NORTH ATLANTIC TRADING ACQUISITION COMPANY, INC
$155,000,000
11% Senior Notes due 2004
PURCHASE AGREEMENT
June 18, 1997
NatWest Capital Markets Limited
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CIBC Wood Gundy Securities Corp.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
North Atlantic Trading Acquisition Company, Inc. a Delaware
corporation (the "Company"), and the subsidiary guarantors listed in Schedule 2
attached hereto (the "Guarantors") each hereby confirm its agreement with each
of you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$155,000,000 aggregate principal amount of its 11% Senior Notes due 2004
(collectively, with the guarantees defined below, the "Notes"). The Notes will
be guaranteed (the "Guarantees") by each of the Guarantors on a senior basis.
The Notes are to be issued under an indenture (the "Indenture") to be dated as
of June
15, 1997 by and among the Company and United States Trust Company, as trustee
(the "Trustee").
The Notes will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has
prepared a preliminary offering memorandum dated June 16, 1997 (the "Preliminary
Memorandum") and will prepare a final offering memorandum dated June 18, 1997
(the "Final Memorandum"; the Preliminary Memorandum and the Final Memorandum
each herein being referred to as a "Memorandum") setting forth or including a
description of the terms of the Notes, the terms of the offering of the Notes, a
description of the Company and the Guarantors and any material developments
relating to the Company and the Guarantors occurring after the date of the most
recent historical financial statements included therein.
The Company, the Guarantors and the Initial Purchasers will
enter into a Registration Rights Agreement (the "Registration Rights Agreement")
prior to or concurrently with the issuance of the Notes. Pursuant to the
Registration Rights Agreement, under the circumstances and the terms set forth
therein, the Company, the Guarantors will agree to file with the Securities and
Exchange Commission (the "Commission"): (i) a registration statement (the
"Exchange Offer Registration Statement"), relating to a registered Exchange
Offer (as defined in the Registration Rights Agreement) for the Notes under the
Act to offer to the holders of the Notes the opportunity to exchange their Notes
for an issue of notes substantially identical to the Notes that would be
registered under the Act (the "Exchange Notes") (except that (a) interest
thereon will accrue from the last date on which interest was paid on the Notes,
or if no such interest has been paid, from June 25, 1997, (b) such Notes will
not contain any restrictions on transfer, and (c) such Notes will not contain
provisions relating to an increase in their interest rate under certain
circumstances); or (ii) alternatively, in the event that applicable
interpretations of the Commission do not permit the Company to effect the
Exchange Offer or do not permit any holder of the Notes to participate in the
Exchange Offer, a shelf registration statement (the "Shelf Registration
Statement") to cover resales of Notes by such holders who satisfy certain
conditions relating to, including the provision of information in connection
with the Shelf Registration Statement.
2. Representations and Warranties. The Company and each
Guarantor represents and warrants to, and agrees, jointly and severally, with
each of the Initial Purchasers that:
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(a) Neither the Preliminary Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of
the date thereof and, in the case of the Final Memorandum and any
amendment or supplement thereto, at all times subsequent thereto up to
the Closing Date (as defined in Section 3 below) contained or shall
contain any untrue statement of a material fact or omitted 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,
except that the representations and warranties set forth in this
Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information furnished to the Company in
writing by the Initial Purchasers expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement
thereto.
(b) As of the Closing Date, the Company will have the
capitalization set forth in the Final Memorandum; the Guarantors
constitute all of the subsidiaries of the Company; the Company will own
one hundred percent of the issued and outstanding stock (or other
equity securities) of each Guarantor; all of the outstanding shares of
capital stock of the Company and the Guarantors as of the Closing Date
will be duly authorized and validly issued, are fully paid and
nonassessable (except with respect to the Company's stock to the extent
of loans outstanding to executive officers as described in the
Memorandum) and were not issued in violation of any preemptive or
similar rights (except to the extent that SGIC, as defined below,
alleges any such rights to arise out of its interest in LLC, as defined
below); except as set forth in the Final Memorandum and for any claim
that may be asserted by Societe Generale Investment Corporation
("SGIC") with respect to SGIC's interest in NTC Holding LLC ("LLC") as
described therein, there are no (i) options, warrants or other rights
to purchase from the Company and the Guarantors, (ii) agreements or
other obligations of the Company or any of the Guarantors to issue or
(iii) other rights to convert any obligation into, or exchange any
securities for, shares of capital stock of, or other equity securities
in, the Company or any of the Guarantors outstanding. The entities
listed on Schedule 2 hereto collectively (the "Subsidiaries") are the
only subsidiaries, direct or indirect, of the Company other than LLC.
Except as disclosed on Schedule 2, the Company does not own, directly
or indirectly, any capital stock or any other equity or long-term debt
securities or have any equity interest in any firm, partnership, joint
venture, limited liability company or other entity other than LLC in
which it owns all of the membership interests therein other than those
owned by SGIC.
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(c) The Company and each of National Tobacco Finance
Corporation and North Atlantic Operating Company, Inc. (the "Corporate
Subsidiaries") has been duly incorporated, is validly existing and is
in good standing as a corporation under the laws of its jurisdiction of
incorporation, with all requisite corporate power and authority to own
its properties and conduct its business as now conducted, and as
described in the Final Memorandum; National Tobacco, L.P. ("National
Tobacco") is a limited partnership duly organized and subsisting under
the laws of the State of Delaware, with the requisite partnership power
and authority to own its properties and conduct its business as now
conducted and as described in the Final Memorandum; LLC is a limited
liability company duly organized and subsisting under the laws of the
State of Delaware and does not have any assets except those that will
be transferred to the Company; the Company and each Guarantor is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or
in the aggregate, have a material adverse effect on the general
affairs, management, business, condition (financial or otherwise),
prospects or results of operations of the Company and the Guarantors,
taken as a whole (any such event, a "Material Adverse Effect").
(d) The Company and each Guarantor has all requisite corporate
or partnership power and authority, as the case may be, to execute,
deliver and perform its obligations under the Notes, including, in the
case of the Guarantors, the Guarantees, and the Exchange Notes. The
Notes, the Exchange Notes and the Guarantees will be duly and validly
authorized by the Company and each of the Guarantors prior to the
Closing and, when executed and delivered by the Company and each of the
Guarantors against payment therefor by the Initial Purchasers in
accordance with the terms of this Agreement (and assuming the due
authorization, execution and delivery of the Indenture by the Trustee
and the execution and delivery of certificates of authentication of the
Notes in the manner prescribed in the Indenture by one of the Trustee's
duly authorized officers) will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of
the Company and each of the Guarantors with respect to its obligations
thereunder, entitled to the benefits of the Indenture and enforceable
against the Company and each of the Guarantors in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of
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equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether a proceeding is sought at law
or in equity).
(e) The Company and each of the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Indenture. The Indenture will be duly and validly
authorized by the Company and each of the Guarantors prior to the
Closing and, when executed and delivered by the Company and each of the
Guarantors (assuming the due authorization, execution and delivery by
the Trustee), will constitute a valid and legally binding obligation of
the Company and each of the Guarantors with respect to its obligations
thereunder, enforceable against the Company and each of the Guarantors
in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether a proceeding is sought at law or in
equity).
