the purpose of such opinion has been made, and that
they are relying upon a general review of the titles of the Company and
its subsidiaries, upon opinions of local counsel and abstracts, reports
and policies of title companies rendered or issued at or subsequent to
the time of acquisition of such property by the Company or its
subsidiaries, upon opinions of counsel to the lessors of such property
and, in respect of matters of fact, upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying upon
such opinions, abstracts, reports, policies and certificates);
(vi) To the best of such counsel's knowledge and other than as
set forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would have a Material Adverse
Effect on the current or future
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11
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The Securities have been duly authorized, executed and
authenticated, and (assuming payment for the Securities by you in
accordance with the Agreement and due authentication by the Trustee)
when issued and delivered will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture; and the Securities and the Indenture conform to the
descriptions thereof in the Offering Circular;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company, and assuming due authorization, execution and
delivery by the Trustee, will constitute a valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
except to the extent that (i) enforcement thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization and other similar
laws now or hereafter in effect relating to or affecting creditors'
rights and to general equity principles;
(x) The execution and delivery by the Company of each of the
Purchase Agreement, the Indenture, and the Securities and the
performance by the Company of its obligations under each of the
Purchase Agreement, the Indenture and the Securities, each in
accordance with its terms, do not (i) conflict with the Certificate of
Incorporation or Bylaws of the Company, (ii) constitute a violation of
or a default under any Applicable Contracts (as hereinafter defined) or
(iii) cause the creation of any security interest or lien (other than
the liens granted under the Indenture or securing the Notes) upon any
of the property of the Company pursuant to any Applicable Contracts. We
do not express any opinion, however, as to whether the execution,
delivery or performance by the Company of the Purchase Agreement, the
Indenture and the Securities will constitute a violation of or a
default under any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or
results of operations of the Company. "Applicable Contracts" mean those
agreements or instruments set forth on Schedule [III] hereto and which
have been identified to us as all the agreements and instruments which
are material to the business or financial condition of the Company.
(xi) Neither the execution, delivery or performance by the
Company of the Purchase Agreement, the Indenture and the Securities nor
the compliance by the Company with the terms and provisions thereof
will contravene any provision of any Applicable Law. "Applicable Law"
shall mean those laws, rules and regulations of the State of New York
and of the United States of America which, in our experience, are
normally applicable to transactions of the type contemplated by the
Purchase Agreement, the Indenture and the Securities.
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(xii) No Governmental Approval (as hereinafter defined), which
has not been obtained or taken and is not in full force and effect, is
required to authorize or is required in connection with the execution,
delivery or performance of any of the Purchase Agreement, the Indenture
and the Securities by the Company. "Governmental Approval" means any
consent, approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority pursuant to
Applicable Laws.
(xiii) Neither the Company nor any of its Significant
Subsidiaries is (i) in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound which could reasonably be expected to result in
a Material Adverse Effect or (ii) in violation of its Certificate of
Incorporation or By-laws;
(xiv) Although the discussion set forth in the Offering
Memorandum under the caption "Certain Federal Income Tax
Considerations" is only applicable to initial purchasers of Securities
who, for U.S. federal income tax purposes, are not "United States
persons" and the discussion does not purport to discuss all possible
United State federal income tax consequences of the purchase, such
discussion constitutes, in all material respects, a fair summary of the
United States federal income tax consequences of the purchase,
ownership and disposition of the Securities under current law by such
persons; and the statements set forth in the Offering Circular under
the caption "Description of Notes", insofar as they purport to
constitute a summary of the terms of the Securities and under the
caption "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(xv) The 10-K and 10-Q (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission thereunder; and such
counsel has no reason to believe that any of such documents, when they
were so filed, 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 when such documents were so filed, not misleading;
(xvi) No registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust Indenture
Act of 1939 with respect thereto, is required for the offer, sale and
initial resale of the Securities by the Purchasers in the manner
contemplated by this Agreement;
(xvii) Such counsel have no reason to believe that the
Offering Circular and any further amendments or supplements thereto
made by the Company prior to the Time of Delivery (other than the
financial statements therein, as to which such counsel need express no
opinion) contained as of its date or contains as of the Time of
Delivery an untrue statement of a material fact or omitted or omits, as
the case may be, to state a material fact
12
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necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(xviii) The Company is not an "investment company", as such
term is defined in the Investment Company Act.
