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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 16, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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UST INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 2100 06-1193986
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
100 WEST PUTNAM AVENUE
GREENWICH, CONNECTICUT 06830
(203) 661-1100
(Address, Including Zip Code and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
RICHARD H. VERHEIJ, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
100 WEST PUTNAM AVENUE
GREENWICH, CONNECTICUT 06830
(203) 661-1100
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Copy to:
VINCENT J. PISANO, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NY 10022
(212) 735-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this registration
statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SECURITY OFFERING PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
7.25% Senior Notes due June 1, 2009.... $200,000,000 96.859% $193,718,000 $53,854
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Floating Rate Senior Notes due June 1,
2009................................. $40,000,000 101.094% $40,437,600 $11,242
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Total........................ $65,096
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION -- DATED AUGUST 16, 1999
PRELIMINARY PROSPECTUS [LOGO]
UST INC.
EXCHANGE OFFER FOR
$200,000,000 7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
$40,000,000 FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
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THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON SEPTEMBER , 1999, UNLESS EXTENDED.
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TERMS OF THE EXCHANGE OFFER:
- - We will exchange all outstanding notes that are validly tendered and not
withdrawn prior to the expiration of the exchange offer.
- - You may withdraw tendered outstanding notes at any time prior to the
expiration of the exchange offer.
- - We believe that the exchange of outstanding notes will not be a taxable
exchange for United States federal income tax purposes, but you should see the
section entitled "Material Federal Income Tax Consequences" on page 32 for
more information.
- - The terms of the notes to be issued are substantially identical to the terms
of the outstanding notes, except for transfer restrictions and registration
rights relating to the outstanding notes.
- - We will not receive any proceeds from the exchange offer.
- - There is no existing market for the notes to be issued, and we do not intend
to apply for their listing on any securities exchange.
SEE THE SECTION ENTITLED "RISK FACTORS" THAT BEGINS ON PAGE 6 FOR A
DISCUSSION OF THE RISKS THAT YOU SHOULD CONSIDER PRIOR TO TENDERING YOUR
OUTSTANDING NOTES FOR EXCHANGE.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES AND
EXCHANGE COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 1999.
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[INSIDE COVER]
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WHERE YOU CAN FIND MORE INFORMATION
UST is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). In accordance with the Exchange
Act, we file reports, proxy statements, and other information with the
Securities and Exchange Commission. Such reports, proxy statements, and other
information can be read and copies obtained at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048,
and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information on
the Public Reference Room. The SEC maintains an internet site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC,
including us. In addition, our common stock is listed on the New York Stock
Exchange and copies of the materials mentioned can be obtained from them.
You may obtain a copy of any or all of the documents summarized in this
prospectus or incorporated by reference in this prospectus, without charge, by
request directed to UST Inc., 100 West Putnam Avenue, Greenwich, Connecticut
06830, Attention: Debra Baker, Senior Vice President and Secretary, telephone
(203) 661-1100.
UST has agreed that, if it is not subject to the informational requirements
of Sections 13 or 15(d) of the Exchange Act, it will furnish to holders and
beneficial owners of the notes and to prospective purchasers designated by such
holders the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act to permit compliance with Rule 144A in connection with
resales of the notes.
We have "incorporated by reference" certain documents that we file with the
SEC. This means that we are disclosing important information to you by referring
you to those documents. You should be aware that information in a document
incorporated by reference may have been modified or superseded by information
that is included in other documents that were filed at a later date and which
are also incorporated by reference or included in this prospectus.
We incorporate by reference the documents listed below that we have filed
with the SEC:
- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Quarterly Report on Form 10-Q for the quarter ended June 30, 1999; and
- Current Report on Form 8-K on June 4, 1999.
FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary", "Risk Factors" and
elsewhere in this prospectus constitute forward-looking statements. All
statements, other than statements of historical facts, which address activities,
actions or new brand introductions that we expect or anticipate will or may
occur in the future, including such things as expansion and growth of our
operations and other such matters, are forward-looking statements. We are
identifying certain factors that would cause actual results to differ materially
from those expressed in any forward-looking statements.
Any one, or a combination, of these factors could materially affect the
results of our operations. These factors include:
- greater competition from entrants into the smokeless tobacco industry;
- changes in adult consumer preferences affecting demand for our products;
- regulatory changes affecting our business segments;
- potential liability from pending or threatened litigation;
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- changes in the tax laws affecting our products;
- higher than anticipated capital expenditures or operating costs;
- higher raw materials costs; and
- general domestic and international economic and political conditions.
In some cases, you can identify forward-looking statements by terms such as
"may", "will", "should", "could", "expect", "plans", "anticipates", "believes",
"predicts", "potential" or "continue" or the negative of these or similar terms.
Forward-looking statements made by us are based on our knowledge of our
business and the environment in which we operate, but because of the factors
listed above, as well as other factors beyond our control, actual results may
differ from those in the forward-looking statements.
All forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by those cautionary statements.
We will not update these forward-looking statements even though our situation
will change in the future.
TRADEMARKS AND TRADE NAMES
We own or have rights to trademarks or trade names that we use in
conjunction with the operation of our business. Our proprietary trademarks
include COPENHAGEN, COPENHAGEN LONG CUT, SKOAL, SKOAL LONG CUT, SKOAL BANDITS,
ROOSTER, RED SEAL, BRUTON, C.C., DEVOE, CHATEAU STE. MICHELLE, COLUMBIA CREST,
VILLA MT. EDEN, DOMAINE STE. MICHELLE, COLOUR VOLANT, CONN CREEK, BERT GRANT'S
ALE, DON TOMAS, ASTRAL and HABANO PRIMERO. In addition, our logo and certain
brand names of our products mentioned in this prospectus are our service marks
or trademarks. Each trademark, trade name or service mark by any other company
appearing in this prospectus belongs to its holder.
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PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus includes the basic terms of the notes we are offering, as well as
information regarding our business and detailed financial data. We encourage you
to read this prospectus in its entirety. References in this prospectus to "UST",
"we", "our", "ours" and "us" refer to UST Inc. and our subsidiaries.
ABOUT UST
Through our subsidiaries, we are the world's leading manufacturer and
marketer of smokeless tobacco. We also manufacture and market wine and premium
cigars. For the year ended December 31, 1998 and the six months ended June 30,
1999, our net sales were $1.423 billion and $728.2 million, respectively. Over
those same periods our earnings before interest, taxes, depreciation and
amortization were $764 million and $397.5 million, respectively. Over the
three-year period ending December 31, 1998 our pre-tax operating margins
averaged 52%.
UST was formed in 1986 to be a holding company and in 1987 United States
Tobacco Company, originally incorporated in 1911, became a wholly-owned
subsidiary. We currently have three additional wholly-owned subsidiaries:
International Wine & Spirits Ltd., UST Enterprises Inc. and UST International
Inc.
Our operating segments are tobacco and wine. For the six months ended June
30, 1999, the tobacco segment had net sales of $645.9 million, an increase of
4.9% from the corresponding period in 1998, and accounted for 88.7% of our
consolidated sales. For the six months ended June 30, 1999, wine segment sales
increased 1.9% to $68.3 million, while all other sales were $14.0 million.
Our executive offices are located at 100 West Putnam Avenue, Greenwich,
Connecticut 06830. Our telephone number is (203) 661-1100. UST is a Delaware
corporation.
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THE EXCHANGE OFFER
On May 27, 1999, we issued and sold $200 million aggregate principal amount
of 7.25% Senior Notes due 2009 and $40 million aggregate principal amount of
Floating Rate Senior Notes due 2009 in transactions exempt from the registration
requirements of the Securities Act. Simultaneously with these transactions, we
entered into an exchange and registration rights agreement with the initial
purchasers of these original notes, in which we agreed to deliver this
prospectus to you and to commence this exchange offer. In this exchange offer,
you may exchange your outstanding notes for new notes which have substantially
the same terms. You should read the discussion under the headings "The Exchange
Offer" and "Description of Notes" for further information regarding the notes to
be issued in the exchange offer.
Securities Offered......... Up to $200 million in principal amount of new 7.25%
Senior Notes due June 1, 2009 and $40 million in
principal amount of new Floating Rate Senior Notes
due June 1, 2009, registered under the Securities
Act of 1933. The terms of the notes offered in the
exchange offer are substantially identical to those
of the outstanding notes, except that the transfer
restrictions, registration rights and liquidated
damages provisions relating to the outstanding
notes do not apply to the new registered notes.
The Exchange Offer......... We are offering registered notes in exchange for a
like principal amount of our outstanding
unregistered notes. We are offering these
registered notes to satisfy our obligations under
an exchange and registration rights agreement which
we entered into with the initial purchasers of the
outstanding notes. You may tender your outstanding
notes for exchange by following the procedures
described under the heading "The Exchange Offer."
Tenders; Expiration Date;
Withdrawal............... The exchange offer will expire at 5:00 p.m., New
York City time, on , 1999, unless we
extend it. If you decide to exchange your
outstanding notes for new notes, you must
acknowledge that you are not engaging in, and do
not intend to engage in, a distribution of the new
notes. You may withdraw any notes that you tender
for exchange at any time prior to , 1999.
If we decide for any reason not to accept any notes
you have tendered for exchange, those notes will be
returned to you without cost promptly after the
expiration or termination of the exchange offer.
See "The Exchange Offer -- Terms of the Exchange
Offer" for a more complete description of the
tender and withdrawal provisions.
United States Federal
Income Tax Consequences.... Your exchange of outstanding notes for registered
notes to be issued in the exchange offer will not
result in any gain or loss to you for United States
federal income tax purposes. See "Material Federal
Income Tax Consequences" for a summary of material
United States federal income tax consequences
associated with the exchange of outstanding notes
for the registered notes to be issued in the
exchange offer and the ownership and disposition of
those registered notes.
Use of Proceeds............ We will not receive any cash proceeds from the
exchange offer.
Exchange Agent............. State Street Bank and Trust Company.
Shelf Registration
Statement.................. Under certain circumstances, certain holders of
outstanding notes (including holders who are not
permitted to participate in the exchange offer or
who may not freely resell registered notes received
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in the exchange offer) may, by giving UST written
notice, require UST to file, and cause to become
effective, a shelf registration statement under the
Securities Act, which would cover resales of
outstanding notes by these holders. See "Exchange
Offer; Registration Rights."
Consequences of Failure to
Exchange................. Outstanding notes not exchanged in the exchange
offer, will continue to be subject to the
restrictions on transfer that are described in the
legend on the notes. In general, you may offer or
sell your outstanding notes only if they are
registered under, or offered or sold under an
exemption from, the Securities Act and applicable
state securities laws. We do not currently intend
to register the outstanding notes under the
Securities Act. If your notes are not tendered and
accepted in the exchange offer, it may become more
difficult for you to sell or transfer your
unexchanged notes.
Consequences of Exchanging
Your Outstanding Notes... Based on interpretations of the staff of the
Securities and Exchange Commission, we believe that
you may offer for resale, resell or otherwise
transfer the notes that we issue in the exchange
offer without complying with the registration and
prospectus delivery requirements of the Securities
Act if:
- you acquire the notes issued in the exchange
offer in the ordinary course of your business;
- you are not participating, do not intend to
participate, and have no arrangement or
undertaking with anyone to participate, in the
distribution of the notes issued to you in the
exchange offer; and
- you are not an "affiliate" of UST Inc., as
defined in Rule 405 of the Securities Act.
If any of these conditions are not satisfied and
you transfer any notes issued to you in the
exchange offer without delivering a proper
prospectus or without qualifying for a registration
exemption, you may incur liability under the
Securities Act. We will not be responsible for or
indemnify you against any liability you may incur.
Any broker-dealer that acquires notes in the
exchange offer for its own account in exchange for
outstanding notes, which it acquired through
market-making or other trading activities, must
acknowledge that it will deliver a prospectus when
it resells or transfers any notes issued in the
exchange offer. See "Plan of Distribution" for a
description of the prospectus delivery obligations
of broker-dealers in the exchange offer.
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THE EXCHANGE NOTES
The terms of the notes we are issuing in this exchange offer and the
outstanding notes are identical in all material respects, except:
- the notes issued in the exchange offer will have been registered under
the Securities Act;
- the notes issued in the exchange offer will not contain transfer
restrictions and registration rights that relate to the outstanding
notes; and
- the notes issued in the exchange offer will not contain provisions
relating to the payment of liquidated damages to be made to the holders
of the outstanding notes under circumstances related to the timing of the
exchange offer.
A brief description of the material terms of the exchanged notes follows:
Interest Payment Dates..... Interest on the new 7.25% Senior Notes will be
payable semi-annually on June 1 and December 1 of
each year, beginning on December 1, 1999. Interest
on the new Floating Rate Senior Notes will be
payable quarterly on March 1, June 1, September 1,
and December 1 of each year, beginning December 1,
1999.
Maturity................... The maturity date for both the new 7.25% Senior
Notes and the new Floating Rate Senior Notes is
June 1, 2009.
Ranking.................... These notes are senior debt. They are equal in
right of payment with any existing or future
unsecured indebtedness, including trade payables,
but will rank senior to any future indebtedness
that expressly provides that it is subordinate to
these notes.
Optional Redemption........ The new 7.25% Senior Notes will be redeemable at
our option at any time, in whole or in part, at the
redemption prices listed in "Description of
Notes -- Optional Redemption -- 7.25% Notes."
The new Floating Rate Senior Notes will be
redeemable, in whole or in part, at our option at
any time, at the redemption prices listed in
"Description of Notes -- Optional
Redemption -- Floating Rate Senior Notes."
Basic Covenants of
Indenture.................. We will issue the notes being offered in the
exchange offer under an indenture with State Street
Bank and Trust Company, as trustee. This is the
same indenture under which the outstanding notes
were issued. The indenture, contains certain
covenants that, among other things, limit our
ability and the ability of certain of our
subsidiaries to create liens; and enter into sale
and leaseback transactions.
See the section "Description of Notes" under the
heading "Covenants" for a more comprehensive
description of the covenants contained in the
indenture.
Registration Covenant;
Exchange Offer............. In connection with our agreement to register the
exchange notes under the Securities Act by filing
the registration statement of which this prospectus
forms a part, we have agreed to:
- cause the registration statement to become
effective on or before November 23, 1999; and
- consummate the exchange offer within 45 days
after the effective date of the registration
statement.
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In addition, we have agreed, in certain
circumstances, to file a "shelf registration
statement" that would allow some or all of the
notes to be offered to the public.
If we fail to meet any or all the targets listed
above (a "registration default"), the annual
interest rates on the notes will increase by 0.25%
during the first 90-day period during which the
registration default continues, and will increase
by an additional 0.25% for each subsequent 90-day
period during which the registration default
continues, up to a maximum increase of 1.00% over
the interest rates that would otherwise apply to
the notes. As soon as we cure a registration
default, the interest rates on the notes will
revert to their original levels.
Upon consummation of the exchange offer, holders of
notes will no longer have any rights under the
exchange and registration rights agreement, except
to the extent that we have continuing obligations
to file a shelf registration statement.
For additional information concerning the above,
see "Description of Notes -- Form, exchange and
transfer and Registration covenant and exchange
offer".
RISK FACTORS
See "Risk Factors" beginning on page 6 for a discussion of factors that
should be considered by holders of outstanding notes before tendering their
outstanding notes in the exchange offer. Most of these factors will apply to the
registered notes as well as the outstanding notes.
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RISK FACTORS
You should consider carefully the following risks and all of the
information set forth in this prospectus before tendering your notes for
exchange in the exchange offer. The risk factors set forth below, other than
those which discuss the consequences of failing to exchange your outstanding
notes in the exchange offer, are generally applicable to both the outstanding
notes and the notes issued in the exchange offer.
YOU MAY HAVE DIFFICULTY SELLING THE NOTES WHICH YOU DO NOT EXCHANGE
If you do not exchange your outstanding notes for the notes offered in this
exchange offer, you will continue to be subject to the restrictions on the
transfer of your notes. Those transfer restrictions are described in the
indenture and in the legend contained on the outstanding notes, and arose
because we originally issued the outstanding notes under exemptions from, and in
transactions not subject to, the registration requirements of the Securities Act
of 1933.
In general, you may offer or sell your outstanding notes only if they are
registered under the Securities Act and applicable state securities laws, or if
they are offered and sold under an exemption from those requirements. We do not
intend to register the outstanding notes under the Securities Act.
If a large number of outstanding notes are exchanged for notes issued in
the exchange offer, it may be more difficult for you to sell your unexchanged
notes. In addition, if you do not exchange your outstanding notes in the
exchange offer, you will no longer be entitled to have those notes registered
under the Securities Act.
See "The Exchange Offer -- Consequences of Failure to Exchange Outstanding
Notes" for a discussion of the possible consequences of failing to exchange your
notes.
ABSENCE OF A PUBLIC MARKET MAY MAKE IT DIFFICULT TO SELL THE REGISTERED NOTES
The outstanding notes were issued to, and we believe these securities are
currently owned by, a relatively small number of beneficial owners. The
outstanding notes have not been registered under the Securities Act and will
remain subject to restrictions on transferability if they are not exchanged for
the registered notes. Although the registered notes may be resold or otherwise
transferred by the holders (who are not our affiliates) without compliance with
the registration requirements under the Securities Act, they will constitute a
new issue of securities with no established trading market. There can be no
assurance that such a market will develop. In addition, the registered notes
will not be listed on any national securities exchange. The registered notes may
trade at a discount from the initial offering price of the outstanding notes,
depending upon prevailing interest rates, the market for similar securities, our
operating results and other factors. We have been advised by the initial
purchasers that they currently intend to make a market in the registered notes,
as permitted by applicable laws and regulations; however, the initial purchasers
are not obligated to do so, and any such market-making activities may be
discontinued at any time without notice. In addition, such market-making
activity may be limited during the exchange offer and the pendency of a shelf
registration. Therefore, there can be no assurance that an active market for any
of the registered notes will develop, either prior to or after our performance
of our obligations under the exchange and registration rights agreement. If an
active public market does not develop, the market price and liquidity of the
registered notes may be adversely affected.
If a public trading market develops for the registered notes, future
trading prices will depend on many factors, including, among other things,
prevailing interest rates, our financial condition, and the market for similar
securities. Depending on these and other factors, the registered notes may trade
at a discount.
Notwithstanding the registration of the registered notes in the exchange
offer, holders who are "affiliates" (as defined under Rule 405 of the Securities
Act) of UST may publicly offer for sale or resale the registered notes only in
compliance with the provisions of Rule 144 under the Securities Act.
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Each broker-dealer that receives registered notes for its own account in
exchange for outstanding notes, where such outstanding notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such registered notes. See "Plan of Distribution."
MARKETING AND ADVERTISING RESTRICTIONS MAY AFFECT DEMAND FOR OUR PRODUCTS
In 1986, federal legislation was enacted regulating smokeless products by,
among other things, requiring health warning notices on smokeless tobacco
packages and advertising and prohibiting the advertising of smokeless tobacco
products on media subject to the jurisdiction of the Federal Communications
Commission. Since 1986, other proposals have been made at both the federal and
state level for additional regulation of smokeless tobacco products and it is
likely that additional proposals will be made in future years. These proposals
have included the requirement of additional warning notices, a ban or further
restriction on virtually all forms of tobacco advertising, sampling bans and
restrictions, and the disallowance of advertising and promotion expenses as
deductions under federal tax law. These proposals, if implemented, could have a
material adverse effect on our smokeless tobacco business.
In addition to increased regulatory restrictions, we have been required to
adopt various marketing and advertising restrictions in connection with the
Smokeless Tobacco Master Settlement Agreement which we entered into in November
1998 with the attorneys general of various states and U.S. territories to
resolve the remaining health care cost reimbursement cases initiated against us.
We are not able to assess the future effect that these increased marketing and
advertising restrictions may have on our smokeless tobacco business.
POTENTIAL OVERSIGHT BY THE FDA COULD SIGNIFICANTLY AFFECT THE MANUFACTURE AND
DISTRIBUTION OF OUR PRODUCTS
The Food and Drug Administration has promulgated regulations asserting
jurisdiction over smokeless tobacco products. These regulations, among other
things, include severe restrictions on the manufacture, distribution and sale of
smokeless tobacco products and would require us to comply with a wide range of
labeling, reporting, recordkeeping, manufacturing and other requirements. In
August 1998, the Fourth Circuit Court of Appeals ruled that the FDA does not
have the authority to regulate tobacco products, declared the FDA's regulations
invalid and, in November 1998, that court denied the FDA's petition for
rehearing. On April 23, 1999, the United States Supreme Court granted the FDA's
petition for review of the Fourth Circuit's ruling, and a decision is expected
sometime in the year 2000. The ultimate outcome of this litigation cannot be
predicted. The FDA's exercise of jurisdiction, if not reversed by judicial or
legislative action, could lead to more expansive FDA-imposed restrictions on
smokeless tobacco operations than those set forth in the regulations and could
materially and adversely affect our smokeless tobacco business.
INCREASED EXCISE TAXES MAY REDUCE OUR SALES
Smokeless tobacco products are subject to significant federal and state
excise taxes. A federal excise tax on smokeless tobacco products was imposed in
1986, which was increased in 1991, 1993 and 1997, and is scheduled to increase
in the years 2000 and 2002. In general, excise taxes and other taxes on
smokeless tobacco products have been increasing. Congress has been considering
significant increases in the federal excise tax or other payments from tobacco
manufacturers, including proposals to equalize the federal excise tax on
smokeless tobacco products with the federal excise tax on cigarettes, resulting
in a $1.00 or more per can increase in the current tax. Increases in other
smokeless tobacco-related taxes have been proposed at the state and local
levels. A recently enacted substantial increase in California's state excise tax
on smokeless tobacco products has significantly reduced the demand for our
premium smokeless tobacco products in that state. If proposals are adopted by
either the federal government or the various states which include significant
excise tax increases, our sales and consequently our cash flows could be
materially adversely affected.
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POTENTIAL ADVERSE OUTCOME OF LITIGATION
We have been named as a defendant in a number of legal proceedings,
including class action/health care cost reimbursement/third party recoupment
litigation, and claims brought by individual plaintiffs alleging tobacco related
injuries and an antitrust claim brought by one of our competitors. It is not
possible to predict with certainty the outcome of the litigation pending against
us. While the litigation environment is uncertain, we believe, and have been so
advised by counsel handling the respective cases, that we have a number of
meritorious defenses to all litigation pending against us. We believe, subject
to the uncertainties of litigation, that the outcome of all such pending
litigation will not have a material adverse effect on our consolidated financial
position, but may have a material impact on our consolidated financial results
for a particular reporting period in which any such litigation is resolved.
There can be no assurance, however, that we will be correct in our belief.
USE OF PROCEEDS
The net proceeds of the sale of the outstanding notes were approximately
$238.4 million, and were used to repay existing commercial paper obligations and
for general corporate purposes, including our stock repurchase program. These
commercial paper obligations had an average annual interest rate of 4.87%.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the years ended December
31, 1994 through 1998 was 140x, 148x, 103x, 81x and 134x, respectively. Our
ratio of earnings to fixed charges for the six months ended June 30, 1999 was
71x. We compute these ratios by dividing our earnings by our fixed charges. For
this computation, earnings include net income before income taxes and fixed
charges, net of capitalized interest. Fixed charges include gross interest
expense, whether expensed or capitalized.
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<PAGE> 14
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
When we sold the outstanding notes in May 1999, we entered into an exchange
and registration rights agreement with the initial purchasers of those notes.
Under the exchange and registration rights agreement, we agreed to file a
registration statement regarding the exchange of the outstanding notes for notes
which are registered under the Securities Act of 1933. We also agreed to use our
reasonable best efforts to cause the registration statement to become effective
with the Securities and Exchange Commission, and to conduct this exchange offer
after the registration statement is declared effective. We will use our best
efforts to keep this registration statement effective until the earlier of (1)
the 90th day after this exchange offer is completed or (2) the day on which no
outstanding notes are held by broker-dealers. The exchange and registration
rights agreement provides that we will be required to pay liquidated damages to
the holders of the outstanding notes if:
- the registration statement is not filed by August 25, 1999;
- the registration statement is not declared effective by November 23,
1999; or
- the exchange offer has not been completed within 45 days of the effective
date of this registration statement.
A copy of the exchange and registration rights agreement is filed as an
exhibit to the registration statement to which this prospectus is a part.
TERMS OF THE EXCHANGE OFFER
This prospectus and the accompanying letter of transmittal together
constitute the exchange offer. Upon the terms and subject to the conditions set
forth in this prospectus and in the letter of transmittal, we will accept for
exchange outstanding notes which are properly tendered on or before the
expiration date and are not withdrawn as permitted below. The expiration date
for this exchange offer is 5:00 p.m., New York City time, on , 1999,
or such later date and time to which we, in our sole discretion, extend the
exchange offer.
The form and terms of the notes being issued in the exchange offer are the
same as the form and terms of the outstanding notes, except that:
- the notes being issued in the exchange offer will have been registered
under the Securities Act;
- the notes issued in the exchange offer will not bear the restrictive
legends restricting their transfer under the Securities Act; and
- the notes being issued in the exchange offer will not contain the
registration rights and liquidated damages provisions contained in the
outstanding notes.
Notes tendered in the exchange offer must be in denominations of the
principal amount of $1,000 and any integral multiple thereof.
We expressly reserve the right, in our sole discretion:
- to extend the expiration date;
- to delay accepting any outstanding notes;
- if any of the conditions set forth below under "-- Conditions to the
Exchange Offer" have not been satisfied, to terminate the exchange offer
and not accept any notes for exchange; or
- to amend the exchange offer in any manner.
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<PAGE> 15
We will give oral or written notice of any extension, delay,
non-acceptance, termination or amendment as promptly as practicable by a public
announcement, and in the case of an extension, no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date.
During an extension, all outstanding notes previously tendered will remain
subject to the exchange offer and may be accepted for exchange by us. Any
outstanding notes not accepted for exchange for any reason will be returned
without cost to the holder that tendered them as promptly as practicable after
the expiration or termination of the exchange offer.