(f) The Company and each of the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement. The Registration
Rights Agreement will be duly and validly authorized by the Company and
each of the Guarantors prior to the Closing and, when executed and
delivered by the Company and each of the Guarantors, will constitute a
valid and legally binding obligation of the Company and each of the
Guarantors with respect to its obligations thereunder, enforceable
against the Company and each of the Guarantors in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether a proceeding is sought at law or in equity) and except that
rights of indemnification and contribution thereunder may be limited by
Federal or state securities laws or public policy relating thereto.
(g) The Company and each of the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company and each of the
Guarantors .
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(h) No consent, approval, authorization or order of any court
or governmental agency or body or third party is required for the
execution, delivery or performance of this Agreement by the Company or
the consummation by the Company or any of the Guarantors of the
transactions contemplated hereby that are to be completed on or before
the Closing Date, except such as have been obtained or disclosed in the
Final Memorandum and such as may be required under state securities or
"Blue Sky" laws or foreign securities laws in connection with the
purchase and resale of the Notes by the Initial Purchasers. None of the
Company or any of the Guarantors is (i) in violation of its certificate
of incorporation or bylaws (or similar organizational document), (ii)
in breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective
properties or assets, or (iii) in breach of or in default under (nor
has any event occurred which, with notice or passage of time or both,
would constitute a default under) or in violation of any of the terms
or provisions of any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which any of
them is a party or to which any of them or their respective properties
or assets is subject (collectively, "Contracts") except in the case of
clauses (ii) and (iii) above such violations, breaches or defaults that
would not, individually or in the aggregate, have a Material Adverse
Effect.
(i) The execution, delivery and performance by the Company and
the Guarantors of this Agreement, the Indenture, and the Registration
Rights Agreement and the consummation by the Company and the Guarantors
of the transactions contemplated hereby and thereby, and the
fulfillment of the terms hereof and thereof, and the retention by the
Company of NatWest Capital Markets Limited ("NatWest") and CIBC Wood
Gundy Securities Corp., ("CIBC") pursuant to those certain letter
agreements (including the engagement and indemnity letter agreements)
dated as of May 19, 1997 (collectively, the "Engagement Letter") and
NatWest's and CIBC's acting as contemplated hereby and thereby, will
not conflict with or constitute or result in a breach of or a default
under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract except such conflicts, breaches, defaults or
violations, that would not, individually or in the aggregate, have a
Material Adverse Effect, (ii) the certificate of incorporation or
by-laws (or similar organizational document) of the Company or any of
the Guarantors, or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of
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the Initial Purchasers in Section 8 hereof) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of
the Guarantors or any of their respective properties or assets except
such conflicts, breaches, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
(j) The audited consolidated financial statements of the
entities included in the Preliminary Memorandum and the Final
Memorandum present fairly in all material respects the financial
position, results of operations and cash flows of such entities at the
dates and for the periods to which they relate and have been prepared
in accordance with generally accepted accounting principles applied on
a consistent basis except as otherwise stated therein. The summary and
selected financial and statistical data in the Preliminary Memorandum
and the Final Memorandum present fairly in all material respects the
information shown therein and have been prepared and compiled on a
basis consistent with the audited financial statements included
therein, except as otherwise stated therein. Coopers & ▇▇▇▇▇▇▇ L.L.P.
is an independent public accounting firm within the meaning of the Act
and the rules and regulations promulgated thereunder.
(k) The pro forma financial information included in the
Preliminary Memorandum and the Final Memorandum have been properly
computed on the bases described therein; the assumptions used in the
preparation of the pro forma financial data and other pro forma
financial information included in the Preliminary Memorandum and the
Final Memorandum are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein.
(l) There is not pending or, to the knowledge of the Company
and the Guarantors, threatened any action, suit, proceeding, inquiry,
investigation or legislative mandate to which the Company or any of the
Guarantors is a party, or to which the property or assets of the
Company or any of the Guarantors are subject, before or brought by any
court, arbitrator or governmental agency or body which are reasonably
likely to, individually or in the aggregate, have a Material Adverse
Effect or which seeks to restrain, enjoin, prevent the consummation of
or otherwise challenge the issuance or sale of the Notes to be sold
hereunder or the consummation of the other transactions described in
the Preliminary Memorandum and the Final Memorandum, including but not
limited the transactions described under the section "Transactions"
(the "Transactions").
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(m) Each of the Company and the Guarantors owns or possesses
adequate licenses or other rights to use all material patents,
trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by
it as described in the Preliminary Memorandum and the Final Memorandum,
except where the failure to own or possess the same would not,
individually or in the aggregate, have a Material Adverse Effect, and
none of the Company nor any of the Guarantors has received any notice
of infringement of or conflict with (or knows of any such infringement
of or conflict with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights or know-how
which, if such assertion of infringement or conflict were sustained,
would, individually or in the aggregate, have a Material Adverse
Effect.
(n) The Company and each of the Guarantors possesses all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals,
presently required or necessary to own or lease, as the case may be,
and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as described in the
Preliminary Memorandum and the Final Memorandum (collectively, the
"Permits"), except where the failure to obtain such Permits would not,
individually or in the aggregate, have a Material Adverse Effect.
(o) Since the date of the most recent financial statements
appearing in and the Final Memorandum, except as described therein, (i)
none of the Company nor the Guarantors has incurred any liabilities or
obligations, direct or contingent, or entered into or agreed to enter
into any transactions or contracts (written or oral) not in the
ordinary course of business which liabilities, obligations,
transactions or contracts would, individually or in the aggregate, be
material to the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the
Company and the Guarantors, either individually or taken as a whole (a
"Material Change"), (ii) none of the Company nor the Guarantors has
purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock and (iii) other than as described in the Final Memorandum, there
shall not have been any change in the capital stock or long-term
indebtedness of the Company or the Guarantors which would, individually
or in the aggregate, constitute a Material Change.
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(p) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
general affairs, management, business, condition, (financial or
otherwise), prospects or results of operations of the Company and the
Guarantors, either individually or taken as a whole, from that set
forth in the Preliminary Memorandum and the Final Memorandum.
(q) The Company and each of the Guarantors has filed all
necessary federal, state, local and foreign income and franchise tax
returns, and has paid all taxes shown as due thereon; and there is no
tax deficiency that has been asserted against the Company or any of the
Guarantors other than tax deficiencies which the Company or any
Guarantor is contesting in good faith and for which the Company or such
Guarantor has provided adequate reserves.
(r) The statistical and market-related data included in the
Final Memorandum are based on or derived from sources which the Company
and the Guarantors believe to be reliable and accurate.
(s) None of the Company, the Guarantors nor any agent acting
on their behalf has taken or will take any action that might cause this
Agreement or the sale of the Notes to violate Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System, in each case
as in effect, or as the same may hereafter be in effect, on the Closing
Date.