(c) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, ▇▇▇▇▇ & Young 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 II hereto;
(d) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular 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 involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Purchasers so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(e) 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;
(f) 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 (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of the Purchasers makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Offering
Circular;
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14
(g) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser 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 Offering Circular or the Offering
Circular, 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 necessary
to make the statements therein not misleading, and will reimburse each Purchaser
for any legal or other expenses reasonably incurred by such Purchaser 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 Offering Circular or the
Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Purchaser
through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, 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 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 Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Purchaser through ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party
14
15
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Purchasers on
the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers 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 the Purchasers on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Purchasers, in each case as set forth
in the Offering Circular. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total
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price at which the Securities underwritten by it and distributed to investors
were offered to investors exceeds the amount of any damages which such Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the respective
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of
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a defaulting Purchaser or Purchasers, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Purchaser or the
Company, except for the expenses to be borne by the Company and the Purchasers
as provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Purchaser from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives, ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration Department; 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 Offering Circular, Attention:
Secretary; provided, however, that any notice to a Purchaser pursuant to Section
8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission
to such Purchaser at its address set forth in its Purchasers' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Purchaser, 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
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
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14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. 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 respective counterparts shall together constitute one and
the same instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
UST Inc.
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Fleet Securities, Inc.
---------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Purchasers
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SCHEDULE I
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
FIXED NOTES FLOATING NOTES
TO BE TO BE
PURCHASER PURCHASED PURCHASED
--------- ------------ --------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ....................... $140,000,000 $ 28,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated .......... $ 40,000,000 $ 8,000,000
Fleet Securities, Inc. ..................... $ 20,000,000 $ 4,000,000
------------ ------------
Total ............................. $200,000,000 $ 40,000,000
============ ============
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ANNEX I
(1) The Securities have not been and will not be registered under the Act and
may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act. Each
Purchaser represents that it has offered and sold the Securities, and will offer
and sell the Securities (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Time of Delivery, only in accordance with Rule 903 of Regulation S, Rule
144A, or pursuant to Paragraph 2 of this Annex I under the Act. Accordingly,
each Purchaser agrees that neither it, its affiliates nor any persons acting on
its or their behalf has engaged or will engage in any directed selling efforts
with respect to the Securities, and it and they have complied and will comply
with the offering restrictions requirement of Regulation S. Each Purchaser
agrees that, at or prior to confirmation of sale of Securities (other than a
sale pursuant to Rule 144A) or pursuant to Paragraph 2 of this Annex I, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing date,
except in either case in accordance with Regulation S (or Rule 144A if
available) under the Securities Act. Terms used above have the meaning given
to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter into
any contractual arrangement with respect to the distribution or delivery of the
Securities, except with its affiliates or with the prior written consent of the
Company.
In addition,
(A) except to the extent permitted under ▇.▇. ▇▇▇▇▇. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (i) each Purchaser agrees that it has not
offered or sold, and during the restricted period will not offer or sell,
Securities in bearer form to a person who is within the United States or its
possessions or to a U.S. person, and (ii) it has not delivered and will not
deliver within the United States or its possessions definitive Securities in
bearer form that are sold during the restricted period;
(B) each Purchaser represents and agrees that it has, and throughout
the restricted period will have, in effect procedures reasonably designed to
ensure that its employees or agents who are directly engaged in selling
Securities in bearer form are aware that such Securities may not be offered or
sold during the restricted period to a person who is within the United States
or its possessions or to a United States person, except as permitted by the D
Rules;
A-1
22
(C) if it is a United States person, each such Purchaser represents
that it is acquiring the Securities in bearer form for purposes of resale in
connection with their original issuance and if it retains Securities in bearer
form for its own account, it will only do so in accordance with the
requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); and
(D) with respect to each affiliate that acquires from it Securities in
bearer form for the purpose of offering or selling such Securities during the
restricted period, such Purchaser either (i) repeats and confirms the
representations and agreements contained in clauses (A), (B) and (C) on its
behalf or (ii) agrees that it will obtain from such affiliate for the
Company's benefit the representations and agreements contained in clauses (A),
(B) and (C).
Terms used in this paragraph have the meanings given to them by the United
States Internal Revenue Code and regulations thereunder, including the D Rules.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not offered
or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of the
Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities except in any such case
with ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.'s express written consent and then only at its own
risk and expense.
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ANNEX II
Pursuant to Section 7(d) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Securities Exchange
Act of 1934 (the "Exchange Act") and the applicable published rules and
regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the Offering
Circular comply as to form in all material respects with the applicable
requirements of the Exchange Act and the related published rules and
regulations;
(iii) 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 Offering Circular agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included in the Offering Circular, 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) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Offering Circular are not in conformity with generally
accepted accounting principles applied on the basis substantially
consistent with the basis for the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Offering Circular;
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(C) the unaudited financial statements which were not included
in the Offering Circular but from which were derived any unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in the
Offering Circular and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
consolidated financial statements included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form
in all material respects with the applicable accounting requirements or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest financial
statements included in the Offering Circular or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Offering
Circular except in each case for changes, increases or decreases which
the Offering Circular discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for decreases or
increases which the Offering Circular discloses have occurred or may
occur or which are described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs (iii)
and (iv) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which appear
in the Offering Circular, 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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