HOW TO TENDER NOTES FOR EXCHANGE
When the holder of outstanding notes tenders, and we accept, notes for
exchange, a binding agreement between us and the tendering holder is created,
subject to the terms and conditions set forth in this prospectus and the
accompanying letter of transmittal. Except as set forth below, a holder of
outstanding notes who wishes to tender notes for exchange must do so on or prior
to the expiration date:
- transmit a properly completed and duly executed letter of transmittal,
including all other documents required by such letter of transmittal, to
State Street Bank and Trust Company (the "exchange agent") at the address
set forth below under the heading "Exchange Agent"; or
- if notes are tendered pursuant to the book-entry procedures set forth
below, the tendering holder must transmit an agent's message to the
exchange agent at the address set forth below under the heading "Exchange
Agent."
In addition, either:
- the exchange agent must receive the certificates for the outstanding
notes and the letter of transmittal;
- the exchange agent must receive, prior to the expiration date, a timely
confirmation of the book-entry transfer of the notes being tendered into
the exchange agent's account at the Depository Trust Company (the "DTC"),
along with the letter of transmittal or an agent's message; or
- the holder must comply with the guaranteed delivery procedures described
below.
The term "agent's message" means a message, transmitted to the DTC and
received by the exchange agent and forming a part of a book-entry transfer (a
"book-entry confirmation"), which states that the DTC has received an express
acknowledgment that the tendering holder agrees to be bound by the letter of
transmittal and that we may enforce the letter of transmittal against such
holder.
THE METHOD OF DELIVERY OF THE OUTSTANDING NOTES, THE LETTERS OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF
SUCH DELIVERY IS BY MAIL, WE RECOMMEND REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO
ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR NOTES SHOULD BE SENT
DIRECTLY TO US.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the notes surrendered for exchange are
tendered:
- by a holder of outstanding notes who has not completed the box entitled
"Special Issuance Instructions" or "Special Delivery Instructions" on the
letter of transmittal; or
- for the account of an eligible institution.
An "eligible institution" is a firm which is a member of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
If signatures on a letter of transmittal or notice of withdrawal are
required to be guaranteed, the guarantor must be an eligible institution. If
notes are registered in the name of a person other than the
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<PAGE> 16
signer of the letter of transmittal, the notes surrendered for exchange must be
endorsed by, or accompanied by a written instrument or instruments of transfer
or exchange, in satisfactory form as determined by us in our sole discretion,
duly executed by the registered holder with the holder's signature guaranteed by
an eligible institution.
We will determine all questions as to the validity, form, eligibility
(including time of receipt) and acceptance of notes tendered for exchange in our
sole discretion. Our determination will be final and binding. We reserve the
absolute right to:
- reject any and all tenders of any note improperly tendered;
- refuse to accept any note if, in our judgment or the judgment of our
counsel, acceptance of the note may be deemed unlawful; and
- waive any defects or irregularities or conditions of the exchange offer
as to any particular note either before or after the expiration date,
including the right to waive the ineligibility of any holder who seeks to
tender notes in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer as to
any particular notes either before or after the expiration date, including the
letter of transmittal and the instructions to it, will be final and binding on
all parties. Holders must cure any defects and irregularities in connection with
tenders of notes for exchange within such reasonable period of time as we will
determine, unless we waive such defects or irregularities. Neither we, the
exchange agent nor any other person shall be under any duty to give notification
of any defect or irregularity with respect to any tender of notes for exchange,
nor shall any of us incur any liability for failure to give such notification.
If a person or persons other than the registered holder or holders of the
outstanding notes tendered for exchange signs the letter of transmittal, the
tendered notes must be endorsed or accompanied by appropriate powers of
attorney, in either case signed exactly as the name or names of the registered
holder or holders that appear on the outstanding notes.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any notes or any power of attorney,
such persons should so indicate when signing, and you must submit proper
evidence satisfactory to us of such person's authority to so act unless we waive
this requirement.
By tendering, each holder will represent to us that, among other things,
that the person acquiring notes in the exchange offer is obtaining them in the
ordinary course of its business, whether or not such person is the holder, and
that neither the holder nor such other person has any arrangement or
understanding with any person to participate in the distribution of the notes
issued in the exchange offer. If any holder or any such other person is an
"affiliate," as defined under Rule 405 of the Securities Act, of UST, or is
engaged in or intends to engage in or has an arrangement or understanding with
any person to participate in a distribution of such notes to be acquired in the
exchange offer, such holder or any such other person:
- may not rely on the applicable interpretations of the staff of the SEC;
and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
Each broker-dealer who acquired its outstanding notes as a result of
market-making activities or other trading activities and thereafter receives
notes issued for its own account in the exchange offer, must acknowledge that it
will deliver a prospectus in connection with any resale of such notes issued in
the exchange offer. The letter of transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. See "Plan of
Distribution" for a discussion of the exchange and resale obligations of
broker-dealers in connection with the exchange offer.
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<PAGE> 17
ACCEPTANCE OF OUTSTANDING NOTES FOR EXCHANGE; DELIVERY OF NOTES ISSUED IN THE
EXCHANGE OFFER
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, promptly after the expiration date, all outstanding notes
properly tendered and will issue notes registered under the Securities Act. For
purposes of the exchange offer, we shall be deemed to have accepted properly
tendered outstanding notes for exchange when, as and if we have given oral or
written notice to the exchange agent, with written confirmation of any oral
notice to be given promptly thereafter. See "-- Conditions to the Exchange
Offer" for a discussion of the conditions that must be satisfied before we
accept any notes for exchange.
For each outstanding note accepted for exchange, the holder will receive a
note registered under the Securities Act having a principal amount equal to that
of the surrendered outstanding note. Accordingly, registered holders of notes
issued in the exchange offer on the relevant record date for the first interest
payment date following the consummation of the exchange offer will receive
interest accruing from the most recent date to which interest has been paid or,
if no interest has been paid on the outstanding notes, from December 19, 1999.
Outstanding notes that we accept for exchange will cease to accrue interest from
and after the date of consummation of the exchange offer. Under the exchange and
registration rights agreement, we may be required to make additional payments in
the form of liquidated damages to the holders of the outstanding notes under
circumstances relating to the timing of the exchange offer.
In all cases, we will issue notes in the exchange offer for outstanding
notes that are accepted for exchange only after the exchange agent timely
receives:
- certificates for such outstanding notes or a timely book-entry
confirmation of such outstanding notes into the exchange agent's account
at the DTC;
- a properly completed and duly executed letter of transmittal or an
agent's message; and
- all other required documents.
If for any reason set forth in the terms and conditions of the exchange
offer we do not accept any tendered outstanding notes, or if a holder submits
outstanding notes for a greater principal amount than the holder desires to
exchange, we will return such unaccepted or non-exchanged notes without cost to
the tendering holder. In the case of notes tendered by book-entry transfer into
the exchange agent's account at the DTC, such non-exchanged notes will be
credited to an account maintained with the DTC. We will return the notes or have
them credited to the DTC account as promptly as practicable after the expiration
or termination of the exchange offer.
BOOK-ENTRY TRANSFERS
The exchange agent will make a request to establish an account with respect
to the outstanding notes at the DTC for purposes of the exchange offer within 2
business days after the date of this prospectus. Any financial institution that
is a participant in the DTC's systems must make book-entry delivery of
outstanding notes by causing the DTC to transfer such outstanding notes into the
exchange agent's account at the DTC in accordance with the DTC's procedures for
transfer. Such participant should transmit its acceptance to the DTC on or prior
to the expiration date or comply with the guaranteed delivery procedures
described below. DTC will verify such acceptance, execute a book-entry transfer
of the tendered outstanding notes into the exchange agent's account at DTC and
then send to the exchange agent confirmation of such book-entry transfer. The
confirmation of such book-entry transfer will include an agent's message
confirming that DTC has received an express acknowledgment from such participant
that such participant has received and agrees to be bound by the letter of
transmittal and that we may enforce the letter of transmittal against such
participant. Delivery of notes issued in the exchange offer may be effected
through book-entry transfer at DTC. However, the letter of transmittal or
facsimile thereof or an agent's message, with any required signature guarantees
and any other required documents, must:
- be transmitted to and received by the exchange agent at the address set
forth below under "-- Exchange Agent" on or prior to the expiration date;
or
- comply with the guaranteed delivery procedures described below.
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<PAGE> 18
GUARANTEED DELIVERY PROCEDURES
If a holder of outstanding notes desires to tender such notes and the
holder's notes are not immediately available, or time will not permit such
holder's notes or other required documents to reach the exchange agent before
the expiration date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if:
- the holder tenders the notes through an eligible institution;
- prior to the expiration date, the exchange agent receives from such
eligible institution a properly completed and duly executed notice of
guaranteed delivery, substantially in the form we have provided, by
telegram, telex, facsimile transmission, mail or hand delivery, setting
forth the name and address of the holder of the notes being tendered and
the amount of the notes being tendered. The notice of guaranteed delivery
shall state that the tender is being made and guarantee that within 3 New
York Stock Exchange trading days after the date of execution of the
notice of guaranteed delivery, the certificates for all physically
tendered notes, in proper form for transfer, or a book-entry
confirmation, as the case may be, together with a properly completed and
duly executed letter of transmittal or agent's message with any required
signature guarantees and any other documents required by the letter of
transmittal will be deposited by the eligible institution with the
Exchange Agent; and
- the exchange agent receives the certificates for all physically tendered
outstanding notes, in proper form for transfer, or a book-entry
confirmation, as the case may be, together with a properly completed and
duly executed letter of transmittal or agent's message with any required
signature guarantees and any other documents required by the letter of
transmittal, within 3 New York Stock Exchange trading days after the date
of execution of the notice of guaranteed delivery.
WITHDRAWAL RIGHTS
You may withdraw tenders of your outstanding notes at any time prior to
5:00 p.m., New York City time, on the expiration date.
For a withdrawal to be effective, you must send a written notice of
withdrawal to the exchange agent at one of the addresses set forth below under
"-- Exchange Agent." Any such notice of withdrawal must:
- specify the name of the person having tendered the outstanding notes to
be withdrawn;
- identify the outstanding notes to be withdrawn, including the principal
amount of such outstanding notes; and
- where certificates for outstanding notes are transmitted, specify the
name in which outstanding notes are registered, if different from that of
the withdrawing holder.
If certificates for outstanding notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of such
certificates the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and signed notice of withdrawal with
signatures guaranteed by an eligible institution unless such holder is an
eligible institution. If notes have been tendered pursuant to the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at the DTC to be credited with the withdrawn
notes and otherwise comply with the procedures of such facility. We will
determine all questions as to the validity, form and eligibility (including time
of receipt) of such notices and our determination will be final and binding on
all parties. Any tendered notes so withdrawn will be deemed not to have been
validly tendered for exchange for purposes of the exchange offer. Any notes
which have been tendered for exchange but which are not exchanged for any reason
will be returned to the holder thereof without cost to such holder. In the case
of notes tendered by book-entry transfer into the exchange agent's account at
the DTC, the notes withdrawn will be credited to an account maintained with the
DTC for the outstanding notes. The notes will be returned or credited to the DTC
account as soon as practicable after withdrawal, rejection of tender or
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<PAGE> 19
termination of the exchange offer. Properly withdrawn notes may be re-tendered
by following one of the procedures described under "-- How to Tender Notes for
Exchange" above at anytime on or prior to 5:00 p.m., New York City time, on the
expiration date.
CONDITIONS TO THE EXCHANGE OFFER
We are not required to accept for exchange, or to issue notes in the
exchange offer for any outstanding notes. We may terminate or amend the exchange
offer, if at any time before the acceptance of such outstanding notes for
exchange:
- any federal law, statute, rule or regulation shall have been adopted or
enacted which, in our judgment, would reasonably be expected to impair
our ability to proceed with the exchange offer;
- any stop order shall be threatened or in effect with respect to the
registration statement of which this prospectus constitutes a part or the
qualification of the indenture under the Trust Indenture Act of 1939, as
amended; or
- there shall occur a change in the current interpretation by staff of the
Securities and Exchange Commission which permits the notes issued in the
exchange offer in exchange for the outstanding notes to be offered for
resale, resold and otherwise transferred by such holders, other than
broker-dealers and any such holder which is an "affiliate" of UST within
the meaning of Rule 405 under the Securities Act, without compliance with
the registration and prospectus delivery provisions of the Securities
Act, provided that such notes acquired in the exchange offer are acquired
in the ordinary course of such holder's business and such holder has no
arrangement or understanding with any person to participate in the
distribution of such notes issued in the exchange offer.
The preceding conditions are for our sole benefit and we may assert them
regardless of the circumstances giving rise to any such condition. We may waive
the preceding conditions in whole or in part at any time and from time to time
in our sole discretion. Our failure at any time to exercise the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which we may assert at any time and from time to time.
THE EXCHANGE AGENT
State Street Bank and Trust Company, National Association has been
appointed as our exchange agent for the exchange offer. All executed letters of
transmittal should be directed to our exchange agent at the address set forth
below. Questions and requests for assistance, requests for additional copies of
this prospectus or of the letter of transmittal and requests for notices of
guaranteed delivery should be directed to the exchange agent addressed as
follows:
Main Delivery To:
STATE STREET BANK AND TRUST COMPANY, AS EXCHANGE AGENT
<TABLE>
<S> <C> <C>
By mail: By hand or overnight courier By Facsimile
to: (for eligible institutions
State Street Bank and only):
Trust Company State Street Bank and
Corporate Trust Division Trust Company (617) 662-1452
P.O. Box 778 Corporate Trust Division
Boston, MA 02102-0778 2 Avenue de Lafayette Confirm by telephone:
Attn: Ralph Jones, LCC5 Boston, MA 02111-1724
Attn: Ralph Jones, LCC5 (617) 662-1548
</TABLE>
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF SUCH LETTER OF TRANSMITTAL VIA FACSIMILE OTHER THAN AS
SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF
TRANSMITTAL.
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<PAGE> 20
FEES AND EXPENSES
We will not make any payment to brokers, dealers, or others soliciting
acceptance of the exchange offer except for reimbursement of mailing expenses.
The cash expenses to be incurred in connection with the exchange offer will
be paid by us and are estimated in the aggregate to be approximately $250,000.
TRANSFER TAXES
Holders who tender their outstanding notes for exchange will not be
obligated to pay any transfer taxes in connection with the exchange. If,
however, notes issued in the exchange offer are to be delivered to, or are to be
issued in the name of, any person other than the holder of the notes tendered,
or if a transfer tax is imposed for any reason other than the exchange of
outstanding notes in connection with the exchange offer, then the holder must
pay any such transfer taxes, whether imposed on the registered holder or on any
other person. If satisfactory evidence of payment of, or exemption from, such
taxes is not submitted with the letter of transmittal, the amount of such
transfer taxes will be billed directly to the tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE OUTSTANDING NOTES
Holders who desire to tender their outstanding notes in exchange for notes
registered under the Securities Act should allow sufficient time to ensure
timely delivery. Neither the exchange agent nor UST is under any duty to give
notification of defects or irregularities with respect to the tenders of notes
for exchange.
Outstanding notes that are not tendered or are tendered but not accepted
will, following the consummation of the exchange offer, continue to be subject
to the provisions in the indenture regarding the transfer and exchange of the
outstanding notes and the existing restrictions on transfer set forth in the
legend on the outstanding notes and in the offering circular dated May 25, 1999,
relating to the outstanding notes. Except in limited circumstances with respect
to specific types of holders of outstanding notes, we will have no further
obligation to provide for the registration under the Securities Act of such
outstanding notes. In general, outstanding notes, unless registered under the
Securities Act, may not be offered or sold except pursuant to an exemption from,
or in a transaction not subject to, the Securities Act and applicable state
securities laws. We do not currently anticipate that we will take any action to
register the outstanding notes under the Securities Act or under any state
securities laws.
Upon completion of the exchange offer, holders of the outstanding notes
will not be entitled to any further registration rights under the exchange and
registration rights agreement, except under limited circumstances.
Holders of the notes issued in the exchange offer and any outstanding notes
which remain outstanding after consummation of the exchange offer will vote
together as a single class for purposes of determining whether holders of the
requisite percentage of the class have taken certain actions or exercised
certain rights under the indenture.
CONSEQUENCES OF EXCHANGING OUTSTANDING NOTES
Based on interpretations of the staff of the SEC, as set forth in no-action
letters to third parties, we believe that the notes issued in the exchange offer
may be offered for resale, resold or otherwise transferred by holders of such
notes, other than by any holder which is an "affiliate" of UST within the
meaning of Rule 405 under the Securities Act. Such notes may be offered for
resale, resold or otherwise transferred without compliance with the registration
and prospectus delivery provisions of the Securities Act, if:
- such notes issued in the exchange offer are acquired in the ordinary
course of such holder's business; and
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<PAGE> 21
- such holder, other than broker-dealers, has no arrangement or
understanding with any person to participate in the distribution of such
notes issued in the exchange offer.
However, the SEC has not considered the exchange offer in the context of a
no-action letter and we cannot guarantee that the staff of the SEC would make a
similar determination with respect to the exchange offer as in such other
circumstances.
Each holder, other than a broker-dealer, must furnish a written
representation, at our request, that:
- it is not an affiliate of UST;
- it is not engaged in, and does not intend to engage in, a distribution of
the notes issued in the exchange offer and has no arrangement or
understanding to participate in a distribution of notes issued in the
exchange offer; and
- it is acquiring the notes issued in the exchange offer in the ordinary
course of its business.
Each broker-dealer that receives notes issued in the exchange offer for its
own account in exchange for outstanding notes must acknowledge that such
outstanding notes were acquired by such broker-dealer as a result of
market-making or other trading activities and that it will deliver a prospectus
in connection with any resale of such notes issued in the exchange offer. See
"Plan of Distribution" for a discussion of the exchange and resale obligations
of broker-dealers in connection with the exchange offer.
In addition, to comply with state securities laws of certain jurisdictions,
the notes issued in the exchange offer may not be offered or sold in any state
unless they have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and complied with by
the holders selling the notes. We have agreed in the exchange and registration
rights agreement that, prior to any public offering of transfer restricted
securities, we will register or qualify the transfer restricted securities for
offer or sale under the securities laws of any jurisdiction requested by a
holder. Unless a holder requests, we currently do not intend to register or
qualify the sale of the notes issued in the exchange offer in any state where an
exemption from registration or qualification is required and not available.
"Transfer restricted securities" means each note until:
- the date on which such note has been exchanged by a person other than a
broker-dealer for a note in the exchange offer;
- following the exchange by a broker-dealer in the exchange offer of a note
for a note issued in the exchange offer, the date on which the note
issued in the exchange offer is sold to a purchaser who receives from
such broker-dealer on or prior to the date of such sale a copy of this
prospectus;
- the date on which such note has been effectively registered under the
Securities Act and disposed of in accordance with a shelf registration
statement that we file in accordance with the exchange and registration
rights agreement; or
- the date on which such note is distributed to the public in a transaction
under Rule 144 of the Securities Act.
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<PAGE> 22
DESCRIPTION OF NOTES
The terms of the notes to be issued in the exchange offer are identical in
all material respects to the terms of the outstanding notes, except for the
transfer restrictions relating to the outstanding notes. Any outstanding notes
that remain outstanding after the exchange offer, together with notes issued in
the exchange offer, will be treated as a single class of securities under the
indenture for voting purposes. When we refer to the term "note" or "notes", we
are referring to both the outstanding notes and the notes to be issued in the
exchange offer. When we refer to "holders" of the notes, we are referring to
those persons who are the registered holders of notes on the books of the
registrar appointed under the indenture.
The notes are governed by a document called an "indenture". The indenture
is a contract between us and State Street Bank and Trust Company, which acts as
trustee. The trustee has two main roles. First, the trustee can enforce your
rights against us if we default. There are some limitations on the extent to
which the trustee acts on your behalf, described under "Remedies If An Event Of
Default Occurs". Second, the trustee performs administrative duties for us, such
as sending you interest payments, transferring your notes to a new buyer if you
sell and sending you notices. The indenture and its associated documents contain
the full legal text of the matters described in this section. The indenture and
the notes are governed by New York law. See "Where You Can Find More
Information" on page i for information on how to obtain a copy of the indenture.
The following description of the provisions of the indenture is a summary
only. More specific terms as well as the definitions of relevant terms can be
found in the indenture and the Trust Indenture Act of 1939, which is applicable
to the indenture. We have also included references in parentheses to certain
sections of the indenture. Because this section is a summary, it does not
describe every aspect of the notes. This summary is subject to and qualified in
its entirety by reference to all the provisions of the indenture, including
definitions of certain terms used in the indenture.
PRINCIPAL, MATURITY AND INTEREST
The notes are general unsecured obligations of UST. The 7.25% notes are
limited to $200,000,000 aggregate principal amount and the floating rate notes
will be limited to $40,000,000 aggregate principal amount. The notes are not
entitled to any sinking fund.
7.25% SENIOR NOTES. The 7.25% notes will mature on June 1, 2009 and will
bear interest at the yearly rate of 7.25% from May 27, 1999, payable
semi-annually on June 1, and December 1, of each year, commencing December 1,
1999.
FLOATING RATE SENIOR NOTES. The floating rate notes will mature on June 1,
2009 and will bear interest at a floating rate determined in a manner as
described below, payable quarterly on March 1, June 1, September 1 and December
1 of each year, commencing December 1, 1999.
The per annum interest rate on the floating rate notes in effect for each
day of an interest period will be equal to the three-month London interbank
offered rate (LIBOR) determined in the manner set forth below, plus 90 basis
points. The interest rate for the initial interest period was set on May 27,
1999 and the interest rate for each subsequent period will be reset on the 1st
day of the month of each March, June, September and December thereafter (each
such date an "interest reset date") until the principal on the floating rate
notes is paid or made available for payment (the "principal payment date"). If
any interest reset date and interest payment date would otherwise be a day that
is not a LIBOR business day, that interest reset date and interest payment date
shall be the following LIBOR business day, unless the following LIBOR business
day is in the following calendar month, in which case the interest reset date
and interest payment date will be the immediately preceding LIBOR business day.
"LIBOR business day" means any day that is not a Saturday or Sunday and
that, in the City of New York or the City of London, is not a day on which
banking institutions are generally authorized or obligated by law to close.
"Interest period" means the period from and including an interest reset date to
but excluding the next succeeding interest reset date and, in the case of the
last such period, from and including the interest reset date immediately
preceding the principal payment date to but not including the
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<PAGE> 23
principal payment date. If the principal payment date is not a LIBOR business
day, then the principal amount of the floating rate notes plus accrued and
unpaid interest thereon shall be paid on the next succeeding business day and no
interest shall accrue for the principal payment date or any day thereafter.
"Business day" shall mean any day that is not a Saturday or Sunday and
that, in the City of New York, is not a day on which banking institutions are
generally authorized or obligated by law to close.
The "three-month LIBOR rate" shall mean the rate determined in accordance
with the following provisions:
- On the second day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market preceding each interest reset
date (each such date an "interest determination date"), State Street Bank
and Trust Company, as agent for UST (the "reference agent"), will
determine the three-month LIBOR rate which shall be the rate for deposits
in U.S. dollars having a three-month maturity which appears on Telerate
Page 3750 as of 11:00 a.m., London time, on such interest determination
date. "Telerate Page 3750" means the display page so designated on the
Dow Jones Markets Limited (or such other page as may replace that page on
that service or such other service or services as may be nominated by the
British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If the three-month
LIBOR rate on such interest determination date does not appear on the
Telerate Page 3750, such three-month LIBOR rate will be determined as
described in the next bullet point.
- With respect to an interest determination date for which the three-month
LIBOR rate does not appear on the Telerate Page 3750 as specified above,
the three-month LIBOR rate will be determined on the basis of the rates
at which deposits in U.S. dollars are offered by four major banks in the
London interbank market selected by the reference agent (the "reference
banks") at approximately 11:00 a.m., London time, on such interest
determination date to prime banks in the London interbank market having a
three-month maturity and in a principal amount equal to an amount of not
less than U.S. $1,000,000 that is representative for a single transaction
in such market at such time. The reference agent will request the
principal London office of each of such reference banks to provide a
quotation of its rate. If at least two such quotations are provided, the
three-month LIBOR rate on such interest determination date will be the
arithmetic mean (rounded upwards, if necessary, to the nearest one
hundred-thousandth of a percentage point, with 5 one-millionths of a
percentage point rounded upwards) of such quotations. If fewer than two
quotations are provided, the three-month LIBOR rate on such interest
determination date will be the arithmetic mean (rounded upwards, if
necessary, to the nearest one hundred-thousandth of a percentage point,
with 5 one-millionths of a percentage point rounded upwards) of the rates
quoted by three major banks in New York City selected by the reference
agent, at approximately 11:00 a.m., New York City time, on such interest
determination date for loans in U.S. dollars to leading European banks,
having a three-month maturity and in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a
single transaction in such market at such time; provided, however, that
if the banks in New York City selected as aforesaid by the reference
agent are not quoting as mentioned in this sentence, the interest rate
for the interest period commencing on the interest reset date following
such interest determination date will be the interest rate in effect on
such interest determination date.
The amount of interest for each day that a floating rate note is
outstanding (the "daily interest amount") will be calculated by dividing the
interest rate in effect for such day by 360 and multiplying the result by the
principal amount of the floating rate note. The amount of interest to be paid on
the floating rate note for any interest period will be calculated by adding the
daily interest amounts for each day in such interest period.
The interest rate on the floating rate notes will in no event be higher
than the maximum rate permitted by New York Law as the same may be modified by
United States law of general application.