(t) Each of the Company and the Guarantors has good and
marketable title to all real property and good title to all personal
property described in the Preliminary Memorandum and the Final
Memorandum as being owned by it and good and marketable title to any
leasehold estate in the real and personal property described in the
Preliminary Memorandum and the Final Memorandum as being leased by it
free and clear of all liens, charges, encumbrances or restrictions,
except as described in the Preliminary Memorandum and the Final
Memorandum or to the extent the failure to have such title or the
existence of such liens, charges, encumbrances or restrictions would
not, individually or in the aggregate, have a Material Adverse Effect.
(u) There are no legal or governmental proceedings involving
or affecting the Company or any Guarantor or any of their respective
properties or assets which would be required to be described in a
prospectus forming part of a registration statement filed with the
Commission pursuant to the Act
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that are not described in the Preliminary Memorandum and the Final
Memorandum.
(v) Except as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect (A) each of the
Company and the Guarantors is in compliance with and not subject to
liability under applicable Environmental Laws (as defined below), (B)
each of the Company and the Guarantors has made all filings and
provided all notices required under any applicable Environmental Laws,
and has and is in compliance with all Permits required under any
applicable Environmental Laws and each of them is in full force and
effect, (C) there is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the
knowledge of the Company or any of the Guarantors, threatened against
the Company or any of the Guarantors under any Environmental Law, (D)
no lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property
owned, operated, leased or controlled by the Company or any of the
Guarantors, (E) none of the Company or the Guarantors has received
notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA") or any comparable state
law, (F) no property or facility of the Company or any of the
Guarantors is (i) listed or proposed for listing on the National
Priorities List under CERCLA or is (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by
any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, law relating to (i) emissions,
discharges, releases or threatened releases of hazardous materials,
into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), (ii)
the manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of hazardous materials, and
(iii) underground and above ground storage tanks, and related piping,
and emissions, discharges, releases or threatened releases therefrom.
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(w) There is no strike, labor dispute, slowdown or work
stoppage with the employees of the Company or any of the Guarantors
which is pending or, to the knowledge of the Company or any of the
Guarantors, threatened.
(x) Except for the risks described under "Extensive and
Increasing Regulation of Products", "Tobacco Industry Product Liability
Litigation" and "Possible National Settlement of Tobacco Liability
Claims" in "Risk Factors" in the Final Memorandum, each of the Company
and the Guarantors carries insurance in such amounts and covering such
risks as is adequate for the conduct of its business and the value of
its properties. Neither the Company nor any of the Guarantors has
received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made
in order to continue such insurance.
(y) None of the Company nor the Guarantors has any material
liability for any prohibited transaction (within the meaning of Section
4975(c) of the Internal Revenue Code of 1986, as amended (the "Code")
or Part 4 of Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (or an accumulated funding deficiency
within the meaning of Section 412 of the Code or Section 302 of ERISA)
or any complete or partial withdrawal liability (within the meaning of
Section 4201 of ERISA) with respect to any pension, profit sharing or
other plan which is subject to ERISA, to which the Company or any of
the Subsidiaries makes or ever has made a contribution and in which any
employee of the Company or of any Subsidiary is or has ever been a
participant. With respect to such plans, the Company and each
Subsidiary is in compliance in all material respects with all
applicable provisions of ERISA.
(z) The Company and each of the Guarantors (i) makes and keeps
accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its
financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(aa) None of the Company or the Guarantors will be an
"investment company" or "promoter" or "principal underwriter" for an
"investment
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company," as such terms are defined in the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
(bb) The Notes, the Exchange Notes, the Indenture and the
Registration Rights Agreement will conform in all material respects to
the descriptions thereof in the Final Memorandum.
(cc) No holder of securities of the Company nor any of the
Guarantors will be entitled to have such securities registered under
the registration statements required to be filed by the Company
pursuant to the Registration Rights Agreement other than as expressly
permitted thereby.
(dd) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair
saleable value of the assets of each of the Company and the Guarantors
(each on a consolidated basis) will exceed the sum of its stated
liabilities and identified contingent liabilities; none of the Company
or the Guarantors (each on a consolidated basis) is, nor will any of
the Company or the Guarantors (each on a consolidated basis) be, after
giving effect to the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, (a) left with unreasonably small capital with which to carry on
its business as it is currently or proposed to be conducted, (b) unable
to pay its debts (contingent or otherwise) as they mature or otherwise
become due or (c) otherwise insolvent.
(ee) None of the Company, the Guarantors or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Act) has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any "security" (as defined in the Act) which is or could be integrated
with the sale of the Notes in a manner that would require the
registration under the Act of the Notes or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the
Notes or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. The Company has not distributed and will
not distribute any offering material in connection with the Offering
other than the Final Memorandum and any Preliminary Memorandum. No
securities of the same class as the Notes have been issued and sold by
the Company within the six-month period immediately prior to the date
hereof.
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(ff) Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof, it is not
necessary in connection with the offer, sale and delivery of the Notes
to the Initial Purchasers in the manner contemplated by this Agreement
to register any of the Notes under the Act or to qualify the Indenture
under the TIA.
(gg) No securities of the Company or any Subsidiary are of the
same class (within the meaning of Rule 144A as promulgated under the
Act ("Rule 144A")) as the Notes and listed on a national securities
exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or quoted in a U.S. automated
inter-dealer quotation system.
(hh) None of the Company or the Guarantors has taken, nor will
any of them take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in stabilization
or manipulation of the price of the Notes.
(ii) None of the Company or the Guarantors, or any person
acting on any of their behalf (other than the Initial Purchasers) has
engaged in any directed selling efforts (as that term is defined in
Regulation S under the Act ("Regulation S")) with respect to the Notes;
the Company and its respective Affiliates and any person acting on any
of their behalf (other than the Initial Purchasers or any Affiliate of
the Initial Purchasers) have complied with the offering restrictions
requirement of Regulation S.
(jj) Each of the Preliminary Memorandum and the Final
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Notes, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Act.
(kk) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(ll) Neither the Company nor any of the Guarantors nor, to the
Company's knowledge, any officer or director purporting to act on
behalf of the Company or any of the Guarantors has at any time: (i)
made any contributions to any candidate for political office, or failed
to disclose fully any such contributions, in violation of law, (ii)
made any payment of funds to, or received or retained any funds from,
any state, federal or foreign
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governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or allowed
by applicable law, (iii) violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977, (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment
or (v) engaged in any transaction, maintained any bank account or used
any corporate funds except for transaction, bank accounts and funds
which have been and are reflected in the normally maintained books and
records of the Company and the Guarantors.
(mm) Except as disclosed in any Memorandum, there are no
material outstanding loans or advances or material guarantees of
indebtedness by the Company or any of its Guarantors to or for the
benefit of any of the officers or directors of the Company or any of
its Guarantors or any of the members of the families of any of them.
(nn) Neither the Company nor any affiliate of the Company does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Florida Statutes Section 517.075.