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The interest rate and amount of interest to be paid on the floating rate
notes for each interest period will be determined by the reference agent. All
calculations made by the reference agent shall in the absence of manifest error
be conclusive for all purposes and binding on UST and the holders of the
floating rate notes. So long as the three-month LIBOR rate is required to be
determined with respect to the floating rate notes, there will at all times be a
reference agent. In the event that any then acting reference agent shall be
unable or unwilling to act, or that such reference agent shall fail duly to
establish the three-month LIBOR rate for any interest period, or that UST
proposes to remove such reference agent, UST shall appoint another person which
is a bank, trust company, investment banking firm or other financial institution
to act as the reference agent.
Principal, any premium and interest on the notes will be payable, and the
notes may be presented for registration of transfer and exchange, at the
corporate trust office or the trustee of another office or agency of UST as
determined by us. At our option, payment of interest may be made by check mailed
to the holders at the addresses appearing in the registry books maintained by
the trustee, who will initially act as registrar for the notes.
OPTIONAL REDEMPTION
7.25% SENIOR NOTES. The 7.25% notes will be redeemable, in whole or in
part, at the option of UST at any time. The redemption price for the 7.25% notes
will be the greater of:
- 100% of the principal amount of the 7.25% notes plus accrued interest on
the 7.25% notes to the date of redemption; or
- the sum, as determined by a quotation agent appointed by the trustee in
consultation with us, of the present value of the remaining scheduled
payments of principal and interest on the 7.25% notes (excluding any
portion of such payments of interest accrued as of the date of
redemption) discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
"adjusted treasury rate," plus 15 basis points, plus accrued interest on
the 7.25% notes to the date of redemption.
The "adjusted treasury rate" for any redemption date means the rate per
year equal to the semi-annual equivalent yield to maturity of the "comparable
treasury issue", assuming a price for the comparable treasury issue (expressed
as a percentage of its principal amount) equal to the "comparable treasury
price" for such redemption date.
The "comparable treasury issue" (expressed as a percentage of its principal
amount) is a United States treasury security having a maturity comparable to the
remaining term of the 7.25% notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, that
would be used in pricing new issues of corporate notes of comparable maturity to
the remaining term of the 7.25% notes.
The "quotation agent" is the "reference treasury dealer" appointed by the
trustee after consultation with UST. The "reference treasury dealer" means:
- Goldman, Sachs & Co. and its respective successors; provided, however,
that if the foregoing shall cease to be a primary U.S. government
securities dealer in New York City (a "primary treasury dealer"), UST
shall substitute the reference treasury dealer for another primary
treasury dealer; and
- any other primary treasury dealer selected by the trustee after
consultation with UST.
The "comparable treasury price" for any redemption date means the average
of the reference treasury dealer quotations for such redemption date, provided
that if three or more reference treasury dealer quotations are obtained, the
highest and lowest such quotations shall be excluded from the calculation.
The "reference treasury dealer quotations" means, for each reference
treasury dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the comparable
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treasury issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by such reference treasury dealer at 5:00 p.m.
Eastern Standard time on the third business day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the notes to be redeemed.
Unless UST defaults in payment of the redemption price on or after the
redemption date, interest will cease to accrue on the notes called for
redemption.
FLOATING RATE SENIOR NOTES. The floating rate notes will be redeemable in
whole or in part, at the option of UST, at any time, upon not less than 30 days'
notice. The redemption price for the floating rate notes will be equal to the
sum of par plus the present value of 90 basis points discounted from the
maturity date to the redemption date (assuming a 360-day year consisting of
twelve 30-day months) on a quarterly basis at the three-month LIBOR rate, as in
effect on the date such notice is mailed, plus accrued and unpaid interest, if
any, until the redemption date.
In the event that less than all of the floating rate notes are to be
redeemed at any time pursuant to an optional redemption, selection of such
floating rate notes for redemption will be made by the trustee, in compliance
with the requirements of the principal national securities exchange, if any, on
which the floating rate notes are listed or, if the floating rate notes are not
then listed on a national securities exchange, on a pro rata basis, by lot or by
such method as the trustee shall deem fair and appropriate; provided, however,
that no floating rate notes of principal amount of $1,000 or less shall be
redeemed in part. If any floating rate notes are to be redeemed in part only,
the notice of redemption that relates to such floating rate notes shall state
the portion of the principal amount thereof to be redeemed. A floating rate note
in a principal amount equal to the unredeemed portion thereof will be issued in
the name of the holder thereof upon cancellation of the original floating rate
note. On and after the redemption date (unless UST shall default in the payment
of the redemption price and accrued interest), interest will cease to accrue on
floating rate notes or portions thereof called for redemption as long as UST has
deposited with the paying agent for the floating rate notes funds in
satisfaction of the applicable redemption price. If the redemption price is not
so paid upon surrender of the floating rate notes called for redemption, the
principal shall, until paid, bear interest from the redemption date.
LEGAL OWNERSHIP
"STREET NAME" AND OTHER INDIRECT HOLDERS. Investors who hold notes in
accounts at banks or brokers will generally not be recognized by us as legal
holders of notes. This is called holding in "street name". Instead, we would
recognize only the bank or broker, or the financial institution the bank or
broker uses to hold its notes. These intermediary banks, brokers and other
financial institutions pass along principal, interest and other payments on the
notes, either because they agree to do so in their customer agreements or
because they are legally required. If you hold notes in "street name", you
should check with your own institution to find out:
- How it handles note payments and notices.
- Whether it imposes fees or charges.
- How it would handle voting if ever required.
- Whether and how you can instruct it to send you notes registered in your
own name so you can be a direct holder as described below.
- How it would pursue rights under the notes if there were a default or
other event triggering the need for holders to act to protect their
interests.
DIRECT HOLDERS. Our obligations, as well as the obligations of the trustee
and those of any third parties employed by us or the trustee, run only to
persons who are registered as holders of notes. As noted above, we do not have
obligations to you if you hold in "street name" or other indirect means, either
because you
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choose to hold notes in that manner or because the notes are issued in the form
of global notes as described below. For example, once we make payment to the
registered holder, we have no further responsibility for the payment even if
that holder is legally required to pass the payment along to you as a "street
name" customer but does not do so.
GLOBAL NOTES. What is a global note? A global note is a special type of
indirectly held security, as described above under " 'Street Name' and Other
Indirect Holders". For global notes, the ultimate beneficial owners can only be
indirect holders. We do this by requiring that the global note be registered in
the name of a financial institution we select and by requiring that the notes
included in the global note not be transferred to the name of any other direct
holder unless the special circumstances described below occur. The financial
institution that acts as the sole direct holder of the global note is called the
"depositary". Any person wishing to own a note must do so indirectly by virtue
of an account with a broker, bank or other financial institution that in turn
has an account with the depositary.
Special investor considerations for global notes. As an indirect holder, an
investor's rights relating to a global note will be governed by the account
rules of the investor's financial institution and of the depositary, as well as
general laws relating to notes transfers. We do not recognize this type of
investor as a holder of notes and instead deal only with the depositary that
holds the global note.
An investor should be aware that for the notes issued only in the form of
global notes:
- The investor cannot get notes registered in his or her own name.
- The investor cannot receive physical certificates for his or her interest
in the notes.
- The investor will be a "street name" holder and must look to his or her
own bank or broker for payments on the notes and protection of his or her
legal rights relating to the notes. See " 'Street Name' and Other
Indirect Holders".
- The investor may not be able to sell interests in the notes to some
insurance companies and other institutions that are required by law to
own their notes in the form of physical certificates.
- The depositary's policies will govern payments, transfers, exchanges and
other matters relating to the investor's interest in the global note. We
and the trustee have no responsibility for any aspect of the depositary's
actions or for its records of ownership interests in the global note. We
and the trustee also do not supervise the depositary in any way.
- Payment for purchases and sales in the market for corporate bonds and
notes is generally made in next-day funds. In contrast, the depositary
will usually require that interests in a global note be purchased or sold
within its system using same-day funds. This difference could have some
effect on how global note interests trade, but we do not know what that
effect will be.
Special situations when global notes will be terminated. In a few special
situations described later, the global note will terminate and interests in it
will be exchanged for physical certificates representing notes. After that
exchange, the choice of whether to hold notes directly or in "street name" will
be up to the investor. Investors must consult their own bank or brokers to find
out how to have their interests in notes transferred to their own name, so that
they will be direct holders. The rights of "street name" investors and direct
holders in the notes have been previously described in the subsections entitled
" 'Street Name' and Other Indirect Holders" and "Direct Holders".
The special situations for termination of a global note are:
- when the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary;
- when we notify the trustee that we wish to terminate the global note; or
- when an event of default on the notes has occurred and has not been
cured. (Defaults are discussed later under "Events of Default".)
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When a global note terminates, the depositary (and not UST or the trustee)
is responsible for deciding the names of the institutions that will be the
initial direct holders. (Sections 204 and 305 of the Indenture)
IN THE REMAINDER OF THIS DESCRIPTION "YOU" MEANS DIRECT HOLDERS AND NOT
"STREET NAME" OR OTHER INDIRECT HOLDERS OF NOTES. INDIRECT HOLDERS SHOULD READ
THE SUBSECTION ENTITLED "'STREET NAME' AND OTHER INDIRECT HOLDERS".
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- ADDITIONAL MECHANICS relevant to the notes under normal circumstances,
such as how you transfer ownership and where we make payments;
- Your rights to exchange the notes for registered exchange securities
under the terms and conditions provided in the "REGISTRATION COVENANT AND
EXCHANGE OFFER";
- Your rights under several SPECIAL SITUATIONS, such as if we merge with
another company, or if we want to change a term of the notes;
- Promises we make to you about how we will run our business, or business
actions we promise not to take (known as "RESTRICTIVE COVENANTS"); and
- Your rights if we DEFAULT or experience other financial difficulties.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND TRANSFER.
The notes will be issued:
- only in unregistered form;
- without interest coupons; and
- in denominations that are even multiples of $1,000. (Section 302 of the
Indenture)
You may exchange or transfer notes at the office of the trustee. The
trustee acts as our agent for registering notes in the names of holders and
transferring notes. We may change this appointment to another entity or perform
it ourselves. The entity performing the role of maintaining the list of
registered holders is called the "security registrar". It will also perform
transfers. (Section 305) You will not be required to pay a service charge to
transfer or exchange notes, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange will only be made if the security registrar is satisfied with your
proof of ownership.
We may cancel the designation of any particular transfer agent. We may also
approve a change in the office through which any transfer agent acts. (Section
1002 of the Indenture)
If we redeem less than all of the notes, we may block the transfer or
exchange of notes during the period beginning 15 days before the day we mail the
notice of redemption and ending on the day of that mailing, in order to freeze
the list of holders to prepare the mailing. We may also refuse to register
transfers or exchanges of notes selected for redemption, except that we will
continue to permit transfers and exchanges of the unredeemed portion of any
notes being partially redeemed. (Section 305 of the Indenture)
PAYMENT AND PAYING AGENTS
We will pay interest to you if you are a direct holder listed in the
trustee's records of 7.25% notes semi-annually at the close of business on May
15 and November 15, or if you are a holder of floating rate
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notes at the close of business on February 15, May 15, August 15 and November
15, prior to the payment date, even if you no longer own the notes on the
interest due date. This date is called the "regular record date". (Section 307
of the Indenture)
Holders buying and selling notes must work out between them how to
compensate for the fact that we will pay all the interest for an interest period
to the one who is the registered holder on the regular record date. The most
common manner is to adjust the sales price of the notes to pro-rate interest
fairly between buyer and seller. This pro-rated interest amount is called
"accrued interest".
We will pay interest, principal and any other money due on the notes at the
corporate trust office of the trustee in Boston. That office is currently
located at Two International Place, Boston, Massachusetts 02110. You must make
arrangements to have your payments picked up at or wired from that office. We
may also choose to pay interest by mailing checks.
"STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR
BROKERS FOR INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS.
We may also arrange for additional payment offices, and may cancel or
change these offices, including our use of the trustee's corporate trust office.
These offices are called "paying agents". We may also choose to act as our own
paying agent. We must notify you of changes in the paying agents for any
particular series of notes. (Section 1002 of the Indenture)
NOTICES
We and the trustee will send notices regarding the notes only to direct
holders, using their addresses as listed in the trustee's records. (Sections 101
and 106 of the Indenture)
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
direct holders will be repaid to us. After that two-year period, you may look
only to us for payment and not to the trustee, any other paying agent or anyone
else. (Section 1003 of the Indenture)
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS. We are generally permitted to consolidate or
merge with another company or firm. We are also permitted to sell substantially
all of our assets to another firm, or to buy substantially all of the assets of
another firm. We may not, however, take any of these actions unless all of the
following conditions are met:
- Where we merge out of existence or sell our assets, the other firm may
not be organized under a foreign country's laws (that is, it must be a
corporation, partnership or trust organized under the laws of a State of
the United States or the District of Columbia or under federal United
States law), and it must agree to be legally responsible for the notes.
- The merger, sale of assets or other transaction must not cause a default
on the notes, and we must not already be in default (unless the merger or
other transaction would cure the default). For purposes of this
no-default test, a default would include an event of default that has
occurred and not been cured, as described later on page 35 under "What Is
An Event Of Default?". A default for this purpose would also include any
event that would be an event of default if the requirements for giving us
default notice or for our default having to exist for a specific period
of time were disregarded.
- It is possible that the merger, sale of assets or other transaction would
cause some of our property to become subject to a mortgage or other legal
mechanism giving lenders preferential rights in that property over other
lenders or over our general creditors if we fail to pay them back. We
have promised to limit these preferential rights in our property, called
"liens", as discussed later on page 33 under "Covenants -- Restrictions
on Liens". If a merger or other transaction would create any liens on our
property, we must comply with that restrictive covenant. We would do this
either
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by deciding that the liens were permitted, or by following the
requirements of the restrictive covenant to grant an equivalent or
higher-ranking lien on the same property to you and the other direct
holders of the notes. (Section 801 of the Indenture)
MODIFICATION AND WAIVER
There are three types of changes we can make to the indenture and the
notes:
- CHANGES REQUIRING YOUR APPROVAL. First, the following is a list of the
types of changes that cannot be made to the notes without your approval:
- change the stated maturity of the principal or interest on a private
note;
- reduce any amounts due on a private note;
- reduce the amount of principal payable upon acceleration of the maturity
of a private note following a default;
- change the place or currency of payment on a private note;
- impair your right to sue for payment;
- reduce the percentage of holders of notes whose consent is needed to
modify or amend the indenture;
- reduce the percentage of holders of notes whose consent is needed to
waive compliance with certain provisions of the indenture or to waive
certain defaults; and
- modify any other aspect of the provisions dealing with modification and
waiver of the indenture. (Section 902 of the Indenture)
- CHANGES REQUIRING A MAJORITY VOTE. The second type of change to the
indenture and the notes is the kind that requires a vote in favor by
holders of notes owning a majority of the principal amount of the
particular series affected. Most changes fall into this category, except
for clarifying changes and certain other changes that would not adversely
affect holders of the notes. The same vote would be required for us to
obtain a waiver of all or part of the restrictive covenants described
later on this page, or a waiver of a past default. However, we cannot
obtain a waiver of a payment default or any other aspect of the indenture
or the notes listed in the first category described previously above
under "Changes Requiring Your Approval" unless we obtain your individual
consent to the waiver. (Section 513 of the Indenture)
- CHANGES NOT REQUIRING APPROVAL. The third type of change does not require
any vote by holders of notes. This type is limited to clarifications and
certain other changes that would not adversely affect holders of the
notes.
Notes will not be considered outstanding, and therefore will not be
eligible to vote, if we have deposited or set aside in trust for you money for
their payment or redemption. Notes will also not be eligible to vote if they
have been fully defeased as described under "Full Defeasance". (Section 101 of
the Indenture)
We will generally be entitled to set any day as a record date for the
purpose of determining the holders of outstanding securities that are entitled
to vote or take other action under the indenture. In certain limited
circumstances, the trustee will be entitled to set a record date for action by
holders. If we or the trustee set a record date for a vote or other action to be
taken by holders of a particular series, that vote or action may be taken only
by persons who are holders of Outstanding Securities of that series on the
record date and must be taken within 180 days following the record date or a
shorter period that we may specify (or as the trustee may specify, if it set the
record date). We may shorten or lengthen (but not beyond 180 days) this period
from time to time. (Section 104 of the Indenture)
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"STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR
BROKERS FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE SEEK TO
CHANGE THE INDENTURE OR THE NOTES OR REQUEST A WAIVER.
COVENANTS
In the indenture, we agree to restrictions that limit our own as well as
our subsidiaries' ability to create liens or enter into sale and leaseback
transactions.
RESTRICTIONS ON LIENS. Some of our property or assets may be subject to a
mortgage or other legal mechanism that gives our lenders preferential rights in
that property or assets over other lenders (including you and the other direct
holders of the notes) or over our general creditors if we fail to pay them back.
These preferential rights are called "liens". We promise that we will not become
obligated on any new debt that is secured by a lien on any of our real
properties or material manufacturing facilities located in the United States,
referred to below as our "principal properties," or on any shares of stock or
debt of any of our domestic subsidiaries, unless we grant an equivalent or
higher-ranking lien on the same principal properties to you and the other direct
holders of the notes.
We do not need to comply with this restriction if the amount of all debt
that would be secured by liens on principal properties (including the new debt,
the notes which we would so secure as described in the previous sentence, and
all "attributable debt", as described under "Restriction on Sales and
Leasebacks" below, that results from a sale and leaseback transaction involving
our property or assets) is less than 10% of our consolidated net tangible
assets.
This restriction on liens does not apply to debt secured by certain types
of liens, and we can disregard this debt when we calculate the limits imposed by
this restriction. These types of liens are liens on the principal properties of
any of our domestic subsidiaries, or on their shares of stock or debt, if those
liens existed at the time the corporation became our domestic subsidiary, liens
in favor of us or our domestic subsidiaries, liens in favor of U.S. Governmental
bodies that we granted in order to assure our payments to such bodies that we
owe by law or because of a contract we entered into, and liens on property that
existed at the time we acquired the property (including property we may acquire
through a merger or similar transaction) or that we granted in order to purchase
the property (sometimes called "purchase money mortgages"). We can also
disregard debt secured by liens that extend, renew or replace any of these types
of liens.
We and our subsidiaries are permitted to have as much unsecured debt as we
may choose.
RESTRICTIONS ON SALES AND LEASEBACKS. We promise that neither we nor any of
our domestic subsidiaries will enter into any sale and leaseback transaction
involving our principal properties, unless we comply with this restrictive
covenant. A "sale and leaseback transaction" generally is an arrangement between
us or a domestic subsidiary and a bank, insurance company or other lender or
investor where we or the domestic subsidiary lease a property which was or will
be sold by us or the domestic subsidiary to that lender or investor more than
120 days after the completion of construction and the beginning of its full
operation.
We can comply with this restrictive covenant in either of two different
ways. First, we will be in compliance if we or our domestic subsidiary could
grant a lien on the property in an amount equal to the attributable debt for the
sale and leaseback transaction without being required to grant an equivalent or
higher-ranking lien to you and the other direct holders of the notes under the
restriction on liens described above. Second, we can comply if we retire an
amount of funded debt, within 120 days of the transaction, equal to at least the
net proceeds of the sale of the principal property that we lease in the
transaction or the fair value of that principal property (subject to credits for
certain voluntary retirements of notes and funded debt we may make), whichever
is greater.
This restriction on sales and leasebacks does not apply to any sale and
leaseback transaction that is between us and one of our domestic subsidiaries or
between domestic subsidiaries, or that involves a lease for a period of three
years or less.
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CERTAIN DEFINITIONS RELATING TO OUR RESTRICTIVE COVENANTS. Following are
the meanings of the terms that are important in understanding the restrictive
covenants previously described.
"Attributable debt" means the total net amount of rent (discounted at 10%
per annum compounded annually) that is required to be paid during the remaining
term of any lease.
"Consolidated net tangible assets" is the total amount of assets (less
reserves and certain other permitted deductible items), after subtracting all
current liabilities and all goodwill, trade names, trademarks, patents,
unamortized debt discounts and expenses and similar intangible assets, as such
amounts appear on our most recent consolidated balance sheet and computed in
accordance with generally accepted accounting principles.
A "domestic subsidiary" means any of our subsidiaries except one which does
not transact a substantial portion of its business in the United States or does
not regularly keep a substantial portion of its assets (other than intangible
assets) in the United States, or one that is used primarily to finance our
operations outside of the United States. A "subsidiary" is a corporation in
which we and/or one or more of our other subsidiaries owns at least 50% of the
voting stock, which is a kind of stock that ordinarily permits its owners to
vote for the election of directors.
"Funded debt" means all debt for borrowed money that either has a maturity
of 12 months or more from the date on which the calculation of funded debt is
made or has a maturity of less than 12 months from that date but is by its terms
renewable or extendible beyond 12 months from that date at the option of the
borrower.
DEFEASANCE
FULL DEFEASANCE. If there is a change in federal tax law, as described
below, we can legally release ourselves from any payment or other obligations on
the notes (called "full defeasance") if we put in place the following other
arrangements for you to be repaid:
- We must deposit in trust for your benefit and the benefit of all other
direct holders of the notes a combination of money and U.S. government or
U.S. government agency notes or bonds that will generate enough cash to
make interest, principal and any other payments on the notes on their
various due dates.
- There must be a change in current federal tax law or an IRS ruling that
lets us make the above deposit without causing you to be taxed on the
notes any differently than if we did not make the deposit and just repaid
the notes ourselves. (Under current federal tax law, the deposit and our
legal release from the notes would be treated as though we took back your
notes and gave you your share of the cash and notes or bonds deposited in
trust. In that event, you could recognize gain or loss on the notes you
give back to us.)
- We must deliver to the trustee a legal opinion of our counsel confirming
the tax law change described above. (Sections 1302 and 1304 of the
Indenture)
- If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the notes. You
could not look to us for repayment in the unlikely event of any
shortfall. Conversely, the trust deposit would most likely be protected
from claims of our lenders and other creditors if we ever become bankrupt
or insolvent.
COVENANT DEFEASANCE. Under current federal tax law, we can make the same
type of deposit described above and be released from some of the restrictive
covenants in the notes. This is called "covenant defeasance". In that event, you
would lose the protection of those restrictive covenants but would gain the
protection of having money and notes set aside in trust to repay the notes. In
order to achieve covenant defeasance, we must do the following:
- We must deposit in trust for your benefit and the benefit of all other
direct holders of the notes a combination of money and U.S. government or
U.S. government agency notes or bonds that will
26
<PAGE> 32
generate enough cash to make interest, principal and any other payments
on the notes on their various due dates.
- We must deliver to the trustee a legal opinion of our counsel confirming
that under current federal income tax law we may make the above deposit
without causing you to be taxed on the notes any differently than if we
did not make the deposit and just repaid the notes ourselves.
If we accomplish covenant defeasance, the following provisions of the
indenture and the notes would no longer apply:
- Our promises regarding conduct of our business previously described under
"Covenants," and any other covenants applicable to the series of notes
and described in this prospectus.
- The condition regarding the treatment of liens when we merge or engage in
similar transactions, as previously described under "Mergers and Similar
Events".
- The events of default relating to breach of covenants and acceleration of
the maturity of other debt, described under "What Is An Event Of
Default?".
If we accomplish covenant defeasance, you can still look to us for
repayment of the notes if there were a shortfall in the trust deposit. In fact,
if one of the remaining events of default occurred (such as our bankruptcy) and
the notes become immediately due and payable, there may be such a shortfall.
Depending on the event causing the default, you may not be able to obtain
payment of the shortfall. (Sections 1303 and 1304 of the Indenture)
DEFAULT AND RELATED MATTERS
RANKING
The notes are not secured by any of our property or assets. Accordingly,
your ownership of notes means you are one of UST's unsecured creditors. The
notes are not subordinated to any of UST's other debt obligations and therefore
they rank equally with all of UST's other unsecured and unsubordinated
indebtedness.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
WHAT IS AN EVENT OF DEFAULT? The term "event of default" means any of the
following:
- we do not pay the principal or any premium on a note on its due date;
- we do not pay interest on a note within 30 days of its due date;
- we do not deposit any sinking fund payment on its due date;
- we remain in breach of a restrictive covenant or any other term of the
indenture for 60 days after we receive a notice of default stating we are
in breach. The notice must be sent by either the trustee or holders of
10% of the principal amount of notes of the affected series;
- other debt of ours totaling $10,000,000 or more defaults, our obligation
to repay it is accelerated by our lenders, and this repayment obligation
remains accelerated for 10 days after we receive a notice of default as
described in the previous paragraph; or
- we file for bankruptcy or certain other events in bankruptcy, insolvency
or reorganization occur.
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an event of default has occurred
and has not been cured, the trustee or the holders of 25% in principal amount of
the notes of the affected series may declare the entire principal amount of all
the notes of that series to be due and immediately payable. This is called a
27
<PAGE> 33
declaration of acceleration of maturity. If an event of default occurs because
of certain events in bankruptcy, insolvency or reorganization, the principal
amount of all notes of that series will be automatically accelerated, without
any action by the trustee or any holder. A declaration of acceleration of
maturity may be canceled by the holders of at least a majority in principal
amount of the notes of the affected series. (Section 402 of the Indenture)
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the holders offer the trustee reasonable protection from
expenses and liability (called an "indemnity"). (Section 603 of the Indenture).
If reasonable indemnity is provided, the holders of a majority in principal
amount of the outstanding notes of the relevant series may direct the time,
method and place of conducting any lawsuit or other formal legal action seeking
any remedy available to the trustee. These majority holders may also direct the
trustee in performing any other action under the indenture. (Section 512 of the
Indenture).
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the notes, the following must occur:
- you must give the trustee written notice that an event of default has
occurred and remains uncured;
- the holders of 25% in principal amount of all outstanding securities of
the relevant series must make a written request that the trustee take
action because of the default, and must offer reasonable indemnity to the
trustee against the cost and other liabilities of taking that action; and
- the trustee must have not taken action for 60 days after receipt of the
above notice and offer of indemnity. (Section 507 of the Indenture)
You are, however, entitled at any time to bring a lawsuit for the payment
of money due on your notes on or after its due date. (Section 508 of the
Indenture)
"STREET NAME" AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR
BROKERS FOR INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION TO OR MAKE A REQUEST
OF THE TRUSTEE AND TO MAKE OR CANCEL A DECLARATION OF ACCELERATION.
We will furnish to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
indenture and the notes, or else specifying any default. (Section 1004 of the
Indenture)
REGARDING THE TRUSTEE
The trustee's current address is State Street Bank and Trust Company,
Corporate Trust Division, Two International Place, Boston, MA 02110.
The indenture provides that, except during the continuance of an event of
default, the trustee will perform only such duties as are specifically set forth
in the indenture. During the existence of an event of default, the trustee will
exercise such rights and powers vested in its exercise as a prudent person would
exercise under the circumstances in the conduct of such person's own affairs.
(Section 601 of the Indenture)
The indenture and provisions of the Trust Indenture Act incorporated by
reference therein contain limitations on the rights of the trustee, should it
become a creditor of the company, to obtain payment of claims in certain cases
or to realize on certain property received by it in respect of any such claim as
security or otherwise. The trustee is permitted to engage in other transactions
with the company or any affiliate. If it acquires any conflicting interest (as
defined in the Indenture or in the Trust Indenture Act), it must eliminate such
conflict or resign. (Sections 608 and 613 of the Indenture)
28
<PAGE> 34
BOOK-ENTRY; DELIVERY AND FORM
The certificates representing the exchange notes will be issued in fully
registered form. Except as described below, the exchange notes initially will be
represented by one or more global notes, in definitive, fully registered form
without interest coupons. The global notes will be deposited with the trustee as
custodian for DTC and registered in the name of Cede & Co. or another nominee as
DTC may designate.
DTC has advised us as follows:
- DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a
"clearing agency" registered pursuant to the provision of Section 17A of
the Exchange Act.
- DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and other organizations.
Indirect access to the DTC system is available to others, including
banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly.
- Upon the issuance of the global notes, DTC or its custodian will credit,
on its internal system, the respective principal amounts of the exchange
notes represented by the global notes to the accounts of persons who have
accounts with DTC. Ownership of beneficial interests in the global notes
will be limited to persons who have accounts with DTC or persons who hold
interests through the persons who have accounts with DTC. Persons who
have accounts with DTC are referred to as "participants." Ownership of
beneficial interests in the global notes will be shown on, and the
transfer of that ownership will be effected only through, records
maintained by DTC or its nominee, with respect to interests of
participants, and the records of participants, with respect to interests
of persons other than participants.
So long as DTC or its nominee is the registered owner or holder of the
global notes, DTC or the nominee, as the case may be, will be considered the
sole record owner or holder of the exchange notes represented by the global
notes for all purposes under the indenture and the exchange notes. No beneficial
owners of an interest in the global notes will be able to transfer that interest
except according to DTC's applicable procedures, in addition to those provided
for under the indenture. Owners of beneficial interests in the global notes will
not:
- be entitled to have the exchange notes represented by the global notes
registered in their names,
- receive or be entitled to receive physical delivery of certificated notes
in definitive form, and
- be considered to be the owners or holders of any exchange notes under the
global notes.
Accordingly, each person owning a beneficial interest in the global notes must
rely on the procedures of DTC and, if a person is not a participant, on the
procedures of the participant through which that person owns its interests, to
exercise any right of a holder of exchange notes under the global notes. We
understand that under existing industry practice, in the event an owner of a
beneficial interest in the global notes desires to take any action that DTC, as
the holder of the global notes, is entitled to take, DTC would authorize the
participants to take that action, and that the participants would authorize
beneficial owners owning through the participants to take that action or would
otherwise act upon the instructions of beneficial owners owning through them.
Payments of the principal of, premium, if any, and interest on the exchange
notes represented by the global notes will be made to DTC or its nominee, as the
case may be, as the registered owner of the
29
<PAGE> 35
global notes. Neither we, the trustee, nor any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global notes
or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
of, premium, if any, or interest on the global notes will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
ownership interests in the principal amount of the global notes, as shown on the
records of DTC or its nominee. We also expect that payments by participants to
owners of beneficial interests in the global notes held through these
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in the names of nominees for these customers. These payments will be the
responsibility of these participants.
Transfer between participants in DTC will be effected in the ordinary way
in accordance with DTC rules. If a holder requires physical delivery of notes in
certificated form for any reason, including to sell notes to persons in states
which require the delivery of the notes or to pledge the notes, a holder must
transfer its interest in the global notes in accordance with the normal
procedures of DTC and the procedures set forth in the indenture.
Unless and until they are exchanged in whole or in part for certificated
exchange notes in definitive form, the global notes may not be transferred
except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC.
Beneficial owners of exchange notes registered in the name of DTC or its
nominee will be entitled to be issued, upon request, exchange notes in
definitive certificated form.
DTC has advised us that DTC will take any action permitted to be taken by a
holder of notes, including the presentation of notes for exchange as described
below, only at the direction of one or more participants to whose account the
DTC interests in the global notes are credited. Further, DTC will take any
action permitted to be taken by a holder of notes only in respect of that
portion of the aggregate principal amount of notes as to which the participant
or participants has or have given that direction.
Although DTC has agreed to these procedures in order to facilitate
transfers of interests in the global notes among participants of DTC, it is
under no obligation to perform these procedures, and may discontinue them at any
time. Neither we nor the trustee will have any responsibility for the
performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
Subject to specified conditions, any person having a beneficial interest in
the global notes may, upon request to the trustee, exchange the beneficial
interest for exchange notes in the form of certificated notes. Upon any issuance
of certificated notes, the trustee is required to register the certificated
notes in the name of, and cause the same to be delivered to, the person or
persons, or the nominee of these persons. In addition, if DTC is at any time
unwilling or unable to continue as a depositary for the global notes, and a
successor depositary is not appointed by us within 90 days, we will issue
certificated notes in exchange for the global notes.
30
<PAGE> 36
PLAN OF DISTRIBUTION
Each broker-dealer that receives notes for its own account in the exchange
offer must acknowledge that it will deliver a prospectus in connection with any
resale of those notes. This prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales of
notes received in the exchange offer where the outstanding notes were acquired
as a result of market-making activities or other trading activities. We have
agreed that, for a period of 180 days after the consummation of the exchange
offer, we will make this prospectus, as amended and supplemented, available to
any broker-dealer for use in connection with any such resale. In addition, until
, 1999, all dealers effecting transactions in the notes issued in
the exchange offer may be required to deliver a prospectus.
We will not receive any proceeds from any sale of notes by broker-dealers.
Notes received by broker-dealers for their own account in the exchange offer may
be sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the notes
or a combination of such methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or at
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer or the purchasers of any
such notes. Any broker-dealer that resells notes that were received by it for
its own account in the exchange offer and any broker or dealer that participates
in a distribution of such notes may be deemed to be an "underwriter" within the
meaning of the Securities Act, and profit on any such resale of notes issued in
the exchange and any commission or concessions received by any such persons
maybe deemed to be underwriting compensation under the Securities Act. The
letter of transmittal states that, by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after this registration statement is declared
effective, we will promptly send additional copies of this prospectus and any
amendment or supplement to this prospectus to any broker-dealer that requests
such documents in the letter of transmittal. we have agreed to pay all expenses
incident to the exchange offer, including the expenses of one counsel for the
holders of the notes, other than the commissions or concessions of any
broker-dealers and will indemnify the holders of the notes, including any
broker-dealers, against certain liabilities, including liabilities under the
Securities Act. We note, however, that, in the opinion of the SEC,
indemnification against liabilities arising under federal securities laws is
against public policy and may be unenforceable.
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<PAGE> 37
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a summary of material U.S. federal income tax consequences
associated with the exchange of outstanding notes for new notes to be issued in
the exchange offer and the ownership, and disposition of those new notes
applicable to you if you acquired the outstanding notes in the initial offering
and, for U.S. federal income tax purposes, you are not a "United States person"
as defined below (a "Non-U.S. Holder"). This summary is based upon current U.S.
federal income tax laws, regulations, rulings, and judicial decisions, all of
which are subject to change, possibly with retroactive effect. This summary does
not discuss all aspects of U.S. federal income taxation which may be important
to you in light of your individual investment circumstances, for example, if you
are an investor subject to special tax rules (e.g., banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, traders in securities that elect to use a
mark-to-market method of securities holdings, expatriates and tax-exempt
investors) or if you will hold notes as a position in a "straddle," as part of a
"synthetic security" or "hedge," as part of a "conversion transaction" or other
integrated investment, or as other than a capital asset. In addition, this
summary does not address any aspect of state, local, or foreign taxation.
The exchange of outstanding notes for the notes issued in the exchange
offer will not be treated as an "exchange" for United States federal income tax
purposes because the notes issued in the exchange offer will not differ
materially in kind or extent from the outstanding notes. Rather, the notes
received by a holder in the exchange offer will be treated as a continuation of
the outstanding notes in the hands of the exchanging holder. As a result, there
will be no U.S. federal income tax consequences to holders exchanging their
outstanding notes for notes issued in the exchange offer. In addition, any
exchanging holder of outstanding notes will have the same adjusted tax basis and
holding period in the notes issued in the exchange offer as such holder in the
outstanding notes immediately prior to the exchange.
YOU ARE ADVISED TO CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE
PARTICULAR TAX CONSEQUENCES TO YOU OF THE ACQUISITION, OWNERSHIP, SALE OR OTHER
DISPOSITION OF NOTES IN LIGHT OF YOUR PARTICULAR TAX AND INVESTMENT SITUATION
AND THE PARTICULAR FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS APPLICABLE TO YOU.
For purposes of this summary, a "United States person" means a beneficial
owner of a note that is for U.S. federal income tax purposes:
- an individual, who is a citizen or resident of the United States for U.S.
federal income tax purposes;
- a corporation, partnership or other entity created or organized in the
United States or under the laws of the United States or any state,
including the District of Columbia;
- an estate, the income of which is includable in gross income for U.S.
federal income tax purposes regardless of its source; or
- a trust, if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United
States persons have the authority to control all substantial decisions of
such trust.
A "Non-U.S. Holder" means a holder of a note that is not a U.S. Holder. The
following summary applies to you only if you are a Non-U.S. Holder.
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<PAGE> 38
PAYMENTS OF INTEREST
Subject to the discussion of backup withholding below, payments of interest
on a note to you generally will not be subject to U.S. federal income or
withholding tax, provided that
(1) you
- do not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of UST entitled to
vote, and
- are not a controlled foreign corporation that is related to UST
actually or constructively through stock ownership for United
States Federal income tax purposes;
(2) such interest payments are not effectively connected with the
conduct by you of a trade or business within the United States; and
(3) we or our paying agent receives
- from you, a properly completed Form W-8 (or substitute Form W-8)
signed under penalties of perjury which provides your name and
address and certifies that you are a Non-U.S. Holder, or
- from a security clearing organization, bank or other financial
institution that holds the notes in the ordinary course of its
trade or business (a "financial institution") on behalf of you,
certification under penalties of perjury that such Form W-8 (or
substitute Form W-8) has been received by it, or by another such
financial institution, from you, and a copy of the Form W-8 (or
substitute Form W-8) is furnished to us or our paying agent.
If you do not qualify for an exemption from withholding under the preceding
paragraph, you generally will be subject to withholding of U.S. federal income
tax at the rate of 30% (or a lower rate if a treaty applies) when you receive
payments of interest on the notes.
If you are engaged in a trade or business in the United States and interest
on the notes is effectively connected with the conduct of such trade or
business, you will not be subject to a withholding tax (assuming proper
certification is provided) but will be subject to U.S. federal income tax on
such interest on a net income basis in the same manner as if you were a U.S.
person. In addition, if you are a foreign corporation, you may be subject to a
branch profits tax at a 30% rate (or, if applicable, a lower rate specified by a
treaty).
SALE, EXCHANGE OR REDEMPTION OF NOTES
Subject to the discussion concerning backup withholding, any gain realized
by you on the sale, exchange, retirement or other disposition of a note
generally will not be subject to a U.S. federal income tax, unless (1) such gain
is effectively connected with the conduct by you of a trade of business within
the United States, or (2) you are an individual who is present in the United
States for 183 days or more in the taxable year of the disposition and certain
other conditions are satisfied. Any such gain that is effectively connected with
the conduct of a United States trade or business by you will be subject to
United States Federal income tax on a net income basis in the same manner as if
you were a United States person and, if you are a corporation, such gain may
also be subject to the 30% United States branch profits tax described above.
FEDERAL ESTATE TAXES
If you are an individual who at the time of death is not a citizen or
resident of the United States, the note held by you at the time of your death
will not be subject to United States Federal estate tax, provided that (1) you
do not actually or constructively own 10% or more of the total combined voting
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<PAGE> 39
power of all classes of stock of UST entitled to vote and (2) the interest
accrued on the note was not effectively connected with your conduct of a United
States trade or business.
BACKUP WITHHOLDING
Backup withholding and information reporting generally will not apply to
payments made to you if you provide the certification described above or
otherwise establish an exemption from backup withholding. Payments by a United
States office of a broker of the proceeds of a disposition of the notes
generally will be subject to backup withholding at a rate of 31% unless you
certify that you are a Non-U.S. Holder under penalties of perjury or otherwise
establish an exemption. Payments of the proceeds of a disposition of the notes
by or through a foreign office of a United States broker or foreign broker with
certain relationships to the United States generally will be subject to
information reporting, but not backup withholding.
Any amount withheld from a payment to you under the backup withholding
rules is allowable as a credit against your U.S. federal income tax liability,
or if withholding results in an overpayment of taxes, a refund may be obtained,
provided that the required information is furnished to the IRS. Certain holders
(including, among others, corporations and foreign individuals who comply with
certain certification requirements) are not subject to backup withholding.
NEW WITHHOLDING REGULATIONS
The U.S. Treasury Department issued final Treasury regulations ("New
Withholding Regulations") governing information reporting and the certification
procedures regarding withholding and backup withholding on certain amounts paid
to Non-U.S. Holders after December 31, 2000. The new Treasury regulations
generally will not alter the treatment of Non-U.S. Holders described above. The
new Treasury regulations will alter the procedures for claiming the benefits of
an income tax treaty and may change the certification procedures relating to the
receipt by intermediaries of payments on behalf of a beneficial owner of a note.
You should consult your tax advisor concerning the effect, if any, of such New
Withholding Regulations on an investment in the notes.
LEGAL MATTERS
The validity of the notes being offered hereby will be passed upon for UST
by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
EXPERTS
The consolidated financial statements of UST Inc. incorporated by reference
in UST Inc.'s Annual Report (Form 10-K) for the year ended December 31, 1998,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated by reference therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein by
reference in reliance on such report given upon the authority of such firm as
experts in accounting and auditing.
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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST
NOT RELY ON ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS
DOES NOT OFFER TO SELL OR ASK FOR OFFERS TO BUY ANY SECURITIES OTHER THAN THOSE
TO WHICH THIS PROSPECTUS RELATES AND IT DOES NOT CONSTITUTE AN OFFER TO SELL OR
ASK FOR OFFERS TO BUY ANY OF THE SECURITIES IN ANY JURISDICTION WHERE IT IS
UNLAWFUL, WHERE THE PERSON MAKING THE OFFER IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON WHO CANNOT LEGALLY BE OFFERED THE SECURITIES. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
UNTIL , 1999, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS EXCHANGE OFFER, MAY BE REQUIRED
TO DELIVER A PROSPECTUS.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Where You Can Find More Information.... i
Forward-looking Statements............. i
Trademarks and Trade Names............. ii
Prospectus Summary..................... 1
Risk Factors........................... 6
Use of Proceeds........................ 8
Ratio of Earnings to Fixed Charges..... 8
The Exchange Offer..................... 9
Description of Notes................... 17
Book-Entry; Delivery and Form.......... 29
Plan of Distribution................... 31
Material Federal Income Tax
Consequences......................... 32
Legal Matters.......................... 34
Experts................................ 34
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
$240,000,000
[LOGO]
OFFER FOR ALL OUTSTANDING
7.25 SENIOR NOTES DUE 2009
AND
FLOATING RATE SENIOR NOTES DUE 2009
IN EXCHANGE FOR
7.25 SENIOR NOTES DUE 2009
AND
FLOATING RATE SENIOR NOTES DUE 2009
WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OF
UST INC.
---------------------
PROSPECTUS
---------------------
, 1999
------------------------------------------------------
------------------------------------------------------
<PAGE> 41
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS
As authorized by Section 145 of the General Corporations Law of the State
of Delaware, each director and officer of the registrant may be indemnified by
the registrant against expenses (including attorney's fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred in connection with
the defense or settlement of any threatened, pending or completed legal
proceedings in which he is involved by reason of the fact that he is or was a
director or officer of the registrant if he acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interest of the
registrant and, with respect with respect to any criminal action or proceeding,
if he had no reasonable cause to believe that his conduct was unlawful. If the
legal proceeding, however, is by or in the right of the registrant, the director
or officer may not be indemnified in respect of any claim, issue or matter as to
which he shall have been adjudged to be liable for negligence or misconduct in
the performance of his duty to the registrant unless a court determines
otherwise. The registrant's certificate of incorporation, which is filed as an
exhibit to this registration statement, contains provisions authorizing such
indemnity.
Article VII of the registrant's by-laws, which are filed as an exhibit to
this registration statement, authorize the registrant to indemnify its present
and former directors and to pay or reimburse these individuals for fees and
expenses in advance of a final disposition of a proceeding upon receipt of an
undertaking by or on behalf of such individuals to repay such amounts if so
required.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
1.1** -- Purchase Agreement, dated May 25, 1999, by and among
Registrant and Goldman Sachs & Co., Morgan Stanley & Co.,
Incorporated and Fleet Securities, Inc.
3.1 -- Restated Certificate of Incorporation dated May 5, 1992,
incorporated by reference to Exhibit 3.1 to Form 10-Q for
the quarter ended March 31, 1992.
3.2 -- By-Laws adopted on December 23, 1986, and amended and
restated effective October 22, 1998, incorporated by
reference to Exhibit 3.2 to Form 10-Q for the quarter
ended September 30, 1998.
4.1 -- Indenture, dated as of May 27, 1999, between UST Inc. and
State Street Bank and Trust Company, incorporated by
reference to Exhibit 4 to Form 10-Q for the quarter ended
June 30, 1999.
4.2** -- Form of certificate of 7.25% Senior Note.
4.3** -- Form of certificate of Floating Rate Senior Note.
4.4** -- Exchange and Registration Rights Agreement, dated as of
May 27, 1999, by and among Registrant, Goldman Sachs &
Co., Morgan Stanley & Co., Incorporated and Fleet
Securities, Inc.
5.1** -- Form of opinion and consent of Skadden, Arps, Slate,
Meagher & Flom LLP as to the legality of the notes to be
issued by UST Inc. in the Exchange Offer.
10.1* -- Form of Employment Agreement entered into on July 23,
1987 between Registrant and Vincent A. Gierer, Jr., an
Executive Officer, incorporated by reference to Exhibit
10.1 to Form 10-Q for the quarter ended September 30,
1986.
10.2* -- Form of Severance Agreement dated October 27, 1986
between Registrant and certain officers incorporated by
reference to Exhibit 10.2 to Form 10-Q for the quarter
ended September 30, 1986.
10.3* -- 1982 Stock Option Plan restated as of March 22, 1989,
incorporated by reference to Exhibit 4.1 to Form S-8
Registration Statement filed on April 14, 1989.
</TABLE>
II-1
<PAGE> 42
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
10.4* -- 1992 Stock Option Plan, as amended and restated as of
December 12, 1996, incorporated by reference to Exhibit
10.6 to Form 10-K for the fiscal year ended December 31,
1996.
10.5* -- Incentive Compensation Plan, as amended and restated as
of January 1, 1996, incorporated by reference to Exhibit
10.7 to Form 10-K for the fiscal year ended December 31,
1996.
10.6* -- Amendment to Incentive Compensation Plan, effective
September 25, 1997, incorporated by reference to Exhibit
10.6 to Form 10-K for the fiscal year ended December 31,
1997.
10.7* -- Officers' Supplemental Retirement Plan, as restated as of
December 1, 1992, incorporated by reference to Exhibit
10.7 to Form 10-K for the fiscal year ended December 31,
1992.
10.8* -- Nonemployee Directors' Retirement Plan, as amended and
restated as of January 1, 1998, incorporated by reference
to Exhibit 10.8 to Form 10-K for the period ended
December 31, 1997.
10.9 -- Directors' Supplemental Medical Plan, as amended and
restated as of February 16, 1995, incorporated by
reference to Exhibit 10.10 to Form 10-K for the fiscal
year ended December 31, 1994.
10.10* -- Nonemployee Directors' Stock Option Plan effective May 2,
1995, incorporated by reference to Exhibit A to 1995
Notice of Annual Meeting and Proxy Statement dated March
24, 1995.
10.11* -- Nonemployee Directors' Restricted Stock Award Plan
effective January 1, 1999, incorporated by reference to
Exhibit 10.11 to Form 10-K for the fiscal year ended
December 31, 1998.
12.1** -- Statement re: Computation of Ratio of Earnings to Fixed
Charges.
21.1 -- Subsidiaries of UST Inc., incorporated by reference to
Exhibit 21 to Form 10-K for the fiscal year ended
December 31, 1998.
23.1** -- Consent of Ernst & Young LLP.
23.2** -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
25.1** -- Form T-1 Statement of Eligibility of State Street Bank
and Trust Company to act as Trustee under the Indenture.
27.1 -- Financial Data Schedule, incorporated by reference to
Exhibit 27 to Form 10-Q for the quarter ended June 30,
1999.
99.1** -- Form of Letter of Transmittal.
99.2** -- Form of Notice of Guaranteed Delivery.
99.3** -- Letter to Brokers.
99.4** -- Letter to Clients.
</TABLE>
- ---------------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 14(c) of the rules governing the preparation
of this Report.
** Filed with this prospectus.
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the notes offered hereby, but only under circumstances and
in
II-2
<PAGE> 43
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officer, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
II-3
<PAGE> 44
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act, Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Greenwich, State of
Connecticut, on the 16th day of August, 1999.
UST Inc.
(Registrant)
By: /s/ VINCENT A. GIERER, JR.
----------------------------------
Vincent A. Gierer, Jr.
Chairman of the Board, Chief
Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ VINCENT A. GIERER, JR. Chairman of the Board, Chief August 16, 1999
- ----------------------------------------------------- Executive Officer and
Vincent A. Gierer, Jr. President (Principal
Executive Officer)
/s/ ROBERT T. D'ALESSANDRO Senior Vice President and August 16, 1999
- ----------------------------------------------------- Controller (Principal
Robert T. D'Alessandro Accounting Officer and
Principal Financial Officer)
/s/ JAMES W. CHAPIN Director August 16, 1999
- -----------------------------------------------------
James W. Chapin
/s/ JOHN P. CLANCEY Director August 16, 1999
- -----------------------------------------------------
John P. Clancey
/s/ EDWARD H. DEHORITY, JR. Director August 16, 1999
- -----------------------------------------------------
Edward H. DeHority, Jr.
/s/ ELAINE J. EISENMAN Director August 16, 1999
- -----------------------------------------------------
Elaine J. Eisenman
/s/ EDWARD T. FOGARTY Director August 16, 1999
- -----------------------------------------------------
Edward T. Fogarty
/s/ VINCENT A. GIERER, JR. Chairman of the Board August 16, 1999
- -----------------------------------------------------
Vincent A. Gierer, Jr.
/s/ P.X. KELLEY Director August 16, 1999
- -----------------------------------------------------
P.X. Kelley
</TABLE>
II-5
<PAGE> 46
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ PETER J. NEFF Director August 16, 1999
- -----------------------------------------------------
Peter J. Neff
/s/ LOWELL P. WEICKER, JR. Director August 16, 1999
- -----------------------------------------------------
Lowell P. Weicker, Jr.
</TABLE>
II-6
<PAGE> 47
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
1.1** -- Purchase Agreement, dated May 25, 1999, by and among
Registrant and Goldman Sachs & Co., Morgan Stanley & Co.,
Incorporated and Fleet Securities, Inc.
3.1 -- Restated Certificate of Incorporation dated May 5, 1992,
incorporated by reference to Exhibit 3.1 to Form 10-Q for
the quarter ended March 31, 1992.
3.2 -- By-Laws adopted on December 23, 1986, and amended and
restated effective October 22, 1998, incorporated by
reference to Exhibit 3.2 to Form 10-Q for the quarter
ended September 30, 1998.
4.1 -- Indenture, dated as of May 27, 1999, between UST Inc. and
State Street Bank and Trust Company, incorporated by
reference to Exhibit 4 to Form 10-Q for the quarter ended
June 30, 1999.
4.2** -- Form of certificate of 7.25% Senior Note.
4.3** -- Form of certificate of Floating Rate Senior Note.
4.4** -- Exchange and Registration Rights Agreement, dated as of
May 27, 1999, by and among Registrant, Goldman Sachs &
Co., Morgan Stanley & Co., Incorporated and Fleet
Securities, Inc.
5.1** -- Form of opinion and consent of Skadden, Arps, Slate,
Meagher & Flom LLP as to the legality of the notes to be
issued by UST Inc. in the Exchange Offer.
10.1* -- Form of Employment Agreement entered into on July 23,
1987 between Registrant and Vincent A. Gierer, Jr., an
Executive Officer, incorporated by reference to Exhibit
10.1 to Form 10-Q for the quarter ended September 30,
1986.
10.2* -- Form of Severance Agreement dated October 27, 1986
between Registrant and certain officers incorporated by
reference to Exhibit 10.2 to Form 10-Q for the quarter
ended September 30, 1986.
10.3* -- 1982 Stock Option Plan restated as of March 22, 1989,
incorporated by reference to Exhibit 4.1 to Form S-8
Registration Statement filed on April 14, 1989.