(oo) None of the Company nor the Guarantors has engaged or
retained any person, other than NatWest and CIBC, as the Initial
Purchasers, to act as a financial advisor, underwriter or placement
agent in connection with the issuance of the Notes and, except for the
fees and expenses payable in connection with the issuance of the Notes
as described in the Final Memorandum and the advisory fees payable to
UBS Securities LLC, no person has the right to receive a material
amount of financial advisory, underwriting, placement, finder's or
similar fees in connection with, or as a result of, the issuance of the
Notes and the purchase of the Notes by the Initial Purchasers or the
consummation of the other transactions contemplated hereby.
Any certificate signed by any officer of the Company or any
Guarantor and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a joint and several representation and warranty by
the Company and each of the Guarantors to the Initial Purchasers as to the
matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to
-14-
each of the Initial Purchasers, and each of the Initial Purchasers agrees,
severally and not jointly, to purchase from the Company the principal amount of
Notes set forth opposite its name on Schedule 1 hereto at 96.75% of their
principal amount. One or more certificates in definitive form for the Notes that
each of the Initial Purchasers has agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as each of
the Initial Purchasers requests upon notice to the Company at least 48 hours
prior to the Closing Date, shall be delivered by or on behalf of the Company to
each of the Initial Purchasers, against payment by or on behalf of such Initial
Purchaser of the purchase price therefor by wire transfer to such account or
accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such delivery
of and payment for the Notes shall be made at the offices of Weil, Gotshal &
▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ at 10:00 A.M., New York time, on
June 25, 1997, or at such other place, time or date as the Initial Purchasers,
on the one hand, and the Company, on the other hand, may agree upon, such time
and date of delivery against payment being herein referred to as the "Closing
Date." The Company will make such certificate or certificates for the Notes
available for inspection and packaging by the Initial Purchasers at such place
as designated by the Initial Purchasers at least 24 hours prior to the Closing
Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company and the Guarantors. Each of the
Company and the Guarantors, jointly and severally, covenants and agrees with the
Initial Purchasers that:
(a) The Company and the Guarantors will not amend or
supplement the Final Memorandum or any amendment or supplement thereto
of which the Initial Purchasers shall not previously have been advised
and furnished a copy for a reasonable period of time prior to the
proposed amendment or supplement and as to which the Initial Purchasers
shall not have consented. The Company and the Guarantors will promptly,
upon the reasonable request of the Initial Purchasers or counsel for
the Initial Purchasers, make any amendments or supplements to the Final
Memorandum that may be necessary or advisable in connection with the
resale of the Notes by the Initial Purchasers.
-15-
(b) The Company and the Guarantors will cooperate with the
Initial Purchasers in arranging for the qualification of the Notes for
offering and sale under the securities or "Blue Sky" laws of which
jurisdictions as the Initial Purchasers may designate and will continue
such qualifications in effect for as long as may be necessary to
complete the resale of the Notes; provided, however, that in connection
therewith, none of the Company nor any Guarantor shall be required to
qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is
not then so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes, any event occurs
or information becomes known as a result of which the Final Memorandum
as then amended or supplemented would, in the judgment of the Company,
the Guarantors or in the reasonable opinion of counsel for the Initial
Purchasers include any untrue statement of a material fact, or omit 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 if for any other reason it is necessary at any time to amend or
supplement the Final Memorandum to comply with applicable law, the
Company and the Guarantors will promptly notify the Initial Purchasers
thereof and will prepare, at the expense of the Company and the
Guarantors, an amendment or supplement to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Company and the Guarantors will, without charge,
provide to the Initial Purchasers and to counsel for the Initial
Purchasers as many copies of the Preliminary Memorandum and the Final
Memorandum or any amendment or supplement thereto as the Initial
Purchasers may reasonably request.
(e) The Company and the Guarantors will apply the net proceeds
from the sale of the Notes substantially as set forth under "Use of
Proceeds" in the Final Memorandum.
(f) From the Closing Date until the date that no Notes are
outstanding under the Indenture, the Company and the Guarantors will
furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Company to the
Trustee or the holders of the Notes and, as soon as available, copies
of any reports or financial statements furnished to or filed by the
Company or any Guarantors
-16-
with the Commission or any national securities exchange on which any
class of securities of the Company or any Guarantors may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared, a copy of any
unaudited interim financial statements of the Company and the
Guarantors for any period subsequent to the period covered by the most
recent financial statements appearing in the Final Memorandum.
(h) None of the Company, the Guarantors or any of their
Affiliates will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as defined in the
Act) which could be integrated with the sale of the Notes in a manner
which would require the registration under the Act of the Notes.
(i) None of the Company nor the Guarantors will engage in any
form of "general solicitation" or "general advertising" (as those terms
are used in Regulation D under the Act) in connection with the offering
of the Notes or in any manner involving a public offering of the Notes
within the meaning of Section 4(2) of the Act.
(j) None of the Company, the Guarantors nor their Affiliates
nor any person acting on its or their behalf to engage, in any directed
selling efforts (as that term is defined in Regulation S) with respect
to the Notes, and to comply, and to have its Affiliates and each person
acting on its or their behalf comply, with the offering restrictions
requirements of Regulation S.
(k) For so long as any of the Notes remain outstanding, the
Company and the Guarantor will make available, upon request, to any
seller of such Notes the information specified in Rule 144A(d)(4) under
the Act, unless the Company and the Guarantor are then subject to
Section 13 or 15(d) of the Exchange Act.
(l) For a period of 180 days from the date of the Final
Memorandum, the Company and the Guarantor will not offer for sale,
sell, contract to sell or otherwise dispose of, directly or indirectly,
or file a registration statement for, or announce any offer, sale,
contract for sale of or other disposition of any debt securities issued
or guaranteed by the Company or any of the Guarantors (other than the
Notes or the Exchange Notes) without the prior written consent of the
Initial Purchasers.
-17-
(m) During the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the
Initial Purchasers, the Company and the Guarantors will not, and will
not permit any of their affiliates (as defined in Rule 144 under the
Act) to, resell any of the Notes that have been reacquired by them,
except for Notes purchased by the Company or any of its affiliates and
resold in a transaction registered under the Act.
(n) In connection with the offering of the Notes, until the
Initial Purchasers shall have notified the Company of the completion of
the resale of the Notes, the Company and the Guarantors will not, and
will cause their affiliated purchasers (as defined in the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Notes, or attempt to induce
any person to purchase any Notes; and not to, and to cause its
affiliated purchasers not to, make bids or purchase for the purpose of
creating actual, or apparent, active trading in or of raising the price
of the Notes.
(o) Except as contemplated in the Final Memorandum, the
Company and the Guarantors will not take any action prior to the
execution and delivery of the Indenture which, if taken after such
execution and delivery, would have violated any of the covenants
contained in the Indenture.
(p) The Company and the Guarantors will not take any action
prior to Closing Date which would require the Final Memorandum to be
amended or supplemented pursuant to Section 5(c) hereof.