10.4* -- 1992 Stock Option Plan, as amended and restated as of
December 12, 1996, incorporated by reference to Exhibit
10.6 to Form 10-K for the fiscal year ended December 31,
1996.
10.5* -- Incentive Compensation Plan, as amended and restated as
of January 1, 1996, incorporated by reference to Exhibit
10.7 to Form 10-K for the fiscal year ended December 31,
1996.
10.6* -- Amendment to Incentive Compensation Plan, effective
September 25, 1997, incorporated by reference to Exhibit
10.6 to Form 10-K for the fiscal year ended December 31,
1997.
10.7* -- Officers' Supplemental Retirement Plan, as restated as of
December 1, 1992, incorporated by reference to Exhibit
10.7 to Form 10-K for the fiscal year ended December 31,
1992.
10.8* -- Nonemployee Directors' Retirement Plan, as amended and
restated as of January 1, 1998, incorporated by reference
to Exhibit 10.8 to Form 10-K for the period ended
December 31, 1997.
10.9 -- Directors' Supplemental Medical Plan, as amended and
restated as of February 16, 1995, incorporated by
reference to Exhibit 10.10 to Form 10-K for the fiscal
year ended December 31, 1994.
</TABLE>
<PAGE> 48
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<C> <S>
10.10* -- Nonemployee Directors' Stock Option Plan effective May 2,
1995, incorporated by reference to Exhibit A to 1995
Notice of Annual Meeting and Proxy Statement dated March
24, 1995.
10.11* -- Nonemployee Directors' Restricted Stock Award Plan
effective January 1, 1999, incorporated by reference to
Exhibit 10.11 to Form 10-K for the fiscal year ended
December 31, 1998.
12.1** -- Statement re: Computation of Ratio of Earnings to Fixed
Charges.
21.1 -- Subsidiaries of UST Inc., incorporated by reference to
Exhibit 21 to Form 10-K for the fiscal year ended
December 31, 1998.
23.1** -- Consent of Ernst & Young LLP.
23.2** -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).
25.1** -- Form T-1 Statement of Eligibility of State Street Bank
and Trust Company to act as Trustee under the Indenture.
27.1 -- Financial Data Schedule, incorporated by reference to
Exhibit 27 to Form 10-Q for the quarter ended June 30,
1999.
99.1** -- Form of Letter of Transmittal.
99.2** -- Form of Notice of Guaranteed Delivery.
99.3** -- Letter to Brokers.
99.4** -- Letter to Clients.
</TABLE>
- ---------------
* Management contract or compensatory plan or arrangement required to be filed
as an exhibit pursuant to Item 14(c) of the rules governing the preparation
of this Report.
** Filed with this prospectus.
<PAGE> 1
UST INC.
7.25% SENIOR NOTES DUE JUNE 1, 2009
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
-----------------------
PURCHASE AGREEMENT
May 25, 1999
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Fleet Securities, Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
UST Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the Purchasers
named in Schedule I hereto (the "Purchasers") an aggregate of $200,000,000
principal amount of the 7.25% Senior Notes due June 1, 2009 (the "Fixed Notes")
and $40,000,000 principal amount of the Floating Rate Senior Notes due June 1,
2009 (the "Floating Notes") (the Fixed Notes and the Floating Notes
collectively, the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering circular, dated May 14, 1999 (the
"Preliminary Offering Circular") and an offering circular, dated May
25, 1999 (the "Offering Circular"), each attaching and incorporating
the Company's Annual Report on Form 10-K for the year ended December
31, 1998 (the "10-K"), and the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999 (the "10-Q"), have been prepared
in connection with the offering of the Securities. Any reference to the
Preliminary Offering Circular or the Offering Circular, as the case may
be, shall be deemed to refer to and include the 10-K and the 10- Q
attached thereto. The 10-K and 10-Q conformed in all material respects
to the applicable
<PAGE> 2
requirements of the United States Securities Exchange Act of 1934 (the
"Exchange Act") and the applicable rules and regulations of the United
States Securities and Exchange Commission (the "Commission") when filed
with the Commission. The Preliminary Offering Circular or the Offering
Circular and any amendments or supplements thereto and the 10-K and
10-Q did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by a Purchaser through
Goldman, Sachs & Co. expressly for use therein;
(b) Neither the Company nor any of its "Significant
Subsidiaries" (as such term is defined in Rule 1-02 of Regulation S-X)
has sustained since the date of the latest audited financial statements
included in the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree which would have individually or
in the aggregate, a material adverse effect or prospective material
adverse effect on the financial condition, results of operations or
business of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"), otherwise than as set forth or contemplated
in the Offering Circular; and, since the respective dates as of which
information is given in the Offering Circular, there has not been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, which would have a Material Adverse
Effect other than as set forth or contemplated in the Offering
Circular;
(c) Except as set forth in the Offering Circular, the Company
and each Significant Subsidiary have (i) good and marketable title to
all personal properties owned by them, free and clear of all liens,
security interests, pledges, charges, encumbrances, and mortgages, and
(ii) valid, subsisting and enforceable leases or licenses for all real
and personal properties leased or licensed by them, subject to such
exceptions as, individually or in the aggregate, do not have and are
not reasonable likely to have a Material Adverse Effect.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Circular, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where the failure
to be so qualified in any such jurisdiction would not have a Material
Adverse Effect; and each Significant Subsidiary of the Company has been
duly incorporated and is validly existing as a corporation or limited
liability company in good standing under the laws of its jurisdiction
of incorporation or formation;
2
<PAGE> 3
(e) The Company has an authorized capitalization as set forth
in the Offering Circular, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued shares of capital
stock of each Significant Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(f) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the indenture to be dated as of May 27, 1999 (the
"Indenture") between the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee"), under which they are to be issued,
which will be substantially in the form previously delivered to you;
the Indenture has been duly authorized and, when executed and delivered
by the Company and the Trustee, the Indenture will constitute a valid
and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform to the descriptions thereof
in the Offering Circular and will be in substantially the form
previously delivered to you;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System;
(h) Prior to the date hereof, neither the Company nor any of
its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities;
(i) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is subject
except for such conflict, breach, violation or default which would not
have a Material Adverse Effect, nor will such action result in any
violation of the provisions of (i) the Certificate of Incorporation or
By-laws of the Company or (ii) any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties except, in the case of clause (ii) above, such
violation which would
3
<PAGE> 4
not have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, except
for the filing of a registration statement by the Company with the
Commission pursuant to the United States Securities Act of 1933, as
amended (the "Act") pursuant to Section 5(k) hereof, the filing of a
notice on Form D by the Company with the Commission pursuant to Section
5(h) hereby, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers;
(j) Neither the Company nor any of its Significant
Subsidiaries is (i) in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound other than any violations or defaults which in
the aggregate would not have a Material Adverse Effect or (ii) in
violation of its Certificate of Incorporation or By-laws;
(k) The statements set forth in the Offering Circular under
the caption "Description of Notes", insofar as they purport to
constitute a summary of the terms of the Securities and under the
caption "Material Federal Income Tax Consequences" and under the
caption "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(l) Other than as set forth in the Offering Circular, there
are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) When the Securities are issued and delivered pursuant to
this Agreement, the Securities will not be of the same class (within
the meaning of Rule 144A under the United States Securities Act of
1933, as amended (the "Act")) as securities which are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated inter-dealer quotation system;
(n) The Company is subject to Section 13 or 15(d) of the
Exchange Act;
(o) The Company is not, and after giving effect to the
offering and sale of the Securities, will not be an "investment
company", as such term is defined in the United States Investment
Company Act of 1940, as amended (the "Investment Company Act");
(p) Neither the Company, nor any person acting on its or their
behalf (other than the Purchasers with respect to whom the Company
makes no representation or warranties)
4
<PAGE> 5
has offered or sold the Securities by means of any general solicitation
or general advertising within the meaning of Rule 502(c) under the Act
or, with respect to Securities sold outside the United States to
non-U.S. persons (as defined in Rule 902 under the Act), by means of
any directed selling efforts within the meaning of Rule 902 under the
Securities Act and the Company, any affiliate of the Company and any
person acting on its or their behalf (other than the Purchasers with
respect to whom the Company makes no representation or warranties) has
complied with and will implement the "offering restriction" within the
meaning of such Rule 902;
(q) Within the preceding six months, neither the Company nor
any other person acting on behalf of the Company has offered or sold to
any person any Securities, or any securities of the same or a similar
class as the Securities, other than Securities offered or sold to the
Purchasers hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Securities or any substantially similar security issued by
the Company, within six months subsequent to the date on which the
distribution of the Securities has been completed (as notified to the
Company by Goldman, Sachs & Co.), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer
and sale of the Securities in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the
registration provisions of the Securities Act;
(r) Ernst & Young, LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(s) With respect to the information systems of the Company and
its Significant Subsidiaries, the Company does not believe that the
Year 2000 Problem will have a Material Adverse Effect or result in any
material loss or interference with the Company's business or
operations. In addition, except as disclosed in the Offering Circular,
the Company has no reason to believe that, with respect to the
information systems of any third parties with which the company or any
of its Significant Subsidiaries has a material relationship, the Year
2000 Problem will have a Material Adverse Effect or result in any
material loss or interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization or data or in the operation of
technical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, the Fixed Notes
at a purchase price of 99.335% of the principal amount thereof and the Floating
Notes at a purchase price of 99.350% of the principal amount thereof, as set
forth opposite the name of such Purchaser in Schedule I hereto, in each case
plus accrued interest, if any, from May 27, 1999 to the Time of Delivery (as
defined below) hereunder.
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<PAGE> 6
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Act in transactions meeting the requirements of
Rule 144A, (ii) institutions which it reasonably believes are "accredited
investors" ("Institutional Accredited Investors") within the meaning of Rule 501
under the Act, or (iii) upon the terms and conditions set forth in Annex I to
this Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Act.
4. (a) Except as set forth in the next paragraph, the Securities to be
purchased by each Purchaser hereunder will be represented by one or more
definitive global Securities in book-entry form which will be deposited by or on
behalf of the Company with The Depository Trust Company ("DTC") or its
designated custodian. The Company will deliver the Securities to Goldman, Sachs
& Co., for the account of each Purchaser, against payment by or on behalf of
such Purchaser of the purchase price therefor by wire transfer to an account
specified by the Company in Federal (same day) funds, by causing DTC to credit
the Securities to the account of Goldman, Sachs & Co. at DTC. The Company will
cause the certificates representing the Securities to be made available to
Goldman, Sachs & Co. for checking at least twenty-four hours prior to the Time
of Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on May 27, 1999 or such other time and date as
Goldman, Sachs & Co. and the Company may agree upon in writing. Such time and
date are herein called the "Time of Delivery".
Such Securities, if any, as Goldman Sachs & Co. may request
upon at least forty-eight hours' prior to notice to the Company (such request to
include the authorized denominations and the names in which they are to be
registered), shall be delivered in definitive certificated form, by or on behalf
of the Company to Goldman, Sachs & Co. for the account of certain of the
Purchasers, against payment by or on behalf of such Purchaser of the purchase
price therefor by certified or official bank check or checks, payable to the
order of the Company in Federal (same day) funds. The Company will cause the
certificates representing the Securities to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery at the office
of Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004.
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7 hereof, will be delivered at such time and date
at the offices of Sullivan & Cromwell (the "Closing Location"), and the
Securities will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York
City time, on the New York Business Day next preceding the Time
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<PAGE> 7
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report in the Offering Circular, and
any amendment or supplement containing amendments to the financial statements
covered by such report, signed by the accountants, and additional copies thereof
in such quantities as you may from time to time reasonably request, and if, at
any time prior to the expiration of nine months after the date of the Offering
Circular, any event shall have occurred as a result of which the Offering
Circular as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Offering Circular is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend or
supplement the Offering Circular, to notify you and upon your request to prepare
and furnish without charge to each Purchaser and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Offering Circular or a supplement to the Offering Circular which will correct
such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date 30 days after the Time of Delivery, not to offer, sell contract
to sell or otherwise dispose of, except as provided hereunder any securities of
the Company that are substantially similar to the Securities.
(e) Not to be or become, at any time prior to the expiration of two
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
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<PAGE> 8
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Act;
(g) If requested by you, to use its reasonable best efforts to cause
the Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) To file with the Commission, not later than 15 days after the Time
of Delivery, five copies of a notice on Form D under the Act (one of which will
be manually signed by a person duly authorized by the Company); to otherwise
comply with the requirements of Rule 503 under the Act; and to furnish promptly
to you evidence of each such required timely filing (including a copy thereof);
(i) To make generally available to the holders of the Securities as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Offering Circular), to make available to
its stockholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
(j) During a period of three years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Securities, or any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(k) During the period of three years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
(l) The Company shall file and use its reasonable best efforts to cause
to be declared or become effective under the Securities Act, on or prior to 90
days after the Securities are initially issued, a registration statement
providing for the registration of (i) another series of debt securities of the
Company, with terms identical to the Securities (the "Exchange Securities"), and
(ii) the exchange of the Securities for the Exchange Securities, all in a manner
which will permit persons who acquire the Exchange Securities to resell the
Exchange Securities pursuant to Section 4(1) of the Securities Act.
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<PAGE> 9
(m) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds".
6. The Company covenants and agrees with the several Purchasers that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and all other expenses in connection
with the preparation, printing and filing of the Preliminary Offering Circular
and the Offering Circular and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the
cost of printing or producing any Agreement among Purchasers, this Agreement,
the Indenture, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Purchasers in connection with such qualification; (iv) any fees charged by
securities rating services for rating the Securities; (v) the cost of preparing
the Securities; (vi) the fees and expenses of the Trustee and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities; (vii) any cost incurred in connection
with the designation of the Securities for trading in PORTAL and all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Purchasers will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Sullivan & Cromwell, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to certain matters covered in subsection (b) below as well as such other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(b) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company,
and Richard H. Verheij, Executive Vice President and General Counsel of the
Company, shall have furnished to the Purchasers their written opinions, dated
the Time of Delivery, in form and substance satisfactory to the Purchasers,
collectively to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware
with full corporate power and authority to own its properties and
conduct its business as described in the Offering Circular;
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<PAGE> 10
(ii) The Company has an authorized capitalization as set forth
in the Offering Circular and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iv) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation or limited
liability company in good standing under the laws of its jurisdiction
of incorporation or formation, as the case may be; and all of the
issued shares of capital stock or limited liability company interests
of each Significant Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except for
directors' qualifying shares) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims
(such counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company or its Significant
Subsidiaries, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions and
certificates);
(v) Except as described in the Offering Circular, the Company
and each Significant Subsidiary have (i) good and marketable title to
all personal properties owned by them, free and clear of all liens,
security interests, pledges, charges, encumbrances, and mortgages, and
(ii) valid, subsisting and enforceable leases or licenses for all real
and personal properties leased or licensed by them, subject to such
exceptions as, individually or in the aggregate, do not have and are
not reasonable likely to have a Material Adverse Effect. (In giving the
opinion in this clause, such counsel may state that no examination of
record titles for the purpose of such opinion has been made, and that
they are relying upon a general review of the titles of the Company and
its subsidiaries, upon opinions of local counsel and abstracts, reports
and policies of title companies rendered or issued at or subsequent to
the time of acquisition of such property by the Company or its
subsidiaries, upon opinions of counsel to the lessors of such property
and, in respect of matters of fact, upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying upon
such opinions, abstracts, reports, policies and certificates);
(vi) To the best of such counsel's knowledge and other than as
set forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would have a Material Adverse
Effect on the current or future
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<PAGE> 11
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The Securities have been duly authorized, executed and
authenticated, and (assuming payment for the Securities by you in
accordance with the Agreement and due authentication by the Trustee)
when issued and delivered will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture; and the Securities and the Indenture conform to the
descriptions thereof in the Offering Circular;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company, and assuming due authorization, execution and
delivery by the Trustee, will constitute a valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
except to the extent that (i) enforcement thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization and other similar
laws now or hereafter in effect relating to or affecting creditors'
rights and to general equity principles;
(x) The execution and delivery by the Company of each of the
Purchase Agreement, the Indenture, and the Securities and the
performance by the Company of its obligations under each of the
Purchase Agreement, the Indenture and the Securities, each in
accordance with its terms, do not (i) conflict with the Certificate of
Incorporation or Bylaws of the Company, (ii) constitute a violation of
or a default under any Applicable Contracts (as hereinafter defined) or
(iii) cause the creation of any security interest or lien (other than
the liens granted under the Indenture or securing the Notes) upon any
of the property of the Company pursuant to any Applicable Contracts. We
do not express any opinion, however, as to whether the execution,
delivery or performance by the Company of the Purchase Agreement, the
Indenture and the Securities will constitute a violation of or a
default under any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or
results of operations of the Company. "Applicable Contracts" mean those
agreements or instruments set forth on Schedule [III] hereto and which
have been identified to us as all the agreements and instruments which
are material to the business or financial condition of the Company.
(xi) Neither the execution, delivery or performance by the
Company of the Purchase Agreement, the Indenture and the Securities nor
the compliance by the Company with the terms and provisions thereof
will contravene any provision of any Applicable Law. "Applicable Law"
shall mean those laws, rules and regulations of the State of New York
and of the United States of America which, in our experience, are
normally applicable to transactions of the type contemplated by the
Purchase Agreement, the Indenture and the Securities.
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(xii) No Governmental Approval (as hereinafter defined), which
has not been obtained or taken and is not in full force and effect, is
required to authorize or is required in connection with the execution,
delivery or performance of any of the Purchase Agreement, the Indenture
and the Securities by the Company. "Governmental Approval" means any
consent, approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority pursuant to
Applicable Laws.
(xiii) Neither the Company nor any of its Significant
Subsidiaries is (i) in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound which could reasonably be expected to result in
a Material Adverse Effect or (ii) in violation of its Certificate of
Incorporation or By-laws;
(xiv) Although the discussion set forth in the Offering
Memorandum under the caption "Certain Federal Income Tax
Considerations" is only applicable to initial purchasers of Securities
who, for U.S. federal income tax purposes, are not "United States
persons" and the discussion does not purport to discuss all possible
United State federal income tax consequences of the purchase, such
discussion constitutes, in all material respects, a fair summary of the
United States federal income tax consequences of the purchase,
ownership and disposition of the Securities under current law by such
persons; and the statements set forth in the Offering Circular under
the caption "Description of Notes", insofar as they purport to
constitute a summary of the terms of the Securities and under the
caption "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(xv) The 10-K and 10-Q (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission thereunder; and such
counsel has no reason to believe that any of such documents, when they
were so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading;
(xvi) No registration of the Securities under the Act, and no
qualification of an indenture under the United States Trust Indenture
Act of 1939 with respect thereto, is required for the offer, sale and
initial resale of the Securities by the Purchasers in the manner
contemplated by this Agreement;
(xvii) Such counsel have no reason to believe that the
Offering Circular and any further amendments or supplements thereto
made by the Company prior to the Time of Delivery (other than the
financial statements therein, as to which such counsel need express no
opinion) contained as of its date or contains as of the Time of
Delivery an untrue statement of a material fact or omitted or omits, as
the case may be, to state a material fact
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<PAGE> 13
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(xviii) The Company is not an "investment company", as such
term is defined in the Investment Company Act.
(c) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, Ernst & Young LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex II hereto;
(d) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Purchasers so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in this Agreement
and in the Offering Circular;
(e) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(f) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of the Purchasers makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Offering
Circular;
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<PAGE> 14
(g) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Circular or the Offering
Circular, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading, and will reimburse each Purchaser
for any legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Offering Circular or the
Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Purchaser
through Goldman, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Purchaser through Goldman,
Sachs & Co. expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party
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<PAGE> 15
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Purchasers on
the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Purchasers on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Purchasers, in each case as set forth
in the Offering Circular. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total
15
<PAGE> 16
price at which the Securities underwritten by it and distributed to investors
were offered to investors exceeds the amount of any damages which such Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the respective
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of
16
<PAGE> 17
a defaulting Purchaser or Purchasers, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Purchaser or the
Company, except for the expenses to be borne by the Company and the Purchasers
as provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Purchaser from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives, 32 Old Slip, 21st Floor,
New York, New York 10005, Attention: Registration Department; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Offering Circular, Attention:
Secretary; provided, however, that any notice to a Purchaser pursuant to Section
8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission
to such Purchaser at its address set forth in its Purchasers' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
17
<PAGE> 18
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
18
<PAGE> 19
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
UST Inc.
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Fleet Securities, Inc.
- ---------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
19
<PAGE> 20
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
FIXED NOTES FLOATING NOTES
TO BE TO BE
PURCHASER PURCHASED PURCHASED
--------- ------------ --------------
<S> <C> <C>
Goldman, Sachs & Co. ....................... $140,000,000 $ 28,000,000
Morgan Stanley & Co. Incorporated .......... $ 40,000,000 $ 8,000,000
Fleet Securities, Inc. ..................... $ 20,000,000 $ 4,000,000
------------ ------------
Total ............................. $200,000,000 $ 40,000,000
============ ============
</TABLE>
20
<PAGE> 21
ANNEX I
(1) The Securities have not been and will not be registered under the Act and
may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act. Each
Purchaser represents that it has offered and sold the Securities, and will offer
and sell the Securities (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Time of Delivery, only in accordance with Rule 903 of Regulation S, Rule
144A, or pursuant to Paragraph 2 of this Annex I under the Act. Accordingly,
each Purchaser agrees that neither it, its affiliates nor any persons acting on
its or their behalf has engaged or will engage in any directed selling efforts
with respect to the Securities, and it and they have complied and will comply
with the offering restrictions requirement of Regulation S. Each Purchaser
agrees that, at or prior to confirmation of sale of Securities (other than a
sale pursuant to Rule 144A) or pursuant to Paragraph 2 of this Annex I, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing date,
except in either case in accordance with Regulation S (or Rule 144A if
available) under the Securities Act. Terms used above have the meaning given
to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter into
any contractual arrangement with respect to the distribution or delivery of the
Securities, except with its affiliates or with the prior written consent of the
Company.
In addition,
(A) except to the extent permitted under U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D) (the "D Rules"), (i) each Purchaser agrees that it has not
offered or sold, and during the restricted period will not offer or sell,
Securities in bearer form to a person who is within the United States or its
possessions or to a U.S. person, and (ii) it has not delivered and will not
deliver within the United States or its possessions definitive Securities in
bearer form that are sold during the restricted period;
(B) each Purchaser represents and agrees that it has, and throughout
the restricted period will have, in effect procedures reasonably designed to
ensure that its employees or agents who are directly engaged in selling
Securities in bearer form are aware that such Securities may not be offered or
sold during the restricted period to a person who is within the United States
or its possessions or to a United States person, except as permitted by the D
Rules;
A-1
<PAGE> 22
(C) if it is a United States person, each such Purchaser represents
that it is acquiring the Securities in bearer form for purposes of resale in
connection with their original issuance and if it retains Securities in bearer
form for its own account, it will only do so in accordance with the
requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); and
(D) with respect to each affiliate that acquires from it Securities in
bearer form for the purpose of offering or selling such Securities during the
restricted period, such Purchaser either (i) repeats and confirms the
representations and agreements contained in clauses (A), (B) and (C) on its
behalf or (ii) agrees that it will obtain from such affiliate for the
Company's benefit the representations and agreements contained in clauses (A),
(B) and (C).
Terms used in this paragraph have the meanings given to them by the United
States Internal Revenue Code and regulations thereunder, including the D Rules.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not offered
or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of the
Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities except in any such case
with Goldman, Sachs & Co.'s express written consent and then only at its own
risk and expense.
A-2
<PAGE> 23
ANNEX II
Pursuant to Section 7(d) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Securities Exchange
Act of 1934 (the "Exchange Act") and the applicable published rules and
regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the Offering
Circular comply as to form in all material respects with the applicable
requirements of the Exchange Act and the related published rules and
regulations;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Offering Circular agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included in the Offering Circular, inquiries of officials of the Company and
its subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Offering Circular are not in conformity with generally
accepted accounting principles applied on the basis substantially
consistent with the basis for the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Offering Circular;
A-3
<PAGE> 24
(C) the unaudited financial statements which were not included
in the Offering Circular but from which were derived any unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in the
Offering Circular and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
consolidated financial statements included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form
in all material respects with the applicable accounting requirements or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest financial
statements included in the Offering Circular or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Offering
Circular except in each case for changes, increases or decreases which
the Offering Circular discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for decreases or
increases which the Offering Circular discloses have occurred or may
occur or which are described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs (iii)
and (iv) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which appear
in the Offering Circular, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
A-4
<PAGE> 1
EXHIBIT 4.2
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR
A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE> 2
7.25% Senior Note Due June 1, 2009
No. 1. $200,000,000
CUSIP NO.
UST INC., a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of
$200,000,000 Dollars on June 1, 2009, and to pay interest thereon from ______
__, 1999, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on June 1 and December 1 in each
year, commencing _____ __, 1999, at the rate of 7.25% per annum, until the
principal hereof is paid or made available for payment; provided, however, that
if (i) the Company has not filed a registration statement (the "Exchange
Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), registering a security substantially identical to this
Security (except that such Security will not contain terms with respect to the
Special Interest payments described below or transfer restrictions) pursuant to
an exchange offer (the "Exchange Offer") within 90 days after the securities are
initially issued (or, in lieu thereof if such obligation arises pursuant to the
Indenture, a registration statement registering this Security for resale (a
"Resale Registration Statement") within 30 days after the time such obligation
arises), or (ii) the Exchange Registration Statement relating to the Exchange
Offer has not become or been declared effective within 180 days of filing (or,
if applicable, the Resale Registration Statement has not become or been declared
effective within 120 days after filing), or (iii) the Exchange Offer has not
been completed within 45 days after the date on which the Exchange Registration
Statement has become or been declared effective initially (if the Exchange Offer
is then required to be made pursuant to the Exchange and Registration Rights
Agreement (the "Exchange and Registration Rights Agreement")), dated as of
______ __, 1999, by and between the Company, the Purchasers (as defined therein)
and the Holders from time to time of the Securities) or (iv) either the Exchange
Registration Statement or, if applicable, the Resale Registration Statement is
filed and declared effective (except as specifically permitted therein) but
shall thereafter cease to be effective without being succeeded promptly by an
additional registration statement filed and declared effective, in each case (i)
through (iv) upon the terms and conditions set forth in the Exchange and
Registration Rights Agreement (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then special interest ("Special
Interest") will accrue (in addition to the stated interest on the Securities) at
a per annum rate of 0.25% for the first 90 days, determined daily, on the
principal amount of the Securities, from the period from the occurrence of the
Registration Default until such time as no Registration Default is in effect
and, provided, further, that if either the Exchange Offer has not been
consummated or, if applicable, the Resale Registration Statement has not become
or been declared effective, in each case within this first 90 days, then the per
annum rate of such Special Interest shall increase by an additional 0.25% per
annum for each subsequent 90-day period (provided that the rate of Special
Interest shall not
2
<PAGE> 3
exceed 1.0% per annum in the aggregate) and Special Interest will be payable at
such increased rate until such time as the Company consummates the Exchange
Offer or, if applicable, the Resale Registration Statement becomes or has been
declared effective (after which such interest rate will be restored to its
initial rate). Interest accruing as a result of Registration Default (which
shall be computed on the basis of a 365-day year) is referred to herein as
"Special Interest." Accrued Special Interest, if any, shall be paid
semi-annually on June 1 and December 1, in each year; and the amount of accrued
Special Interest shall be determined on the basis of the number of days actually
elapsed. Any accrued and unpaid interest (including Special Interest) on this
Security upon the issuance of an Exchange Security (as defined in the Indenture)
in exchange for this Security shall cease to be payable to the Holder hereof but
such accrued and unpaid interest (including Special Interest) shall be payable
on the next Interest Payment Date for such Exchange Security to the Holder
thereof on the related Regular Record Date.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the May 15 or November 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in Boston, Massachusetts, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
3
<PAGE> 4
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
UST Inc.
By________________________________________
Attest:
_____________________________
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
State Street Bank and Trust Company
By______________________________________
Authorized Signature
4
<PAGE> 5
[Reverse of Security]
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of _____ __, 1999 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and State Street Bank and Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $200,000,000.
The Securities of this series are subject to redemption, as a
whole or from time to time in part, upon not less than 30 nor more than 60 days'
notice mailed to each Holder of Securities to be redeemed at his address as it
appears in the Securities Register, on any date prior to their Stated Maturity
at a Redemption Price equal to the greater of (i) 100% of the principal amount
of such Securities or (ii) as determined by a Quotation Agent, the sum of the
present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of
the Redemption Date) discounted to the Redemption Date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus 15 basis points, plus, in each case, accrued interest
thereon to the Redemption Date; provided, that, unless the Company defaults in
payment of the Redemption Price, on and after the Redemption Date, interest will
cease to accrue on the Securities or portions thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. "Comparable Treasury Issue"
(expressed as a percentage of its principal amount) means the United States
Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Securities that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate notes of comparable maturity to the remaining
term of the Securities. "Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for
such Redemption Date, provided that if three or more Reference Treasury Dealer
Quotations, the average of all such Quotations. "Quotation Agent" means the
Reference Treasury Dealer appointed by the Trustee after consultation with the
Company. "Reference Treasury Dealer" means (i) Goldman, Sachs & Co. and its
respective successors; provided, however, that, if the foregoing shall cease to
be a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer; and (ii) any other primary Treasury Dealer selected by the
Trustee after consultation with
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<PAGE> 6
the Company. "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such Redemption Date.
The Securities do not have the benefit of any sinking fund
obligations.
In the event of redemption of this Security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Security or certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66 2/3% in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
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<PAGE> 7
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made to a Holder for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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<PAGE> 1
EXHIBIT 4.3
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR
A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY
BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE> 2
Floating Rate Senior Note Due June 1, 2009
No. 1. $40,000,000
CUSIP NO.
UST INC., a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of
$40,000,000 Dollars on June 1, 2009, and to pay interest thereon at a floating
rate determined in the manner described below from ______ __, 1999, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, quarterly on March 1, June 1, September 1 and December 1 of each
year, commencing ______ __, 1999. The interest rate per annum on the Floating
Rate Notes in effect for each day of an interest period will be equal to the
Three Month LIBOR Rate plus 90 basis points. The interest rate for the Initial
Interest Period will be set on _____ __, 1999 and the interest rate for each
subsequent period will be reset on the 1st day of the month of each March, June,
September and December thereafter beginning _____ __, 1999 (each such date an
"Interest Reset Date") until the principal on the Floating Rate Notes is paid or
made available for payment (the "Principal Payment Date"). If any Interest Reset
Date and Interest Payment Date would otherwise be a day that is not a LIBOR
Business Day, that Interest Reset Date and Interest Payment Date shall be the
following LIBOR Business Day, unless the following LIBOR Business Day is in the
following calendar month, in which case the Interest Reset Date and Interest
Payment Date will be the immediately preceding LIBOR Business Day.
"LIBOR Business Day" means any day that is not a Saturday or
Sunday and that, in the City of New York or the City of London, is not a day on
which banking institutions are generally authorized or obligated by law to
close. "Interest Period" means the period from and including an Interest Reset
Date to but excluding the next succeeding Interest Reset Date and, in the case
of the last such period, from and including an Interest Reset Date immediately
preceding the Principal Payment Date to but not including the Principal Payment
Date. If the Principal Payment Date is not a LIBOR Business Day, then the
principal amount of the Floating Rate Notes plus accrued and unpaid interest
thereon shall be paid on the next succeeding Business Day and no interest shall
accrue for the principal payment date or any day thereafter.
"Business Day" shall mean any day that is not a Saturday or
Sunday and that, in the City of New York, is not a day on which banking
institutions are generally authorized or obligated by law to close.
The "Three Month LIBOR Rate" shall mean the rate determined in
accordance with the following provisions:
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<PAGE> 3
(i) On the second day on which dealing in deposits in U.S. dollars are
transacted in the London interbank market preceding each interest reset
date (each such date an "Interest Determination Date"). State Street
Bank and Trust Company, as agent for UST (the "Reference Agent"), will
determine the Three Month LIBOR Rate which shall be the rate for
deposits in U.S. dollars having a three-month maturity which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such Interest
Determination Date. "Telerate Page 3750" means the display page so
designated on the Dow Jones Markets Limited (or such other page as may
replace that page on that service or such other service or services as
may be nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates for U.S. dollar deposits). If
the Three Month LIBOR Rate on such Interest Determination Date does not
appear on the Telerate Page 3750, such Three Month LIBOR Rate will be
determined as described in (ii) below.
(ii) With respect to an Interest Determination Date for which the Three
Month LIBOR Rate does not appear on the Telerate Page 3750 as specified
above, the Three Month LIBOR Rate will be determined on the basis of
the rates at which deposits in U.S. dollars are offered by four major
banks in the London interbank market selected by the Reference Agent
(the "Reference Banks") at approximately 11:00 a.m., London time, on
such Interest Determination Date to prime banks in the London interbank
market having a three-month maturity and in a principal amount equal to
an amount of not less than U.S. $1,000,000 that is representative for a
single transaction in such market at such time. The Reference Agent
will request the principal London office of each of such reference
banks to provide a quotation of its rate. If at least two such
quotations are provided, the Three Month LIBOR Rate on such Interest
Determination Date will be the arithmetic mean (rounded upwards, if
necessary, to the nearest one hundred-thousandth of a percentage point,
with 5 one-millionths of a percentage point rounded upwards) of such
quotations. If fewer than two quotations are provided, the Three Month
LIBOR Rate on such Interest Determination Date will be the arithmetic
mean (rounded upwards, if necessary, to the nearest one hundred-
thousandth of a percentage point, with 5 one-millionths of a percentage
point rounded upwards) of the rates quoted by three major banks in
New York City selected by the Reference Agent at approximately
11:00 a.m., New York City time, on such Interest Determination Date for
loans in U.S. dollars to leading European banks, having a three-month
maturity and in a principal amount equal to an amount of not less than
U.S. $1,000,000 that is representative for a single transaction in such
market at such time; provided, however, that if the Banks in New York
City selected as aforesaid by the Reference Agent are not quoting as
mentioned in this sentence, the interest rate for the Interest Period
commencing on the Interest
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<PAGE> 4
Reset Date following such Interest Determination Date will be the
interest rate in effect on such Interest Determination Date.
The amount of interest for each day that a Floating Rate Note
is outstanding (the "Daily Interest Amount") will be calculated by dividing the
interest rate in effect for such day by 360 and multiplying the result by the
principal amount of the Floating Rate Note. The amount of interest to be paid on
the Floating Rate Note for any Interest Period will be calculated by adding the
Daily Interest Amounts for each day in such Interest Period.
The interest rate on the Floating Rate Notes will in no event
be higher than the maximum rate permitted by New York Law as the same may be
modified by United States law of general application.
The interest rate and amount of interest to be paid on the
Floating Rate Notes for each Interest Period will be determined by the Reference
Agent. All calculations made by the Reference Agent shall in the absence of
manifest error be conclusive for all purposes and binding on the Company and the
holders of the Floating Rate Notes. So long as the Three Month LIBOR Rate is
required to be determined with respect to the Floating Rate Notes, there will at
all times be a Reference Agent. In the event that any then acting Reference
Agent shall be unable or unwilling to act, or that such Reference Agent shall
fail duly to establish the Three Month LIBOR Rate for any Interest Period, or
that the Company proposes to remove such Reference Agent, the Company shall
appoint another person which is a bank, trust company, investment banking firm
or other financial institution to act as the Reference Agent.
If (i) the Company has not filed a registration statement (the
"Exchange Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), registering a security substantially identical to this
Security (except that such Security will not contain terms with respect to the
Special Interest payments described below or transfer restrictions) pursuant to
an exchange offer (the "Exchange Offer") within 90 days after the securities are
initially issued (or, in lieu thereof if such obligation arises pursuant to the
Indenture, a registration statement registering this Security for resale (a
"Resale Registration Statement") within 30 days after the time such obligation
arises), or (ii) the Exchange Registration Statement relating to the Exchange
Offer has not become or been declared effective within 180 days of filing (or,
if applicable, the Resale Registration Statement has not become or been declared
effective within 120 days after filing), or (iii) the Exchange Offer has not
been completed within 45 days after the date on which the Exchange Registration
Statement has become or been declared effective initially (if the Exchange Offer
is then required to be made pursuant to the Exchange and Registration Rights
Agreement (the "Exchange and Registration Rights Agreement"), dated as of _____
__, 1999, by and between the Company, the Purchasers (as defined therein) and
the Holders from time to time of the Securities) or (iv) either the Exchange
Registration Statement or, if applicable, the Resale Registration Statement is
filed and declared effective (except as specifically permitted therein) but
shall thereafter cease to be effective without being succeeded promptly by an
additional registration statement filed and declared effective, in each case (i)
through (iv) upon the terms
4
<PAGE> 5
and conditions set forth in the Exchange and Registration Rights Agreement (each
such event referred to in clauses (i) through (iv), a "Registration Default"),
then special interest ("Special Interest") will accrue (in addition to the
stated interest on the Securities) at a per annum rate of 0.25% for the first 90
days, determined daily, on the principal amount of the Securities, from the
period from the occurrence of the Registration Default until such time as no
Registration Default is in effect and, provided, further, that if either the
Exchange Offer has not been consummated or, if applicable, the Resale
Registration Statement has not become or been declared effective, in each case
within this first 90 days, then the per annum rate of such Special Interest
shall increase by an additional 0.25% per annum for each subsequent 90-day
period (provided that the rate of Special Interest shall not exceed 1.0% per
annum in the aggregate) and Special Interest will be payable at such increased
rate until such time as the Company consummates the Exchange Offer or, if
applicable, the Resale Registration Statement becomes or has been declared
effective (after which such interest rate will be restored to its initial rate).
Interest accruing as a result of Registration Default (which shall be computed
on the basis of a 365-day year) is referred to herein as "Special Interest."
Accrued Special Interest, if any, shall be paid semi-annually on June 1 and
December 1, in each year; and the amount of accrued Special Interest shall be
determined on the basis of the number of days actually elapsed. Any accrued and
unpaid interest (including Special Interest) on this Security upon the issuance
of an Exchange Security (as defined in the Indenture) in exchange for this
Security shall cease to be payable to the Holder hereof but such accrued and
unpaid interest (including Special Interest) shall be payable on the next
Interest Payment Date for such Exchange Security to the Holder thereof on the
related Regular Record Date.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be February 15, May 15, August 15 or November 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in Boston, Massachusetts, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the
5
<PAGE> 6
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
6
<PAGE> 7
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
UST Inc.
By_________________________________________
Attest:
_________________________________
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
State Street Bank and Trust Company
By_________________________________________
Authorized Signature
7
<PAGE> 8
[Reverse of Security]
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of _____ __, 1999 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and State Street Bank and Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $40,000,000.
The Securities of this series are subject to redemption, as
a whole or from time to time in part, upon not less than 30 nor more than 60
days' notice mailed to each Holder of Securities to be redeemed at his address
as it appears in the Securities Register, on any date prior to their Stated
Maturity at a Redemption Price equal to the sum of par plus the present value of
90 basis points discounted from the maturity date to the Redemption Date
(assuming a 360-day year consisting of twelve 30-day months) on a quarterly
basis at the Three Month LIBOR Rate, as in effect on the Business Day on which
the redemption notice is mailed, plus accrued and unpaid interest, if any, until
the Redemption Date.
In the event that less than all of the Floating Rate Notes are
to be redeemed at any time pursuant to an optional redemption, selection of such
Floating Rate Notes for redemption will be made by the trustee, in compliance
with the requirements of the principal national securities exchange, if any, on
which the Floating Rate Notes are listed or, if the Floating Rate Notes are not
then listed on a national securities exchange, on a pro rata basis, by lot or by
such method as the trustee shall deem fair and appropriate; provided, however,
that no Floating Rate Notes of principal amount of $1,000 or less shall be
redeemed in part. If any Floating Rate Notes are to be redeemed in part only,
the notice of redemption that relates to such Floating Rate Notes shall state
the portion of the principal amount thereof to be redeemed. A Floating Rate Note
in the principal amount equal to the unredeemed portion thereof will be issued
in the name of the holder thereof upon cancellation of the original Floating
Rate Note. On and after the Redemption Date (unless the Company shall default in
the payment of the redemption price and accrued interest), interest will cease
to accrue on Floating Rate Notes or portions thereof called for redemption as
long as the Company has deposited with the paying agent for the Floating Rate
Notes funds in satisfaction of the applicable redemption price. If the
redemption price is not so paid upon surrender of the Floating Rate Notes called
for redemption, the principal shall, until paid, bear interest from the
Redemption Date.
The Securities do not have the benefit of any sinking fund
obligations.
8
<PAGE> 9
In the event of redemption of this Security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Security or certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66 2/3% in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and uncondi-
9
<PAGE> 10
tional, to pay the principal of and any premium and interest on this Security at
the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made to a Holder for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
10
<PAGE> 1
EXHIBIT 4.4
UST INC.
7.25% SENIOR NOTES DUE JUNE 1, 2009
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
------
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
May 27, 1999
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Fleet Securities, Inc.
c/o Goldman Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
UST Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the Purchasers (as defined herein) upon the terms set forth in the
Purchase Agreement (as defined herein) its 7.25% Senior Notes due July 1, 2009
and its Floating Rate Senior Notes due June 1, 2009. As an inducement to the
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchasers thereunder, the Company agrees
with the Purchasers for the benefit of holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:
1. Certain Definitions. For purposes of this Exchange and Registration
Rights Agreement, the following terms shall have the following respective
meanings:
"Base Interest" shall mean the interest that would otherwise accrue on the
Securities under the terms thereof and the Indenture, without giving effect
to the provisions of this Agreement.
The term "broker-dealer" shall mean any broker or dealer registered with
the Commission under the Exchange Act.
"Closing Date" shall mean the date on which the Securities are initially
issued.
1
<PAGE> 2
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for the
particular purpose.
"Effective Time," in the case of (i) an Exchange Registration, shall mean
the time and date as of which the Commission declares the Exchange
Registration Statement effective or as of which the Exchange Registration
Statement otherwise becomes effective and (ii) a Shelf Registration, shall
mean the time and date as of which the Commission declares the Shelf
Registration Statement effective or as of which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" shall mean any holder of Registrable Securities that has
returned a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(ii) or 3(d)(iii) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same shall be amended from time to time.
"Exchange Offer" shall have the meaning assigned thereto in Section 2(a)
hereof.
"Exchange Registration" shall have the meaning assigned thereto in Section
3(c) hereof.
"Exchange Registration Statement" shall have the meaning assigned thereto
in Section 2(a) hereof.
"Exchange Securities" shall have the meaning assigned thereto in Section
2(a) hereof.
The term "holder" shall mean each of the Purchasers and other persons who
acquire Registrable Securities from time to time (including any successors or
assigns), in each case for so long as such person owns any Registrable
Securities.
"Indenture" shall mean the Indenture, dated as of May 27, 1999, between
the Company and State Street Bank and Trust Company, as Trustee, as the same
shall be amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
The term "person" shall mean a corporation, association, partnership,
organization, business, individual, government or political subdivision
thereof or governmental agency.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of May
25, 1999, between the Purchasers and the Company relating to the Securities.
"Purchasers" shall mean the Purchasers named in Schedule I to the Purchase
Agreement.
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<PAGE> 3
"Registrable Securities" shall mean the Securities; provided, however,
that a Security shall cease to be a Registrable Security when (i) in the
circumstances contemplated by Section 2(a) hereof, the Security has been
exchanged for an Exchange Security in an Exchange Offer as contemplated in
Section 2(a) hereof (provided that any Exchange Security that, pursuant to
the last two sentences of Section 2(a), is included in a prospectus for use
in connection with resales by broker-dealers shall be deemed to be a
Registrable Security with respect to Sections 5, 6 and 9 until resale of such
Registrable Security has been effected within the 90-day period referred to
in Section 2(a)); (ii) in the circumstances contemplated by Section 2(b)
hereof, a Shelf Registration Statement registering such Security under the
Securities Act has been declared or becomes effective and such Security has
been sold or otherwise transferred by the holder thereof pursuant to and in a
manner contemplated by such effective Shelf Registration Statement; (iii)
such Security is sold pursuant to Rule 144 under circumstances in which any
legend borne by such Security relating to restrictions on transferability
thereof, under the Securities Act or otherwise, is removed by the Company or
pursuant to the Indenture; (iv) such Security is eligible to be sold pursuant
to paragraph (k) of Rule 144; or (v) such Security shall cease to be
outstanding.
"Registration Default" shall have the meaning assigned thereto in Section
2(c) hereof.
"Registration Expenses" shall have the meaning assigned thereto in Section
4 hereof.
"Resale Period" shall have the meaning assigned thereto in Section 2(a)
hereof.
"Restricted Holder" shall mean (i) a holder that is an affiliate of the
Company within the meaning of Rule 405, (ii) a holder who acquires Exchange
Securities outside the ordinary course of such holder's business, (iii) a
holder who has arrangements or understandings with any person to participate
in the Exchange Offer for the purpose of distributing Exchange Securities and
(iv) a holder that is a broker-dealer, but only with respect to Exchange
Securities received by such broker-dealer pursuant to an Exchange Offer in
exchange for Registrable Securities acquired by the broker-dealer directly
from the Company.
"Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such rule
promulgated under the Securities Act (or any successor provision), as the
same shall be amended from time to time.
"Securities" shall mean, collectively, the 7.25% Senior Notes due July 1,
2009 and the Floating Rate Senior Notes due July 1, 2009 of the Company to be
issued and sold to the Purchasers, and securities issued in exchange therefor
or in lieu thereof pursuant to the Indenture.
"Securities Act" shall mean the Securities Act of 1933, or any successor
thereto, as the same shall be amended from time to time.
"Shelf Registration" shall have the meaning assigned thereto in Section
2(b) hereof.
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<PAGE> 4
"Shelf Registration Statement" shall have the meaning assigned thereto in
Section 2(b) hereof.
"Special Interest" shall have the meaning assigned thereto in Section 2(c)
hereof.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.
Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this Exchange
and Registration Rights Agreement, and the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Exchange and
Registration Rights Agreement as a whole and not to any particular Section or
other subdivision.
2. Registration Under the Securities Act.
(a)Except as set forth in Section 2(b) below, the Company agrees to file
under the Securities Act, as soon as practicable, but no later than 90 days
after the Closing Date, a registration statement relating to an offer to
exchange (such registration statement, the "Exchange Registration Statement",
and such offer, the "Exchange Offer") any and all of the Securities for a
like aggregate principal amount of debt securities issued by the Company,
which debt securities are substantially identical to the Securities (and are
entitled to the benefits of a trust indenture which is substantially
identical to the Indenture or is the Indenture and which has been qualified
under the Trust Indenture Act), except that they have been registered
pursuant to an effective registration statement under the Securities Act and
do not contain provisions for the additional interest contemplated in Section
2(c) below (such new debt securities hereinafter called "Exchange
Securities"). The Company agrees to use its reasonable best efforts to cause
the Exchange Registration Statement to become effective under the Securities
Act as soon as practicable, but no later than 180 days after the Closing
Date. The Exchange Offer will be registered under the Securities Act on the
appropriate form and will comply with all applicable tender offer rules and
regulations under the Exchange Act. The Company further agrees to use its
reasonable best efforts to commence and complete the Exchange Offer promptly,
but no later than 45 days after such registration statement has become
effective, hold the Exchange Offer open for at least 30 days and exchange
Exchange Securities for all Registrable Securities that have been properly
tendered and not withdrawn on or prior to the expiration of the Exchange
Offer. The Exchange Offer will be deemed to have been "completed" only if the
debt securities received by holders other than Restricted Holders in the
Exchange Offer for Registrable Securities are, upon receipt, transferable by
each such holder without restriction under the Securities Act and the
Exchange Act and without material restrictions under the blue sky or
securities laws of a substantial majority of the States of the United States
of America. The Exchange Offer shall be deemed to have been completed upon
the earlier to occur of (i) the Company having exchanged the Exchange
Securities for all outstanding Registrable Securities pursuant to the
Exchange Offer and (ii) the Company having exchanged, pursuant to the
Exchange Offer, Exchange Securities for all Registrable Securities that have
been properly tendered and not withdrawn before the expiration of the
Exchange Offer, which shall be on a
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<PAGE> 5
date that is at least 30 days following the commencement of the Exchange
Offer. The Company agrees (x) to include in the Exchange Registration
Statement a prospectus for use in any resales by any holder of Exchange
Securities that is a broker-dealer and (y) to keep such Exchange Registration
Statement effective for a period (the "Resale Period") beginning when
Exchange Securities
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<PAGE> 6
are first issued in the Exchange Offer and ending upon the earlier of the
expiration of the 90th day after the Exchange Offer has been completed or
such time as such broker-dealers no longer own any Registrable Securities.
With respect to such Exchange Registration Statement, such holders shall have
the benefit of the rights of indemnification and contribution set forth in
Sections 6(a), (c), (d) and (e) hereof.
Each holder that participates in the Exchange Offer will be required, as a
condition to its participation in the Exchange Offer, to represent to the
Company in writing (which may be contained in the applicable letter of
transmittal) substantially to the effect that (i) any Exchange Securities to
be received by it will be acquired in the ordinary course of its business,
(ii) at the time of the commencement of the Exchange Offer such holder will
have no arrangement or understanding with any person to participate in the
distribution (within the meaning of the Securities Act) of the Exchange
Securities in violation of the provisions of the Securities Act, (iii) such
holder is not an affiliate of the Company within the meaning of the
Securities Act and (iv) such holder is not acting on behalf of a person who
could make the foregoing representations. In addition, each broker-dealer
that will receive Exchange Securities for its own account in exchange for
Registrable Securities that were acquired as a result of market-making or
other trading activities will be required to represent that the Registrable
Securities of such broker-dealer were acquired in ordinary trading or
market-making activities. A broker-dealer that is not able to make the
foregoing representation will not be permitted to participate in the Exchange
Offer.
(b)If (i) on or prior to the time the Exchange Offer is completed existing
Commission interpretations are changed such that the debt securities received
by holders other than Restricted Holders in the Exchange Offer for
Registrable Securities are not or would not be, upon receipt, transferable by
each such holder without restriction under the Securities Act, (ii) the
Exchange Offer has not been completed within 225 days following the Closing
Date or (iii) the Exchange Offer is not available to any holder of the
Securities, the Company shall, in lieu of (or, in the case of clause (iii),
in addition to) conducting the Exchange Offer contemplated by Section 2(a),
file under the Securities Act as soon as practicable, but no later than the
later of 30 days after the time such obligation to file arises, a "shelf"
registration statement providing for the registration of, and the sale on a
continuous or delayed basis by the holders of, all of the Registrable
Securities, pursuant to Rule 415 or any similar rule that may be adopted by
the Commission (such filing, the "Shelf Registration" and such registration
statement, the "Shelf Registration Statement"). The Company agrees to use its
reasonable best efforts (x) to cause the Shelf Registration Statement to
become or be declared effective no later than 120 days after such Shelf
Registration Statement is filed and to keep such Shelf Registration Statement
continuously effective for a period ending on the earlier of the second
anniversary of the Effective Time or such time as there are no longer any
Registrable Securities outstanding, provided, however, that no holder shall
be entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the prospectus forming a part thereof for resales of
Registrable Securities unless such holder is an Electing Holder, and (y)
after the Effective Time of the Shelf Registration Statement, as soon as
practicable after the request of any holder of Registrable Securities that is
not then an Electing Holder, to take any action reasonably necessary to
enable such holder to use the prospectus forming a part thereof for resales
of Registrable Securities, including, without limitation, any action
necessary to identify such holder
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<PAGE> 7
as a selling securityholder in the Shelf Registration Statement, provided,
however, that nothing in this Clause (y) shall relieve any such holder of the
obligation to return a completed and signed Notice and Questionnaire to the
Company in accordance with Section 3(d)(iii) hereof. The Company further
agrees to supplement or make amendments to the Shelf Registration Statement,
as and when required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or rules and regulations thereunder for
shelf registration, and the Company agrees to furnish to each Electing Holder
copies of any such supplement or amendment prior to its being used or
promptly following its filing with the Commission.