(q) Prior to the Closing Date, the Company and the Guarantors
will not issue any press release or other communication directly or
indirectly or hold any press conference with respect to the Company or
the Guarantors or the condition, financial or otherwise of any of them,
or earnings, business affairs or business prospects (except for routine
oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the
Initial Purchasers is notified), without the prior written consent of
the Initial Purchasers, unless in the judgment of the Company and its
counsel, after notification to the Initial Purchasers, such press
release or communication is required by law.
-18-
(r) The Company will use its best efforts to (i) permit the
Notes to be designated PORTAL securities in accordance with the rules
and regulations adopted by the NASD relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"Portal Market") and (ii) permit the Notes to be eligible for clearance
and settlement through the Depository Trust Company ("DTC").
6. Expenses. The Company and the Guarantors agree, jointly and
severally, to pay all costs and expenses incident to the performance of their
obligations under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to Section 11
hereof, including all costs and expenses incident to (i) the printing, word
processing or other production of documents with respect to the transactions
contemplated hereby, including any costs of printing the Preliminary Memorandum
and the Final Memorandum and any amendment or supplement thereto, and any "Blue
Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of counsel, accountants and any other experts or advisors retained
by the Company, (iv) preparation (including printing), issuance and delivery to
the Initial Purchasers of the Notes, (v) the qualification of the Notes under
state securities and "Blue Sky" laws, including filing fees and reasonable fees
and disbursements of counsel for the Initial Purchasers relating thereto, (vi)
expenses in connection with any meetings with prospective investors in the
Notes, (vii) fees and expenses of the Trustee (including fees and expenses of
counsel), (viii) all expenses and listing fees incurred in connection with the
application for quotation of the Notes on the PORTAL Market and the approval of
the Notes for book-entry transfer by DTC, and (ix) any fees charged by
investment rating agencies for the rating of the Notes. If the sale of the Notes
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated or because of any failure, refusal or
inability on the part of the Company or any Guarantor to perform all obligations
and satisfy all conditions on their part to be performed or satisfied hereunder
(other than solely by reason of a default by the Initial Purchasers of their
obligations hereunder after all conditions hereunder have been satisfied in
accordance herewith), the Company agrees to promptly reimburse the Initial
Purchasers upon demand for all out-of-pocket expenses (including all reasonable
fees, disbursements and charges of White & Case) that shall have been incurred
by the Initial Purchasers in connection with the proposed purchase and sale of
the Notes.
-19-
7. Conditions of the Initial Purchasers's Obligations. The
obligation of the Initial Purchasers to purchase and pay for the Notes shall, in
its sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have
received the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the Company, in form and
substance satisfactory for counsel to the Initial Purchasers, dated the Closing
Date, substantially to the effect that:
(i) the Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware. Each of the Corporate Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of
the State of Delaware. National Tobacco is a limited partnership duly
organized and subsisting under the laws of the State of Delaware. Each
of the Company and the Corporate Subsidiaries has all requisite
corporate power and authority to own its properties and to conduct its
business as described in the Final Memorandum. National Tobacco has all
requisite partnership power and authority to own its property and to
conduct its business as described in the Final Memorandum;
(ii) all of the outstanding shares of capital stock
of the Company and each of the Corporate Subsidiaries and the
partnership interests in National Tobacco are duly authorized, validly
issued, fully paid and nonassessable (except, with respect to the
Company, to the extent of loans outstanding to executive officers as
described in the Final Memorandum) and were not issued in violation of
any preemptive or similar rights other than any rights of SGIC with
respect to or arising out of SGIC's interest in LLC as to which no
opinion is expressed. Except as set forth in the Final Memorandum, all
of the outstanding shares of capital stock of each of the Corporate
Subsidiaries and the partnership interests in National Tobacco are
owned of record and, to such counsel's knowledge, beneficially, by the
Company or, in the case of National Tobacco, a Subsidiary, free and
clear, to our knowledge, of all liens, security interests, encumbrances
or claims;
(iii) Except as set forth in the Final Memorandum,
(A) no options, warrants or other rights to purchase from the Company
or any Guarantor shares of capital stock or equity interests in the
Company or any Guarantor are outstanding, (B) no agreements or other
obligations of the Company or any Guarantor to issue, or other rights
to cause the Company or
-20-
any Guarantor to convert, any obligation into, or exchange any
securities for, shares of capital stock or ownership interests in the
Company or any Guarantor are outstanding and (C) no holder of
securities of the Company or any Guarantor is entitled to have such
securities registered under a registration statement filed by the
Company and the Guarantor pursuant to the Registration Rights Agreement
in each case other than rights of SGIC with respect to or arising out
of its interest in LLC, as to which no opinion is expressed;
(iv) the Indenture has been duly authorized by the
Company and each Guarantor and, when executed and delivered by the
Company and each Guarantor (assuming the due authorization, execution
and delivery thereof by the Trustee), will constitute the legal, valid
and binding obligation of the Company and each Guarantor with respect
to its obligations thereunder, enforceable against the Company and each
Guarantor in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether a proceeding is sought at law
or in equity); the Notes have been duly authorized by the Company and,
when issued and delivered against payment therefor by the Initial
Purchasers (and assuming the due authorization, execution and delivery
of the Indenture by the Trustee and the execution and delivery of
certificates of authentication of the Notes in the manner prescribed by
the Indenture by one of the Trustee's duly authorized officers), will
be duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether a proceeding is sought at law
or in equity);
(v) The Exchange Notes have been duly and validly
authorized by the Company and each Guarantor, and when the Exchange
Notes have been duly executed and delivered by the Company and each
Guarantor in accordance with the terms of the Registration Rights
Agreement and the Indenture (assuming the due authorization, execution
and delivery of the Indenture by the Trustee and due authentication and
delivery of the
-21-
Exchange Notes and by the Trustee in accordance with the Indenture),
will constitute the valid and legally binding obligations of the
Company and each Guarantor, entitled to the benefits of the Indenture
and enforceable against the Company and each Guarantor in accordance
with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether a proceeding is sought at law or in equity);
(vi) the Registration Rights Agreement has been duly
authorized by the Company and each Guarantor and, when validly executed
and delivered by the Company and each Guarantor, will constitute a
valid and legally binding obligation of the Company and each Guarantor
with respect to its obligations thereunder and will be enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith
and fair dealing (regardless of whether a proceeding is sought at law
or in equity) and except that rights of indemnification and
contribution thereunder may be limited by federal or state securities
laws or public policy relating thereto;
(vii) the Company and each Guarantor has all
requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations thereunder; the execution,
delivery and performance of this Agreement by the Company and the
consummation by the Company and each Guarantor of the transactions
contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company and each Guarantor; this
Agreement has been duly authorized, executed and delivered by the
Company and each Guarantor;
(viii) the statements in the Final Memorandum under
the caption "Description of Notes" and "Exchange Offer Registration
Rights," insofar as they describe the provisions of the documents and
instruments therein described, constitute fair summaries thereof
accurate in all material respects;
(ix) to the knowledge of such counsel, there is no
action, suit or proceeding pending before or threatened by any court
or public
-22-
governmental authority or arbitrator involving the Company or any of
its Subsidiaries of a character required to be disclosed in the Final
Memorandum which is not adequately disclosed or incorporated by
reference in the Final Memorandum or which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale
of the Notes to be sold hereunder or the consummation of the other
transactions described in the Final Memorandum under the caption "Use
of Proceeds", except that no opinion is expressed with respect to any
threat of SGIC with respect to or arising out of its interest in LLC.
(x) neither the Company nor any of the Guarantors is
or immediately after the sale of the Notes to be sold hereunder and the
application of the proceeds from such sale (as described in the Final
Memorandum under the caption "Use of Proceeds") an "investment company"
within the meaning of, and is not registered or otherwise required to
be registered under, the Investment Company Act of 1940, as amended;
(xi) no consent, approval, waiver, license, permit,
authorization or other action by or filing with any New York, Delaware
corporate or United States governmental authority is required in
connection with the issuance and sale by the Company to the Initial
Purchasers on the Closing Date of the Notes, the consummation by the
Company and the Guarantors of the transactions contemplated by this
Agreement, the Indenture or the Registration Rights Agreement, except
for (i) state securities or "blue sky" laws, rules or regulations, (ii)
with respect to the Registration Rights Agreement only, filings and
other actions required pursuant to the Securities Act, the Exchange
Act, the Trust Indenture Act of 1939 as amended, and the rules and
regulations of the Commission promulgated thereunder, and (iii) filings
with the Bureau of Alcohol, Tobacco and Firearms, as to all of which we
express no opinion, and those consents, approvals, waivers, licenses,
permits or authorizations which have heretofore been obtained;
(xii) neither the issuance and sale by the Company of
the Notes pursuant to this Agreement, the execution and delivery of
this Agreement, the Indenture or the Registration Rights Agreement, the
compliance by the Company or the Guarantors, as applicable, with the
terms and provisions thereof, or the consummation by the Company or the
Guarantors of any of the transactions contemplated thereby, will
conflict with, constitute a default under, or violate (i) any of the
terms, conditions or provisions of the certificate of incorporation or
by-laws of the Company or any of the Guarantors, (ii) any New York,
Delaware corporate or United
-23-
States federal law or regulation (other than United States federal and
state securities or "blue sky" laws, rules and regulations or laws,
rules and regulations administered by the Bureau of Alcohol, Tobacco
and Firearms, as to which such counsel need not express any opinion in
this paragraph), or (iii) any judgment, writ, injunction, decree or
order of any court or governmental authority binding on the Company or
any of the Guarantors of which such counsel is aware;
(xiii) No registration under the Act of the Notes is
required in connection with the sale of the Notes to the Initial
Purchasers or the resale of the Units by the Initial Purchasers in the
manner contemplated by this Agreement and the Final Memorandum.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
State of New York or the United States or the corporation law of the State of
Delaware, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Purchasers and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials.
In addition to the foregoing, such counsel shall state that is
has participated in conferences with directors, executive officers and other
representatives of the Company, representatives of the Company's independent
public accountants, at which conferences the contents of the Final Memorandum
and relating matters were discussed, and although such counsel has not
independently verified and has not passed upon or assumed any responsibility for
the accuracy, completeness or fairness of the statements contained in such
documents, no facts have come to such counsel's attention to lead it to believe
that the Final Memorandum and any further amendments or supplements thereto as
of their respective dates and on the date of such opinion letter contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein, or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel need not express any view with
respect to the financial statements and related notes, the financial statement
schedules and the other financial, statistical and accounting data included in
the Final Memorandum).The opinion of ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP described in this
Section shall be rendered to the Initial Purchasers at the request of the
Company and shall so state therein.
-24-
References to the Final Memorandum in this subsection (a) shall include
any amendment or supplement thereto prepared in accordance with the provisions
of this Agreement on or before the Closing Date.
(b) On the Closing Date, the Initial Purchasers shall have received the
opinion, in form and substance satisfactory to the Initial Purchasers, dated as
of the Closing Date and addressed to the Initial Purchasers, of White & Case
counsel for the Initial Purchasers, with respect to certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchasers may reasonably require. In rendering such opinion, White & Case shall
have received and may rely upon such certificates and other documents and
information as it may reasonably request to pass upon such matters.
(c) The Initial Purchasers shall have received from Coopers & ▇▇▇▇▇▇▇
L.L.P. comfort letters dated the date hereof and the Closing Date, in form and
substance satisfactory to counsel for the Initial Purchasers.
(d) The representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date; the statements of the Company's or any Guarantors' officers made
pursuant to any certificate delivered in accordance with the provisions hereof
shall be true and correct on and as of the date made and on and as of the
Closing Date; the Company and the Guarantors shall have performed all covenants
and agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date; and, except as described in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), subsequent to the date of the most recent financial statements in
such Final Memorandum, there shall have been no event or development that,
individually or in the aggregate, has had, or would be reasonably likely to
have, a Material Adverse Effect.
(e) The sale of the Notes hereunder shall not be enjoined (temporarily
or permanently) on the Closing Date.
(f) The Notes shall have been approved by the NASD for trading in the
PORTAL Market.
(g) There shall not have occurred any invalidation of Rule 144A under
the Act by any court or any withdrawal or proposed withdrawal of any rule or
regulation under the Act or the Exchange Act by the Commission or any amendment
or proposed amendment thereof by the Commission which in the judgment of the
-25-
Initial Purchasers would materially impair the ability of the Initial Purchasers
to purchase, hold or effect resales of the Notes as contemplated hereby.
(h) There shall not have occurred any change, or any development
involving a prospective change, in the general business affairs, condition
(financial or otherwise), prospects or results of operations, of the Company and
the Guarantors, taken as a whole, from that set forth in the Final Memorandum
that constitutes a Material Adverse Effect and that makes it, in the Initial
Purchasers' judgment, impracticable to market the Notes on the terms and in the
manner contemplated in the Final Memorandum.
(i) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), the conduct of the business and operations of the Company and the
Guarantor shall not have been interfered with by strike, fire, flood, hurricane,
accident or other calamity (whether or not insured) or by any court or
governmental action, order or decree, and, except as otherwise stated therein,
the properties of the Company and the Guarantor shall not have sustained any
loss or damage (whether or not insured) as a result of any such occurrence,
except any such interference, loss or damage which would not, individually or in
the aggregate, have a Material Adverse Effect.
(j) No securities of the Company or any Guarantor shall have been
downgraded or placed on any "watch list" for possible downgrading by any
nationally recognized statistical rating organization.
(k) The Initial Purchasers shall have received certificates of the
Company and each Guarantor, dated the Closing Date, signed by their President
and the Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Company and such
Guarantor contained in this Agreement are true and correct as of the date hereof
and as of the Closing Date, and the Company and each Guarantor has performed all
covenants and agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final
Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), no event or events have occurred, no information has
become known nor does
-26-
any condition exist that, individually or in the aggregate, has had,
or could be reasonably be expected to have, a Material Adverse Effect;
(iii) The sale of the Notes hereunder has
not been enjoined (temporarily or permanently);
(iv) The transactions described in the Final
Memorandum entitled "The Transactions" have been consummated on
substantially the terms described in the Final Memorandum; and
(v) Such other information as the Initial
Purchasers may reasonably request.