(c)In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or before the date
on which such registration statement is required to be filed pursuant to
Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration
Statement or Shelf Registration Statement has not become effective or been
declared effective by the Commission on or before the date on which such
registration statement is required to become or be declared effective
pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer
has not been completed within 45 days after the initial effective date of the
Exchange Registration Statement relating to the Exchange Offer (if the
Exchange Offer is then required to be made) or (iv) any Exchange Registration
Statement or Shelf Registration Statement required by Section 2(a) or 2(b)
hereof is filed and declared effective but shall thereafter either be
withdrawn by the Company or shall become subject to an effective stop order
issued pursuant to Section 8(d) of the Securities Act suspending the
effectiveness of such registration statement (except as specifically
permitted herein) without being succeeded immediately by an additional
registration statement filed and declared effective (each such event referred
to in clauses (i) through (iv), a "Registration Default" and each period
during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then, as liquidated damages for such
Registration Default, subject to the provisions of Section 9(b), special
interest ("Special Interest"), in addition to the Base Interest, shall accrue
at a per annum rate of 0.25% for the first 90 days of the Registration
Default Period, at a per annum rate of 0.50% for the second 90 days of the
Registration Default Period, at a per annum rate of 0.75% for the third 90
days of the Registration Default Period and at a per annum rate of 1.0%
thereafter for the remaining portion of the Registration Default Period.
(d)The Company shall take all reasonable actions necessary or advisable to
be taken by it to ensure that the transactions contemplated herein are
effected as so contemplated.
(e)Any reference herein to a registration statement as of any time shall
be deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time and any reference herein to any
post-effective amendment to a registration statement as of any time shall be
deemed to include any document incorporated, or deemed to be incorporated,
therein by reference as of such time.
3. Registration Procedures.
If the Company files a registration statement pursuant to Section 2(a)
or Section 2(b), the following provisions shall apply:
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<PAGE> 8
(a)At or before the Effective Time of the Exchange Offer or the Shelf
Registration, as the case may be, the Company shall qualify the Indenture
under the Trust Indenture Act of 1939.
(b)In the event that such qualification would require the appointment of a
new trustee under the Indenture, the Company shall appoint a new trustee
thereunder pursuant to the applicable provisions of the Indenture.
(c)In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):
(i)prepare and file with the Commission, as soon as practicable but
no later than 90 days after the Closing Date, an Exchange Registration
Statement on any form which may be utilized by the Company and which
shall permit the Exchange Offer and resales of Exchange Securities by
broker-dealers during the Resale Period to be effected as contemplated
by Section 2(a), and use its reasonable best efforts to cause such
Exchange Registration Statement to become effective as soon as
practicable there after, but no later than 180 days after the Closing
Date;
(ii)as soon as practicable, prepare and file with the Commission
such amendments and supplements to such Exchange Registration Statement
and the prospectus included therein as may be necessary to effect and
maintain the effectiveness of such Exchange Registration Statement for
the periods and purposes contemplated in Section 2(a) hereof and as may
be required by the applicable rules and regulations of the Commission
and the instructions applicable to the form of such Exchange
Registration Statement, and promptly provide each broker-dealer holding
Exchange Securities with such number of copies of the prospectus
included therein (as then amended or supplemented), in conformity in
all material respects with the requirements of the Securities Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder, as such broker-dealer reasonably may request prior to the
expiration of the Resale Period, for use in connection with resales of
Exchange Securities;
(iii) promptly notify each broker-dealer holding Exchange Securities
that has requested or received copies of the prospectus included in
such registration statement, and confirm such advice in writing, (A)
when such Exchange Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to such Exchange
Registration Statement or any post-effective amendment, when the same
has become effective, (B) of any comments by the Commission and by the
blue sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such Exchange Registration Statement or prospectus or
for additional information, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of such Exchange
Registration Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time the representations
and warranties of the Company contemplated by Section 5 cease to be
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<PAGE> 9
true and correct in all material respects, (E) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Exchange Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, or
(F) at any time during the Resale Period when a prospectus is required
to be delivered under the Securities Act, that such Exchange
Registration Statement, prospectus, prospectus amendment or supplement
or post-effective amendment does not conform in all material respects
to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder or contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances then existing;
(iv) in the event that the Company would be required, pursuant to
Section 3(e)(iii)(F) above, to notify any broker-dealers holding
Exchange Securities, without delay prepare and furnish to each such
holder a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to purchasers of such Exchange
Securities during the Resale Period, such prospectus shall conform in
all material respects to the applicable requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(v)use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such Exchange Registration
Statement or any post-effective amendment thereto at the earliest
practicable date;
(vi) use its reasonable best efforts to (A) register or qualify the
Exchange Securities under the securities laws or blue sky laws of such
jurisdictions as are contemplated by Section 2(a) no later than the
commencement of the Exchange Offer and (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions
until the expiration of the Resale Period; provided, however, that the
Company shall not be required for any such purpose to (1) qualify as a
foreign corporation in any jurisdiction wherein it would not otherwise
be required to qualify but for the requirements of this Section
3(c)(vi), (2) consent to general service of process in any such
jurisdiction or (3) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its
stockholders;
(vii) use its reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Exchange
Registration, the Exchange Offer and the offering and sale of Exchange
Securities by broker-dealers during the Resale Period;
(viii) provide a CUSIP number for all Exchange Securities, not later
than the applicable Effective Time;
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<PAGE> 10
(ix) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as soon
as practicable but no later than eighteen months after the effective
date of such Exchange Registration Statement, an earning statement of
the Company and its subsidiaries complying with Section 11(a) of the
Securities Act (including, at the option of the Company, Rule 158
thereunder).
(d)In connection with the Company's obligations with respect to the Shelf
Registration, if applicable, the Company shall, as soon as practicable (or as
otherwise specified):
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<PAGE> 11
(i) prepare and file with the Commission, as soon as practicable but
in any case within the time periods specified in Section 2(b), a Shelf
Registration Statement on any form which may be utilized by the Company
and which shall register all of the Registrable Securities for resale
by the holders thereof in accordance with such method or methods of
disposition as may be specified by such of the holders as, from time to
time, may be Electing Holders and use its reasonable best efforts to
cause such Shelf Registration Statement to become effective as soon as
practicable but in any case within the time periods specified in
Section 2(b);
(ii) not less than 30 calendar days prior to the Effective Time of
the Shelf Registration Statement, mail the Notice and Questionnaire to
the holders of Registrable Securities; no holder shall be entitled to
be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no holder shall be entitled to
use the prospectus forming a part thereof for resales of Registrable
Securities at any time, unless such holder has returned a completed and
signed Notice and Questionnaire to the Company by the deadline for
response set forth therein; provided, however, holders of Registrable
Securities shall have at least 28 calendar days from the date on which
the Notice and Questionnaire is first mailed to such holders to return
a completed and signed Notice and Questionnaire to the Company;
(iii) after the Effective Time of the Shelf Registration Statement,
upon the request of any holder of Registrable Securities that is not
then an Electing Holder, as soon as practicable send a Notice and
Questionnaire to such holder; provided that the Company shall not be
required to take any action to name such holder as a selling
securityholder in the Shelf Registration Statement or to enable such
holder to use the prospectus forming a part thereof for resales of
Registrable Securities until such holder has returned a completed and
signed Notice and Questionnaire to the Company;
(iv) as soon as practicable prepare and file with the Commission
such amendments and supplements to such Shelf Registration Statement
and the prospectus included therein as may be necessary to effect and
maintain the effectiveness of such Shelf Registration Statement for the
period specified in Section 2(b) hereof and as may be required by the
applicable rules and regulations of the Commission and the instructions
applicable to the form of such Shelf Registration Statement, and
furnish to the Electing Holders copies of any such supplement or
amendment simultaneously with or prior to its being used or filed with
the Commission;
(v) comply with the provisions of the Securities Act with respect to
the disposition of all of the Registrable Securities covered by such
Shelf Registration Statement in accordance with the intended methods of
disposition by the Electing Holders provided for in such Shelf
Registration Statement;
(vi) provide (A) the Electing Holders, (B) the underwriters (which
term, for purposes of this Exchange and Registration Rights Agreement,
shall include a person deemed to be an underwriter within the meaning
of Section 2(a)(11) of the Securities Act), if any, thereof, (C) any
sales or placement agent therefor, (D) counsel for any such underwriter
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<PAGE> 12
or agent and (E) not more than one counsel for all the Electing Holders
the opportunity to participate in the preparation of such Shelf
Registration Statement, each prospectus included therein or filed with
the Commission and each amendment or supplement thereto;
(vii) for a reasonable period prior to the filing of such Shelf
Registration Statement, and throughout the period specified in Section
2(b), make available at reasonable times at the Company's principal
place of business or such other reasonable place determined by the
Company for inspection by the persons referred to in Section 3(d)(vi)
who shall certify to the Company in writing that they have a current
intention to sell the Registrable Securities pursuant to the Shelf
Registration such financial and other information and books and records
of the Company, and cause the officers, employees, counsel and
independent certified public accountants of the Company to respond to
such inquiries, as shall be reasonably necessary, in the judgment of
the respective counsel referred to in such Section, to conduct a
reasonable investigation within the meaning of Section 11 of the
Securities Act; provided, however, that each such party shall be
required to maintain in confidence and not to disclose to any other
person any information or records reasonably designated by the Company
as being confidential, until such time as (A) such information becomes
a matter of public record (whether by virtue of its inclusion in such
registration statement or otherwise), or (B) such person shall be
required so to disclose such information pursuant to a subpoena or
order of any court or other governmental agency or body having
jurisdiction over the matter (subject to the requirements of such
order, and only after such person shall have given the Company prompt
prior written notice of such requirement), or (C) such information is
required to be set forth in such Shelf Registration Statement or the
prospectus included therein or in an amendment to such Shelf
Registration Statement or an amendment or supplement to such prospectus
in order that such Shelf Registration Statement, prospectus, amendment
or supplement, as the case may be, complies with applicable
requirements of the federal securities laws and the rules and
regulations of the Commission and does not contain an untrue statement
of a material fact or omit to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(viii) promptly notify each of the Electing Holders, any sales or
placement agent therefor and any underwriter thereof (which
notification may be made through any managing underwriter that is a
representative of such underwriter for such purpose) and confirm such
advice in writing, (A) when such Shelf Registration Statement or the
prospectus included therein or any prospectus amendment or supplement
or post-effective amendment has been filed, and, with respect to such
Shelf Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any comments by the Commission and by
the blue sky or securities commissioner or regulator of any state with
respect thereto or any request by the Commission for amendments or
supplements to such Shelf Registration Statement or prospectus or for
additional information, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such Shelf Registration
Statement or the initiation or threatening of any proceedings for that
purpose, (D) if at any time the representations
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<PAGE> 13
and warranties of the Company contemplated by Section 3(d)(xvii) or
Section 5 cease to be true and correct in all material respects, (E) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, or (F) if at any time when a prospectus is required
to be delivered under the Securities Act, that such Shelf Registration
Statement, prospectus, prospectus amendment or supplement or
post-effective amendment does not conform in all material respects to
the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder or contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances then existing;
(ix) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of such registration statement or
any post-effective amendment thereto at the earliest practicable date;
(x) if requested by any managing underwriter or underwriters, any
placement or sales agent or any Electing Holder, promptly incorporate
in a prospectus supplement or post-effective amendment such information
as is required by the applicable rules and regulations of the
Commission and as such managing underwriter or underwriters, such agent
or such Electing Holder specifies in writing should be included therein
relating to the terms of the sale of such Registrable Securities,
including information with respect to the principal amount of
Registrable Securities being sold by such Electing Holder or agent or
to any underwriters, the name and description of such Electing Holder,
agent or underwriter, the offering price of such Registrable Securities
and any discount, commission or other compensation payable in respect
thereof, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the offering of the Registrable
Securities to be sold by such Electing Holder or agent or to such
underwriters; and make all required filings of such prospectus
supplement or post-effective amendment promptly after notification of
the matters to be incorporated in such prospectus supplement or
post-effective amendment;
(xi) furnish or make available to each Electing Holder, each
placement or sales agent, if any, therefor, each underwriter, if any,
thereof and the respective counsel referred to in Section 3(d)(vi) an
executed copy (or, in the case of an Electing Holder, a conformed copy)
of such Shelf Registration Statement, each such amendment and
supplement thereto (in each case including all exhibits thereto (in the
case of an Electing Holder of Registrable Securities, upon request) and
documents incorporated by reference therein) and such number of copies
of such Shelf Registration Statement (excluding exhibits thereto and
documents incorporated by reference therein unless specifically so
requested by such Electing Holder, agent or underwriter, as the case
may be) and of the prospectus included in such Shelf Registration
Statement (including each preliminary prospectus and any summary
prospectus), in conformity in all material respects with the applicable
requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder, and such other
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<PAGE> 14
documents, as such Electing Holder, agent, if any, and underwriter, if
any, may reasonably request in order to facilitate the offering and
disposition of the Registrable Securities owned by such Electing
Holder, offered or sold by such agent or underwritten by such
underwriter and to permit such Electing Holder, agent and underwriter
to satisfy the prospectus delivery requirements of the Securities Act;
and the Company hereby consents to the use of such prospectus
(including such preliminary and summary prospectus) and any amendment
or supplement thereto by each such Electing Holder and by any such
agent and underwriter, in each case in the form most recently provided
to such person by the Company, in connection with the offering and sale
of the Registrable Securities covered by the prospectus (including such
preliminary and summary prospectus) or any supplement or amendment
thereto;
(xii) use its reasonable best efforts to (A) register or qualify the
Registrable Securities to be included in such Shelf Registration
Statement under such securities laws or blue sky laws of such
jurisdictions as any Electing Holder and each placement or sales agent,
if any, therefor and underwriter, if any, thereof shall reasonably
request and (B) keep such registrations or qualifications in effect and
comply with such laws so as to permit the continuance of offers, sales
and dealings therein in such jurisdictions during the period the Shelf
Registration is required to remain effective under Section 2(b) above
and for so long as may be necessary to enable any such Electing Holder,
agent or underwriter to complete its distribution of Securities
pursuant to such Shelf Registration Statement; provided, however, that
the Company shall not be required for any such purpose to (1) qualify
as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Section 3(d)(xii), (2) consent to general service of process in any
such jurisdiction or (3) make any changes to its certificate of
incorporation or by-laws or any agreement between it and its
stockholders;
(xiii) use its reasonable best efforts to obtain the consent or
approval of each governmental agency or authority, whether federal,
state or local, which may be required to effect the Shelf Registration
or the offering or sale in connection therewith or to enable the
selling holder or holders to offer, or to consummate the disposition
of, their Registrable Securities;
(xiv) unless any Registrable Securities shall be in book-entry only
form, cooperate with the Electing Holders and the managing
underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold, which
certificates, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or
engraved, or produced by any combination of such methods, on steel
engraved borders, and which certificates shall not bear any restrictive
legends; and, in the case of an underwritten offering, enable such
Registrable Securities to be in such denominations and registered in
such names as the managing underwriters may request at least two
business days prior to any sale of the Registrable Securities;
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(xv) provide a CUSIP number for all Registrable Securities, not
later than the applicable Effective Time;
(xvi) enter into underwriting agreements, engagement letters, agency
agreements, "best efforts" underwriting agreements or similar
agreements, as appropriate, including customary provisions relating to
indemnification and contribution, and take such other actions in
connection therewith as any Electing Holders aggregating at least 20%
in aggregate principal amount of the Registrable Securities at the time
outstanding shall request in order to expedite or facilitate the
disposition of such Registrable Securities; provided, however, that the
Company shall not be required to enter into any such agreement more
than once with respect to all of the Registrable Securities;
(xvii) if an agreement of the type referred to in Section 3(d)(xvi)
hereof is entered into, (A) make such representations and warranties to
the Electing Holders and the placement or sales agent, if any, therefor
and the underwriters, if any, thereof in form, substance and scope as
are customarily made in connection with an offering of debt securities
pursuant to any appropriate agreement or to a registration statement
filed on the form applicable to the Shelf Registration; (B) obtain an
opinion of counsel to the Company in customary form and covering such
matters, of the type customarily covered by such an opinion, as the
managing underwriters, if any, or as any Electing Holders of at least
20% in aggregate principal amount of the Registrable Securities at the
time outstanding may reasonably request, addressed to such Electing
Holder or Electing Holders and the placement or sales agent, if any,
therefor and the underwriters, if any, thereof and dated the effective
date of such Shelf Registration Statement (and if such Shelf
Registration Statement contemplates an underwritten offering of a part
or all of the Registrable Securities, dated the date of the closing
under the underwriting agreement relating thereto) (it being agreed
that the matters to be covered by such opinion shall include the due
incorporation and good standing of the Company and its subsidiaries;
the qualification of the Company and its subsidiaries to transact
business as foreign corporations; the due authorization, execution and
delivery of the relevant agreement of the type referred to in Section
3(d)(xvi) hereof; the due authorization, execution, authentication and
issuance, and the validity and enforceability, of the Securities; the
absence of legal or governmental proceedings involving the Company that
would have material adverse effect; the absence of a breach by the
Company or any of its subsidiaries of, or a default under, material
agreements binding upon the Company or any subsidiary of the Company as
a result of the offering of the Securities; the absence of governmental
approvals required to be obtained in connection with the Shelf
Registration, the offering and sale of the Registrable Securities, this
Exchange and Registration Rights Agreement or any agreement of the type
referred to in Section 3(d)(xvi) hereof, except such approvals as may
be required under state securities or blue sky laws; the material
compliance as to form of such Shelf Registration Statement and any
documents incorporated by reference therein and of the Indenture with
the requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission thereunder, respectively;
and, as of the date of the opinion and of the Shelf Registration
Statement or most recent post-effective amendment thereto, as the case
may be, the absence from such Shelf Registration
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<PAGE> 16
Statement and the prospectus included therein, as then amended or
supplemented, and from the documents incorporated by reference therein
(in each case other than the financial statements and other financial
information contained therein) of an untrue statement of a material
fact or the omission to state therein a material fact necessary to make
the statements therein not misleading (in the case of such documents,
in the light of the circumstances existing at the time that such
documents were filed with the Commission under the Exchange Act)); (C)
obtain a "cold comfort" letter or letters from the independent
certified public accountants of the Company addressed to the selling
Electing Holders, the placement or sales agent, if any, therefor or the
underwriters, if any, thereof, dated (i) the effective date of such
Shelf Registration Statement and (ii) the effective date of any
prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the
latest such statements included in such prospectus (and, if such Shelf
Registration Statement contemplates an underwritten offering pursuant
to any prospectus supplement to the prospectus included in such Shelf
Registration Statement or post-effective amendment to such Shelf
Registration Statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the
latest such statements included in such prospectus, dated the date of
the closing under the underwriting agreement relating thereto), such
letter or letters to be in customary form and covering such matters of
the type customarily covered by letters of such type; (D) deliver such
documents and certificates, including officers' certificates, as may be
reasonably requested by any Electing Holders of at least 20% in
aggregate principal amount of the Registrable Securities at the time
outstanding or the placement or sales agent, if any, therefor and the
managing underwriters, if any, thereof to evidence the accuracy of the
representations and warranties made pursuant to clause (A) above or
those contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the
underwriting agreement or other agreement entered into by the Company;
and (E) undertake such obligations relating to expense reimbursement,
indemnification and contribution as are provided for in Section 6
hereof.
(xviii) notify in writing each holder of Registrable Securities of
any proposal by the Company to amend or waive any provision of this
Exchange and Registration Rights Agreement pursuant to Section 9(h)
hereof and of any amendment or waiver effected pursuant thereto, each
of which notices shall contain the text of the amendment or waiver
proposed or effected, as the case may be;
(xix) in the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate
as a member of an underwriting syndicate or selling group or "assist in
the distribution" (within the meaning of the Conduct Rules (the
"Conduct Rules) of the National Association of Securities Dealers, Inc.
("NASD") or any successor thereto, as amended from time to time)
thereof, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in
respect thereof, or otherwise, assist such broker-dealer in complying
with the requirements of such Conduct Rules, including by (A) if such
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<PAGE> 17
Conduct Rules shall so require, engaging a "qualified independent
underwriter" (as defined in such Conduct Rules) to participate in the
preparation of the Shelf Registration Statement relating to such
Registrable Securities, to exercise usual standards of due diligence in
respect thereto and, if any portion of the offering contemplated by
such Shelf Registration Statement is an underwritten offering or is
made through a placement or sales agent, to recommend the yield of such
Registrable Securities, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 6 hereof (or to such other customary extent as may
be requested by such underwriter), and (C) providing such information
to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Conduct Rules; and
(xx) comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as soon
as practicable but in any event not later than eighteen months after
the effective date of such Shelf Registration Statement, an earning
statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act (including, at the option of the Company,
Rule 158 thereunder).
(e)In the event that the Company would be required, pursuant to Section
3(d)(viii)(F) above, to notify the Electing Holders, the placement or sales
agent, if any, therefor and the managing underwriters, if any, thereof, the
Company shall without delay prepare and furnish to each of the Electing
Holders, to each placement or sales agent, if any, and to each such
underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material
respects to the applicable requirements of the Securities Act and the Trust
Indenture Act and the rules and regulations of the Commission thereunder and
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing. Each Electing Holder agrees that upon receipt of any notice from
the Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder
shall forthwith discontinue the disposition of Registrable Securities
pursuant to the Shelf Registration Statement applicable to such Registrable
Securities until such Electing Holder shall have received copies of such
amended or supplemented prospectus, and if so directed by the Company, such
Electing Holder shall deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Electing Holder's
possession of the prospectus covering such Registrable Securities at the time
of receipt of such notice.
(f)In the event of a Shelf Registration, in addition to the information
required to be provided by each Electing Holder in its Notice Questionnaire,
the Company may require such Electing Holder to furnish to the Company such
additional information regarding such Electing Holder and such Electing
Holder's intended method of distribution of Registrable Securities as may be
required in order to comply with the Securities Act. No Electing Holder may
include any of its Registrable Securities in any Shelf Registration pursuant
to this Agreement unless and until such Electing Holder furnishes to the
Company, in writing, such information as is required by applicable law for
use in connection with any Shelf Registration or related prospectus or
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<PAGE> 18
preliminary prospectus. Each such Electing Holder agrees to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Electing Holder to the Company or of the
occurrence of any event in either case as a result of which any prospectus
relating to such Shelf Registration contains or would contain an untrue
statement of a material fact regarding such Electing Holder or such Electing
Holder's intended method of disposition of such Registrable Securities or
omits to state any material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable
Securities required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing, and
promptly to furnish to the Company any additional information required to
correct and update any previously furnished information or required so that
such prospectus shall not contain, with respect to such Electing Holder or
the disposition of such Registrable Securities, an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing.
(g)Until the expiration of two years after the Closing Date, the Company
will not, and will not permit any of its "affiliates" (as defined in Rule
144) to, resell any of the Securities that have been reacquired by any of
them except pursuant to an effective registration statement under the
Securities Act.
4. Registration Expenses.
The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and any
NASD registration, filing and review fees and expenses including fees and
disbursements of counsel for the placement or sales agent or underwriters in
connection with such registration, filing and review, (b) all fees and expenses
in connection with the qualification of the Securities for offering and sale
under the State securities and blue sky laws referred to in Section 3(d)(xii)
hereof and determination of their eligibility for investment under the laws of
such jurisdictions as any managing underwriters or the Electing Holders may
designate, including any fees and disbursements of counsel for the Electing
Holders or underwriters in connection with such qualification and determination,
(c) all expenses relating to the preparation, printing, production, distribution
and reproduction of each registration statement required to be filed hereunder,
each prospectus included therein or prepared for distribution pursuant hereto,
each amendment or supplement to the foregoing, the expenses of preparing the
Securities for delivery and the expenses of printing or producing any
underwriting agreements, agreements among underwriters, selling agreements and
blue sky or legal investment memoranda and all other documents in connection
with the offering, sale or delivery of Securities to be disposed of (including
certificates representing the Securities), (d) delivery expenses relating to the
offering, sale or delivery of Securities and the preparation of documents
referred in clause (c) above, (e) fees and expenses of the Trustee under the
Indenture, any agent of the Trustee and any counsel for the Trustee and of any
collateral agent or custodian, (f) internal expenses (including all salaries and
expenses of the Company's officers and employees performing legal or accounting
duties), (g) fees, disbursements and expenses of counsel and independent
certified public accountants of the Company (including the expenses of any
opinions or "cold comfort" letters required by or incident to such performance
and compliance), (h) fees, disbursements and expenses of any "qualified
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<PAGE> 19
independent underwriter" engaged pursuant to Section 3(d)(xix) hereof, (i) fees,
disbursements and expenses of one counsel for the Electing Holders retained in
connection with a Shelf Registration, as selected by the Electing Holders of at
least a majority in aggregate principal amount of the Registrable Securities
held by Electing Holders (which counsel shall be reasonably satisfactory to the
Company), (j) any fees charged by securities rating services for rating the
Securities, and (k) fees, expenses and disbursements of any other persons,
including special experts, retained by the Company in connection with such
registration (collectively, the "Registration Expenses"). To the extent that any
reasonable Registration Expenses are incurred, assumed or paid by any holder of
Registrable Securities or any placement or sales agent therefor or underwriter
thereof, the Company shall reimburse such person for the full amount of the
Registration Expenses so incurred, assumed or paid promptly after receipt of a
request therefor. Notwithstanding the foregoing, the holders of the Registrable
Securities being registered shall pay all agency fees and commissions and
underwriting discounts and commissions attributable to the sale of such
Registrable Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such holders (severally or jointly), other than
the counsel and experts specifically referred to above.