(l) On the Closing Date, the Initial Purchasers shall have received the
Registration Rights Agreement executed by the Company and the Guarantors and
such agreement shall be in full force and effect at all times pursuant to its
terms.
(m) On the Closing Date, each of the transactions described in the
section of the Memorandum entitled "The Transactions" shall have been
consummated on a basis satisfactory to the Initial Purchasers.
(n) On the Closing Date, the Distribution Agreements (as such term is
defined in the Memorandum) shall be in full force and effect and no party
thereto shall have been in breach thereof.
(o) On the Closing Date, the Lancaster Agreement (as such term is
defined in the Memorandum) shall be in full force and effect and no party
thereto shall have been neither the Company nor any Guarantor will be in breach
thereof.
(p) The conditions to the purchase and sale of the Company's Units by
NatWest Capital Markets Limited ("NatWest") as set forth in the Purchase
Agreement dated the date hereof between the Company and NatWest shall have been
satisfied and such Agreement shall not have been terminated.
On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such further documents,
opinions, certificates, letters and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company and the
Guarantors as they shall have heretofore reasonably requested from the Company
and the Guarantors.
-27-
All such documents, opinions, certificates, letters, schedules
or instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchasers and counsel for the Initial Purchasers. The
Company and the Guarantors shall furnish to the Initial Purchasers such
conformed copies of such documents, opinions, certificates, letters, schedules
and instruments in such quantities as the Initial Purchasers shall reasonably
request.
8. Offering of Notes; Restrictions on Transfer. Each of the
Initial Purchasers agree with the Company (severally and not jointly) that (i)
they have not and will not solicit offers for, or offer or sell, the Notes by
any form of general solicitation or general advertising (as those terms are used
in Regulation D under the Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act; and (ii) they have and will
solicit offers for the Notes only from, and will offer the Notes only to (A) in
the case of offers inside the United States, (x) persons whom the Initial
Purchasers reasonably believe to be QIBs or, if any such person is buying for
one or more institutional accounts for which such person is acting as fiduciary
or agent, only when such person has represented to the Initial Purchasers that
each such account is a QIB, to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A or (y) a limited number of other institutional
investors reasonably believed by the Initial Purchasers to be Accredited
Investors that, prior to their purchase of the Notes, deliver to the Initial
Purchasers a letter containing the representations and agreements set forth in
Appendix A to the Final Memorandum and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign purchasers," which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)); provided, however, that, in the case of this clause (B),
in purchasing such Notes such persons are deemed to have represented and agreed
as provided under the caption "Transfer Restrictions" contained in the Final
Memorandum.
Each of the Initial Purchasers represent and warrant
(severally and not jointly) that they are QIBs, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Notes. Each of the Initial
Purchasers agree (severally and not jointly) to comply with the applicable
provisions of Rule 144A and Regulation S under the Act. Each of the Initial
Purchasers hereby acknowledge that the Company and the Guarantors and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 7(a) hereof, counsel to the Company and the
-28-
Guarantors will rely upon the accuracy and truth of the representations
contained in this Section 8 and each of the Initial Purchasers hereby consent to
such reliance.
9. Indemnification and Contribution. (a) The Company and the
Guarantors jointly and severally agree to indemnify and hold harmless the
Initial Purchasers and the affiliates, directors, officers, agents,
representatives general partners and employees of such Initial Purchasers or
their affiliates, and each other person, if any, who controls either of the
Initial Purchasers or its affiliates within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, to the full extent lawful against any losses,
claims, damages, expenses or liabilities (or actions in respect thereof,
including, without, limitation, shareholder derivative actions and arbitration
proceedings) to which any Initial Purchasers or such other person may become
subject under the Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or
supplement thereto or any application or other document, or any
amendment or supplement thereto, executed by the Company or any
Guarantor or based upon written information furnished by or on behalf
of the Company or any Guarantor filed in any jurisdiction in order to
qualify the Notes under the securities or "Blue Sky" laws thereof or
filed with any securities association or securities exchange (each an
"Application");
(ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto or any Application, a
material fact required to be stated therein or necessary to make the
statements therein not misleading; or
(iii) any breach of any of the representations and warranties
of the Company and the Guarantors set forth in this Agreement or the
Registration Rights Agreement,
and will reimburse, as incurred, the Initial Purchasers and each such other
person for any reasonable legal or other expenses incurred by the Initial
Purchasers or such other person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, the Company and the
Guarantors will not be liable in any such case to the extent that any such loss,
claim, damage, or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or
-29-
alleged omission made in any Memorandum or any amendment or supplement thereto
or any Application in reliance upon and in conformity with written information
furnished to the Company by an Initial Purchasers specifically for use therein
and, provided, further, that with respect to any untrue statement or alleged
untrue statement in or omission or alleged omission from the Preliminary
Memorandum, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Initial Purchaser that sold the Notes concerned to
the person asserting any such losses, claims, damages or liabilities, to the
extent that such sale was an initial resale by such Initial Purchaser and any
such loss, claim, damage or liability of such Initial Purchaser results from the
fact that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Notes to such person, a copy of the Final
Memorandum (exclusive of any material included therein but not attached thereto)
if the Company had previously furnished copies thereof to such Initial
Purchaser. This indemnity agreement will be in addition to any liabilities or
obligations that the Company and the Guarantors may otherwise have to the
indemnified parties, including without limitation the indemnification
obligations of the Company pursuant to the Engagement Letter. Subject to Section
9(c), the Company and the Guarantors shall not be liable under this Section 9
for any settlement of any claim or action effected without their prior consent,
which shall not be unreasonably withheld. The Initial Purchasers shall not,
without prior written consent of the Company and the Guarantors, effect any
settlement or compromise of any pending or threatened proceeding in respect of
which the Initial Purchasers is or could have been a party, or indemnity could
have been sought hereunder by any Initial Purchasers, unless such settlement (A)
includes an unconditional written release of the Company and the Guarantors, in
form and substance reasonably satisfactory to the Company and the Guarantors,
from all liability on claims that are the subject matter of such proceeding and
(B) does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of the Company and the Guarantors.
(b) The Initial Purchasers, severally and not jointly, agree
to indemnify and hold harmless the Company and the Guarantors, their directors,
their officers and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Memorandum or any amendment or supplement thereto or any Application, or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated in any Memorandum or any
-30-
amendment or supplement thereto or any Application, or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or the Guarantors by the Initial Purchasers
specifically for use therein; and subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any reasonable
legal or other expenses incurred by the Company, or any such director, officer
or controlling person in connection with investigating or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action in respect thereof. This indemnity agreement will be
in addition to any liability that the Initial Purchasers may otherwise have to
the indemnified parties. Subject to Section 9(c), the Initial Purchasers shall
not be liable under this Section 9 for any settlement of any claim or action
effected without their written consent, which shall not be unreasonably
withheld. The Company and the Guarantors shall not, without the prior written
consent of the Initial Purchasers, effect any settlement or compromise of any
pending or threatened proceeding in respect of which the Initial Purchasers is
or could have been a party, or indemnity could have been sought hereunder by any
Initial Purchasers, unless such settlement (A) includes an unconditional written
release of the Initial Purchasers, in form and substance reasonably satisfactory
to the Initial Purchasers, from all liability on claims that are the subject
matter of such proceeding and (B) does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of the Initial
Purchasers.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the
-31-
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, or (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after receipt by the indemnifying
party of notice of the institution of such action, then, in each such case, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 9 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that in connection with such
action the indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances designated by the Initial
Purchasers in the case of paragraph (a) of this Section 9 or either the Company
or any of the Guarantors in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party, unless such indemnified party waived in writing its rights
under this Section 9, in which case the indemnified party may effect such a
settlement without such consent.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 9 is unavailable to an
indemnified party in respect of any losses, claims, damages or liabilities (or
actions in respect thereof), each indemnifying party, in order to provide for
just and equitable contribution, 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 (i) the relative benefits received by the
-32-
indemnifying party or parties on the one hand and the indemnified party on the
other from the offering of the Notes or (ii) if the allocation provided by the
foregoing clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions or breaches that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Company and the Guarantors on
the one hand and the Initial Purchasers on the other shall be deemed to be in
the same proportion as the total proceeds from the offering (net of commissions
and before deducting expenses) received by the Company and the Guarantors bear
to the total discounts and commissions received by the Initial Purchasers. The
relative fault of the parties 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 and the Guarantors on the one hand, or the Initial
Purchasers on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company, the Guarantors and the Initial
Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Initial
Purchasers shall not be obligated to make contributions hereunder that in the
aggregate exceed the total discounts, commissions and other compensation
received by the Initial Purchasers under this Agreement, less the aggregate
amount of any damages that the Initial Purchasers has otherwise been required to
pay by reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact, and 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. For purposes of this paragraph (d), each person, if any, who
controls the Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchasers, and each director of the Company, each officer of the
Company and each person, if any, who controls the Company or the Guarantors
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company.
-33-
10. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, the Guarantors, their respective officers and the Initial Purchasers
set forth in this Agreement or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Guarantors, any of their
respective officers or directors, the Initial Purchasers or any other person
referred to in Section 9 hereof and (ii) delivery of and payment for the Notes.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchasers by notice to the Company given prior
to the Closing Date in the event that the Company shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on their
respective part to be performed or satisfied hereunder at or prior thereto or,
if at or prior to the Closing Date any of the following shall have occurred:
(i) any of the Company or the Guarantors shall have sustained
any loss or interference with respect to its businesses or properties
from fire, flood, earthquakes, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or any legal or governmental proceeding,
which loss or interference has had or could be reasonably likely to
have a Material Adverse Effect, or there shall have been, in the sole
judgment of the Initial Purchasers, any other event or development
that, individually or in the aggregate, has or could be reasonably
likely to have a Material Adverse Effect (including without limitation
a change in control of the Company or the Guarantors), except in each
case as described in the Final Memorandum (exclusive of any amendment
or supplement thereto);
(ii) there shall have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company
and the Guarantors, taken as a whole, from that set forth in the Final
Memorandum that is material and adverse and that makes it, in the
Initial Purchasers' sole judgment, impracticable to market the Notes on
the terms and in the manner contemplated in the Final Memorandum;
(iii) trading generally shall have been suspended or materially
limited on or by, as the case may be, either of the New York Stock
-34-
Exchange or the National Association of Securities Dealers, Inc. or the
setting of minimum prices for trading on such exchange or market shall
have occurred or trading of any securities of the Company or the
Guarantors shall have been suspended on any exchange or in any
over-the-counter market;
(iv) a banking moratorium shall have been declared by New York
or United States authorities;
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States, (C) any material change in the financial
markets of the United States or (D) any other national or international
calamity or emergency which, in the case of (A), (B), (C) or (D) above
and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Notes as contemplated by the Final Memorandum;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that
has a material adverse effect on the financial markets in the United
States, and would, in the sole judgment of the Initial Purchasers, make
it impracticable or inadvisable to market the Notes;
(vii) the proposal, enactment, publication, decree, or other
promulgation of any federal or state statute, regulation, rule order of
any court or other governmental authority which, in the sole judgment
of the Initial Purchasers, would have a Material Adverse Effect;
(viii) any securities of the Company or any Guarantor shall have
been downgraded or placed on any "watch list" for possible downgrading
by any nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. If on the Closing Date any Initial Purchaser shall fail or
refuse to purchase Notes which it has agreed to purchase hereunder on such date,
and the aggregate principal amount of Notes with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Notes to be
purchased on such date, and arrangements satisfactory to the non-defaulting
Initial Purchaser and
-35-
the Company for the purchase of such Notes are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Initial Purchaser or the Company. In any such case either the
non-defaulting Initial Purchaser or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Memorandum or any other documents or
arrangements may be effected. Any action take under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
If this Agreement shall be terminated by the Initial
Purchaser, or any of them, because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement or any condition of the purchasers, obligations
cannot be fulfilled, the Company and each Guarantor agrees to reimburse the
Initial Purchasers or such Initial Purchasers as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and expenses of their counsel) reasonably incurred by such
Initial Purchasers in connection with this Agreement or the offering
contemplated hereunder; provided, however, that the Company shall have no
obligation under the Section if this Agreement is terminated by reason of (i)
the nonfulfillment of any condition arising out of any event described in
Section 11 hereof (ii) the failure of Initial Purchaser's counsel to deliver the
opinion referred to in Section 7(b) hereof.
13. Information Supplied by the Initial Purchasers. The
statements set forth in the last paragraph on the cover page of the Final
Memorandum and paragraphs 5, 6 and 7 under the heading "Plan of Distribution" in
the Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Company for the purposes of Sections 2(a) and 9 hereof.
14. Notices. All communications hereunder shall be in writing
and, if sent to the Initial Purchasers, shall be mailed or delivered to (i)
NatWest Capital Markets Limited, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇; with a copy
to White & Case, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; if sent to the Company, shall be mailed or
delivered to the Company at National Tobacco Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ with a copy to, Weil, Gotshal & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
-36-
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; and one
business day after being timely delivered to a next-day air courier.
15. Successors. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, the Company, the Guarantors and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Guarantors contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control the
Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and officers and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Notes from the Initial Purchasers will be deemed a successor
because of such purchase.
16. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-37-
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Initial Purchasers.
Very truly yours,
NORTH ATLANTIC TRADING
ACQUISITION COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chairman, President and CEO
GUARANTORS:
NATIONAL TOBACCO FINANCE
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chairman, President and CEO
NATIONAL TOBACCO COMPANY, L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chairman, President and CEO
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ OPERATING
COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chairman, President and CEO
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
NATWEST CAPITAL MARKETS LIMITED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