5. Representations and Warranties.
The Company represents and warrants to, and agrees with, each Purchaser
and each of the holders from time to time of Registrable Securities that:
(a)Each registration statement covering Registrable Securities and each
prospectus (including any preliminary or summary prospectus) contained
therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and any
further amendments or supplements to any such registration statement or
prospectus, when it becomes effective or is filed with the Commission, as the
case may be, and, in the case of an underwritten offering of Registrable
Securities, at the time of the closing under the underwriting agreement
relating thereto, will conform in all material respects to the requirements
of the Securities Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and at all times subsequent to the Effective Time when a prospectus would be
required to be delivered under the Securities Act, other than from (i) such
time as a notice has been given to holders of Registrable Securities pursuant
to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof until (ii) such time
as the Company furnishes an amended or supplemented prospectus pursuant to
Section 3(e) or Section 3(c)(iv) hereof, each such registration statement,
and each prospectus (including any summary prospectus) contained therein or
furnished pursuant to Section 3(d) or Section 3(c) hereof, as then amended or
supplemented, will conform in all material respects to the requirements of
the Securities Act and the Trust Indenture Act and the rules and regulations
of the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of
the circumstances then existing; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by a holder of Registrable Securities expressly for use therein.
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(b)Any documents incorporated by reference in any prospectus referred to
in Section 5(a) hereof, when they become or became effective or are or were
filed with the Commission, as the case may be, will conform or conformed in
all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and none of such documents will contain or
contained an untrue statement of a material fact or will omit or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to the Company by a holder of Registrable Securities expressly for use
therein.
(c)The compliance by the Company with all of the provisions of this
Exchange and Registration Rights Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any subsidiary of the Company is a party
or by which the Company or any subsidiary of the Company is bound or to which
any of the property or assets of the Company or any subsidiary of the Company
is subject, nor will such action result in any violation of the provisions of
the certificate of incorporation, as amended, or the by-laws of the Company
or any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any subsidiary of the
Company or any of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the consummation by the Company
of the transactions contemplated by this Exchange and Registration Rights
Agreement, except the registration under the Securities Act of the
Securities, qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications as
may be required under State securities or blue sky laws in connection with
the offering and distribution of the Securities.
(d)This Exchange and Registration Rights Agreement has been duly
authorized, executed and delivered by the Company.
6. Indemnification.
(a)Indemnification by the Company. The Company will indemnify and hold
harmless each of the holders of Registrable Securities included in an
Exchange Registration Statement, each of the Electing Holders of Registrable
Securities included in a Shelf Registration Statement and each person who
participates as a placement or sales agent or as an underwriter in any
offering or sale of such Registrable Securities against any losses, claims,
damages or liabilities, joint or several, to which such holder, agent or
underwriter may become subject under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Exchange Registration Statement
or Shelf Registration Statement,
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as the case may be, under which such Registrable Securities were registered
under the Securities Act, or any preliminary, final or summary prospectus
contained therein or furnished by the Company to any such holder, Electing
Holder, agent or underwriter, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse such holder, such
Electing Holder, such agent and such underwriter for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such person in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, or
preliminary, final or summary prospectus, or amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by such person expressly for use therein ; and provided, further,
that with respect to any untrue statement or omission of a material fact made
in such Exchange Registration Statement or Shelf Registration Statement or
any amendment thereto, the indemnity agreement contained in this Section 6(a)
shall not inure to the benefit of any person from whom the person asserting
any such loss, claim, damage or liability purchased the Securities concerned,
to the extent that any such loss, claim, damage or liability of such person
occurs under the circumstance where it shall have been determined by a court
of competent jurisdiction by final and nonappealable judgment that (w) the
Company had previously furnished copies of the Exchange Registration
Statement or Shelf Registration Statement to such person or their
representative, (x) delivery of the Exchange Registration Statement or Shelf
Registration Statement was required to be made to such person, (y) the untrue
statement or omission of a material fact contained in the Exchange
Registration Statement or Shelf Registration Statement was corrected by an
amendment or supplement to the prospectus (including any summary prospectus)
forming a part thereof, and (z) there was not sent or given to the person, at
or prior to the written confirmation of the sale of such Securities to such
person, a copy of the amended or supplemented Exchange Registration Statement
or Shelf Registration Statement.
(b)Indemnification by the Holders and any Agents and Underwriters. The
Company may require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Section 2(b) hereof and to
entering into any underwriting agreement with respect thereto, that the
Company shall have received an undertaking reasonably satisfactory to it from
the Electing Holder of such Registrable Securities and from each underwriter
named in any such underwriting agreement, severally and not jointly, to (i)
indemnify and hold harmless the Company, and all other holders of Registrable
Securities, against any losses, claims, damages or liabilities to which the
Company or such other holders of Registrable Securities may become subject,
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in such registration statement, or any preliminary, final or
summary prospectus contained therein or furnished by the Company to any such
Electing Holder, agent or underwriter, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
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statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder or underwriter expressly for use therein, and (ii) reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that no such Electing Holder shall
be required to undertake liability to any person under this Section 6(b) for
any amounts in excess of the dollar amount of the proceeds to be received by
such Electing Holder from the sale of such Electing Holder's Registrable
Securities pursuant to such registration.
(c)Notices of Claims, Etc. Promptly after receipt by an indemnified party
under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnifying party pursuant to the indemnification
provisions of or contemplated by this Section 6, notify such indemnifying
party in writing of the commencement of such action; but the omission so to
notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under the indemnification
provisions of or contemplated by Section 6(a) or 6(b) hereof. In case any
such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d)Contribution. If for any reason the indemnification provisions
contemplated by Section 6(a) or Section 6(b) are unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by such indemnifying party or
by such indemnified party, and the
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<PAGE> 23
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree that
it would not be just and equitable if contributions pursuant to this Section
6(d) were determined by pro rata allocation (even if the holders or any
agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 6(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no holder shall be required to contribute any amount in excess
of the amount by which the dollar amount of the proceeds received by such
holder from the sale of any Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) exceeds the amount of any
damages which such holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and
no underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The holders' and any underwriters' obligations
in this Section 6(d) to contribute shall be several in proportion to the
principal amount of Registrable Securities registered or underwritten, as
the case may be, by them and not joint.
(e)The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director and
partner of each holder, agent and underwriter and each person, if any, who
controls any holder, agent or underwriter within the meaning of the
Securities Act; and the obligations of the holders and any agents or
underwriters contemplated by this Section 6 shall be in addition to any
liability which the respective holder, agent or underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each officer
and director of the Company (including any person who, with his consent, is
named in any registration statement as about to become a director of the
Company) and to each person, if any, who controls the Company within the
meaning of the Securities Act.
7. Underwritten Offerings.
(a)Selection of Underwriters. If any of the Registrable Securities covered
by the Shelf Registration are to be sold pursuant to an underwritten
offering, the managing underwriter or underwriters thereof shall be
designated by Electing Holders holding at least a majority in aggregate
principal amount of the Registrable Securities to be included in such
offering, provided that such designated managing underwriter or underwriters
is or are reasonably acceptable to the Company.
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(b)Participation by Holders. Each holder of Registrable Securities hereby
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
8. Rule 144.
The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the written request of any holder of Registrable
Securities in connection with that holder's sale pursuant to Rule 144, the
Company shall deliver to such holder a written statement as to whether it has
complied with such requirements.
9. Miscellaneous.
(a)No Inconsistent Agreements. The Company represents, warrants, covenants
and agrees that it has not granted, and shall not grant, registration rights
with respect to Registrable Securities or any other securities which would be
inconsistent with the terms contained in this Exchange and Registration
Rights Agreement.
(b)Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the holders from time to
time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Purchasers and such holders, in
addition to any other remedy to which they may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations
of the Company under this Exchange and Registration Rights Agreement in
accordance with the terms and conditions of this Exchange and Registration
Rights Agreement, in any court of the United States or any State thereof
having jurisdiction.
(c)Notices. All notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, if delivered personally or by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to
it at 100 West Putnam Avenue, Greenwich, Connecticut 06830, and if to a
holder,
24
<PAGE> 25
to the address of such holder set forth in the security register or other
records of the Company, or to such other address as the Company or any such
holder may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon
receipt.
(d)Parties in Interest. All the terms and provisions of this Exchange and
Registration Rights Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the parties hereto and the holders
from time to time of the Registrable Securities and the respective successors
and assigns of the parties hereto and such holders. In the event that any
transferee of any holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of
law or otherwise, such transferee shall, without any further writing or
action of any kind, be deemed a beneficiary hereof for all purposes and such
Registrable Securities shall be held subject to all of the terms of this
Exchange and Registration Rights Agreement, and by taking and holding such
Registrable Securities such transferee shall be entitled to receive the
benefits of, and be conclusively deemed to have agreed to be bound by all of
the applicable terms and provisions of this Exchange and Registration Rights
Agreement. If the Company shall so request, any such successor, assign or
transferee shall agree in writing to acquire and hold the Registrable
Securities subject to all of the applicable terms hereof.
(e)Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Exchange and
Registration Rights Agreement or made pursuant hereto shall remain in full
force and effect regardless of any investigation (or statement as to the
results thereof) made by or on behalf of any holder of Registrable
Securities, any director, officer or partner of such holder, any agent or
underwriter or any director, officer or partner thereof, or any controlling
person of any of the foregoing, and shall survive delivery of and payment for
the Registrable Securities pursuant to the Purchase Agreement and the
transfer and registration of Registrable Securities by such holder and the
consummation of an Exchange Offer.
(f)GOVERNING LAW. THIS EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
(g)Headings. The descriptive headings of the several Sections and
paragraphs of this Exchange and Registration Rights Agreement are inserted
for convenience only, do not constitute a part of this Exchange and
Registration Rights Agreement and shall not affect in any way the meaning or
interpretation of this Exchange and Registration Rights Agreement.
(h)Entire Agreement; Amendments. This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the Indenture
and the form of Securities) or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Exchange and Registration Rights Agreement supersedes
all prior agreements and understandings between the parties with respect to
its subject matter. This Exchange and Registration Rights Agreement may be
amended and the observance of any term of this Exchange and Registration
Rights Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively) only by a written instrument duly
executed by the Company and the holders of at least a majority in
25
<PAGE> 26
aggregate principal amount of the Registrable Securities at the time
outstanding. Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 9(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or
is delivered to such holder.
26
<PAGE> 27
(i)Inspection. For so long as this Exchange and Registration Rights
Agreement shall be in effect, this Exchange and Registration Rights Agreement
and a complete list of the names and addresses of all the holders of
Registrable Securities shall be made available for inspection and copying on
any business day by any holder of Registrable Securities for proper purposes
only (which shall include any purpose related to the rights of the holders of
Registrable Securities under the Securities, the Indenture and this
Agreement) at the offices of the Company at the address thereof set forth in
Section 9(c) above and at the office of the Trustee under the Indenture.
(j)Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
UST Inc.
By: _______________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Fleet Securities, Inc.
_______________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
27
<PAGE> 28
EXHIBIT A
UST INC.
INSTRUCTION TO DTC PARTICIPANTS
(DATE OF MAILING)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE] *
The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in the UST Inc. (the "Company") __% Notes due
2009 (the "Securities") are held.
The Company is in the process of registering the Securities under the Securities
Act of 1933 for resale by the beneficial owners thereof. In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.
It is important that beneficial owners of the Securities receive a copy of the
enclosed materials as soon as possible as their rights to have the Securities
included in the registration statement depend upon their returning the Notice
and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact UST Inc, 100 West
Putnam Avenue, Greenwich, Connecticut 06830 (212) 661-1100.
- --------
* Not less than 28 calendar days from date of mailing.
A-1
<PAGE> 29
UST INC.
NOTICE OF REGISTRATION STATEMENT
AND
SELLING SECURITYHOLDER QUESTIONNAIRE
(DATE)
Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Exchange and Registration Rights Agreement") between UST Inc. (the "Company")
and the Purchasers named therein. Pursuant to the Exchange and Registration
Rights Agreement, the Company has filed with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form [__]
(the "Shelf Registration Statement") for the registration and resale under Rule
415 of the Securities Act of 1933, as amended (the "Securities Act"), of the
Company's X% Notes due 2009 (the "Securities"). A copy of the Exchange and
Registration Rights Agreement is attached hereto. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the
Exchange and Registration Rights Agreement.
Each beneficial owner of Registrable Securities (as defined below) is entitled
to have the Registrable Securities beneficially owned by it included in the
Shelf Registration Statement. In order to have Registrable Securities included
in the Shelf Registration Statement, this Notice of Registration Statement and
Selling Securityholder Questionnaire ("Notice and Questionnaire") must be
completed, executed and delivered to the Company's counsel at the address set
forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners
of Registrable Securities who do not complete, execute and return this Notice
and Questionnaire by such date (i) will not be named as selling securityholders
in the Shelf Registration Statement and (ii) may not use the Prospectus forming
a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.
The term "Registrable Securities" is defined in the Exchange and Registration
Rights Agreement.
A-2
<PAGE> 30
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Exchange and Registration Rights
Agreement, including, without limitation, Section 6 of the Exchange and
Registration Rights Agreement, as if the undersigned Selling Securityholder were
an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and
as Exhibit B to the Exchange and Registration Rights Agreement.
The Selling Securityholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
A-3
<PAGE> 31
QUESTIONNAIRE
(1)(a)Full Legal Name of Selling Securityholder:
_________________________________________________________________________
(b)Full Legal Name of Registered Holder (if not the same as in (a) above) of
Registrable Securities Listed in Item (3) below:
_________________________________________________________________________
(c)Full Legal Name of DTC Participant (if applicable and if not the same as
(b) above) Through Which Registrable Securities Listed in Item (3) below
are Held:
_________________________________________________________________________
(2) Address for Notices to Selling Securityholder:
___________________________
___________________________
___________________________
___________________________
Telephone: ___________________________
Fax: ___________________________
Contact Person:___________________________
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities.
(a)Principal amount of Registrable Securities beneficially owned:___________
CUSIP No(s). of such Registrable Securities:_____________________________
(b)Principal amount of Securities other than Registrable Securities
beneficially owned:
_________________________________________________________________________
CUSIP No(s). of such other Securities:___________________________________
(c)Principal amount of Registrable Securities which the undersigned wishes to
be included in the Shelf Registration Statement:_________________________
CUSIP No(s). of such Registrable Securities to be included in the Shelf
Registration Statement:__________________________________________________
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned Selling
Securityholder is not the beneficial or registered owner of any other
securities of the Company, other than the Securities listed above in Item
(3).
State any exceptions here:
A-4
<PAGE> 32
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any of
its affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during
the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder intends
to distribute the Registrable Securities listed above in Item (3) only as
follows (if at all): Such Registrable Securities may be sold from time to
time directly by the undersigned Selling Securityholder or, alternatively,
through underwriters, broker-dealers or agents. Such Registrable
Securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined
at the time of sale, or at negotiated prices. Such sales may be effected
in transactions (which may involve crosses or block transactions) (i) on
any national securities exchange or quotation service on which the
Registered Securities may be listed or quoted at the time of sale, (ii) in
the over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv) through
the writing of options. In connection with sales of the Registrable
Securities or otherwise, the Selling Securityholder may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales
of the Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholder may also sell Registrable Securities
short and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to broker-dealers that
in turn may sell such securities.
State any exceptions here:
By signing below, the Selling Securityholder acknowledges that it understands
its obligation to comply, and agrees that it will comply, with the provisions of
the Exchange Act and the rules and regulations thereunder, particularly
Regulation M.
In the event that the Selling Securityholder transfers all or any portion of the
Registrable Securities listed in Item (3) above after the date on which such
information is provided to the Company, the Selling Securityholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Exchange and
Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and
related Prospectus. The Selling Securityholder understands that such information
will be relied upon by the Company in connection with the preparation of the
Shelf Registration Statement and related Prospectus.
A-5
<PAGE> 33
In accordance with the Selling Securityholder's obligation under Section 3(d) of
the Exchange and Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Exchange and Registration
Rights Agreement shall be made in writing, by hand-delivery, first-class mail,
or air courier guaranteeing overnight delivery as follows:
(i)To the Company:
[UST Inc.
100 West Putnam Avenue
Greenwich, Connecticut 06830]
(ii)With a copy to:
[Skadden, Arps, Slate, Meagher & Flom]
___________________________
___________________________
___________________________
___________________________
Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company's counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives, and assigns of the Company and the
Selling Securityholder (with respect to the Registrable Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above. This
Agreement shall be governed in all respects by the laws of the State of New
York.
A-6
<PAGE> 34
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated:__________
___________________________________________________________________
Selling Securityholder
(Print/type full legal name of beneficial owner of
Registrable Securities)
By:________________________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
[Skadden, Arps, Slate, Meagher & Flom]
___________________________
___________________________
___________________________
___________________________
A-7
<PAGE> 35
EXHIBIT B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
State Street Bank & Trust Company
UST Inc.
c/o State Street Bank and Trust Company
Corporate Trust Division
Two International Place,
Boston, MA 02110
Attention: Trust Officer
Re: UST Inc. (the "Company")
[__% Notes due 2009]
Dear Sirs:
Please be advised that has transferred $ aggregate principal amount of the above
reference Notes pursuant to an effective Registration Statement on Form [ ]
(File No. 333-_____) filed by the Company.
We hereby certify that a prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the Notes is named as a "Selling Holder" in the Prospectus
dated [date] or in supplements thereto, and that the aggregate principal amount
of the Notes transferred are the Notes listed in such Prospectus
opposite such owner's name.
Dated:
Very truly yours,
(Name)
By:
(Authorized Signature)
A-8
<PAGE> 1
EXHIBIT 5.1
August 16, 1999
UST Inc.
100 West Putnam Avenue
Greenwich, Connecticut 06830
Re: UST Inc. - Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special counsel for UST Inc., a
Delaware corporation (the "Company"), in connection with the Company's
public offering of up to $200,000,000 aggregate principal amount of
7.25% Senior Notes due 2009 (the "7.25% Notes") and up to $40,000,000
aggregate principal amount of Floating Rate Senior Notes due 2009 (the
"Floating Rate Notes", and together with the 7.25% Notes, the "Notes").
The Notes are to be issued pursuant to an exchange offer (the "Exchange
Offer") in exchange for a like principal amount of the Company's issued
and outstanding 7.25% Senior Notes due 2009 and Floating Rate Senior
Notes due 2009 (collectively the "Old Notes") under an indenture dated
as of May 27, 1999 between the Company and State Street Bank and Trust
Company, as Trustee (the "Indenture").
This opinion is being furnished in accordance with
the requirements of Item 601(b)(5) of Regulation S-K under the
Securities Act of 1933, as amended (the "Act").
In connection with this opinion, we have examined
originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement on Form S-4 (File No.
333- ), as filed with the Securities and Exchange Commission (the
"Commission") under the Act on August 16, 1999,
<PAGE> 2
UST Inc.
August 16, 1999
Page 2
Amendment No. 1 thereto as filed with the Commission on ______ __, 1999
(such Registration Statement, as so amended, the "Registration
Statement"); (ii) an executed copy of the Indenture; (iii) an executed
copy of the Exchange and Registration Rights Agreement dated May 27,
1999 by and among the Company, Goldman Sachs & Co., Morgan Stanley &
Co. Incorporated and Fleet Securities, Inc. (the "Registration Rights
Agreement"); (iv) the form of 7.25% Notes, Floating Rate Notes and a
specimen certificate of each; (v) the Form T-1 of the Trustee filed as
an exhibit to the Registration Statement; (vi) the Restated Articles of
Incorporation of the Company (the "Charter"); (vii) the By-laws of the
Company (the "By-laws"); and (viii) certain resolutions of the Board of
Directors of the Company. We have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such records
of the Company and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company and
others, and such other documents, certificates and records as we have
deemed necessary or appropriate as a basis for the opinions set forth
herein.
In our examination, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as
certified, conformed or photostatic copies and the authenticity of the
originals of such latter documents. In making our examination of
documents, we have assumed that such parties executed by parties
thereto, other than the Company, had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed
the due authorization by all requisite action, corporate or other, and
execution and delivery by such parties of such documents and the
validity and binding effect thereof on such parties. As to any facts
material to the opinions expressed herein which we did not
independently establish or verify, we have relied upon oral or written
statements and representations of officers and other representatives of
the Company and others.
Our opinions set forth herein are limited to Delaware
corporate law and the laws of the State of New York which are normally
applicable to transactions
<PAGE> 3
UST Inc.
August 16, 1999
Page 3
of the type contemplated by the Indenture and the Notes and to the
extent that judicial or regulatory orders or decrees or consents,
approvals, licenses, authorizations, validations, filings, recordings
or registrations with governmental authorities are relevant, to those
required under such laws (all of the foregoing being referred to as
"Opined on Law"). We do not express any opinion with respect to the law
of any jurisdiction other than Opined on Law or as to the effect of any
such non Opined on Law on the opinions herein stated.
Based upon and subject to the foregoing and the
limitations, qualifications, exceptions and assumptions set forth
herein, we are of the opinion that when the Notes have been duly
executed and authenticated in accordance with the terms of the
Indenture and delivered upon consummation of the Exchange Offer against
receipt of the Old Notes surrendered in exchange therefor in accordance
with the terms of the Exchange Offer, the Notes will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, except to the extent that (a) the enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforcement is considered in a proceeding
at law or in equity) and (b) the waiver contained in Section 515 of the
Indenture may be deemed unenforceable.
In rendering the opinions set forth above, we have
assumed that the execution and delivery by the Company of the Notes and
the Indenture and the performance by the Company of its obligations
thereunder do not and will not violate, conflict with or constitute a
default under any agreement or instrument to which the Company or its
properties is subject, except for those agreements and instruments
which were identified to us by the Company as being material to it and
which are listed in Part 2 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1998.
<PAGE> 4
UST Inc.
August 16, 1999
Page 4
We hereby consent to the filing of this opinion with
the Commission as an exhibit to the Registration Statement. We also
consent to the reference to our firm under the caption "Legal Matters"
in the Registration Statement. In giving this consent, we do not
thereby admit that we are included in the category of persons whose
consent is required under Section 7 of the Act or the rules and
regulations of the Commission.
Very truly yours,
<PAGE> 1
Exhibit 12.1
UST Inc.
Computation of Ratio of Earnings to Fixed Charges
(Unaudited)
The ratio of earnings to fixed charges is computed by dividing earnings by
fixed charges. For this ratio, earnings include net income before income taxes
and fixed charges, net of capitalized interest. Fixed charges include gross
interest expense, whether expensed or capitalized.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------------- --------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Total fixed charges $ 4,616 $ 4,792 $ 7,285 $ 8,744 $ 5,534 $ 2,807 $ 5,336
======== ======== ======== ======== ======== ======== ========
Net income before taxes $640,636 $704,590 $744,526 $703,857 $734,465 $372,809 $376,312
Add: Fixed charges 4,616 4,792 7,285 8,744 5,534 2,807 5,336
Amortization of interest
capitalized in prior periods -- -- -- -- 28 -- 28
Deduct: Capitalized interest -- -- -- (342) (1,119) (522) (507)
-------- -------- -------- -------- -------- -------- --------
Earnings before taxes and fixed charges $645,252 $709,382 $751,811 $712,259 $738,908 $375,094 $381,169
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 139.79 148.03 103.20 81.46 133.52 133.63 71.43
-------- -------- -------- -------- -------- -------- --------
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related prospectus of UST Inc. for the
registration of $200,000,000 7.25% Senior Notes due 2009 and $40,000,000
Floating Rate Senior Notes due 2009 and to the incorporation by reference
therein of our report dated February 8, 1999, with respect to the consolidated
financial statements of UST Inc. incorporated by reference in its Annual Report
(Form 10-K) for the year ended December 31, 1998, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Stamford, Connecticut
August 13, 1999
<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
---------------------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
[ ] Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
MASSACHUSETTS 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 FRANKLIN STREET, BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)
</TABLE>
MAUREEN SCANNELL BATEMAN, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
225 FRANKLIN STREET, BOSTON, MASSACHUSETTS 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
UST INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 06-1193986
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 WEST PUTNAM AVENUE, GREENWICH, CONNECTICUT 06830
(Address of principal executive offices) (Zip Code)
</TABLE>
$200,000,000 7.25% SENIOR NOTES DUE JUNE 1, 2009
$40,000,000 FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
(Title of indenture securities)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO WHICH IT
IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington, D.C.,
Federal Deposit Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent, State
Street Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as Exhibit 1
to Amendment No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of Massachusetts
that no certificate of authority for the trustee to commence business was
necessary or issued is on file with the Securities and Exchange Commission
as Exhibit 2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration Statement
of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by
reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS SPECIFIED IN
PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise corporate trust
powers is on file with the Securities and Exchange Commission as Exhibit 3
to Amendment No. 1 to the Statement of Eligibility and Qualification of
Trustee (Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibit 4 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
1
<PAGE> 3
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY SECTION
321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority is annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 10th of August 1999.
STATE STREET BANK AND TRUST COMPANY
By: /s/ JAMES E. MOGAVERO
----------------------------------
NAME: James E. Mogavero
TITLE: Vice President
2
<PAGE> 4
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by UST Inc. of its
$200,000,000 7.25% Senior Notes due June 1, 2009 and $40,000,000 Floating Rate
Senior Notes due June 1, 2009, we hereby consent that reports of examination by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ JAMES E. MOGAVERO
----------------------------------
NAME: James E. Mogavero
TITLE: Vice President
Dated: August 10, 1999
3
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business March 31, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
THOUSANDS OF
DOLLARS
------------
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........ $ 1,249,670
Interest-bearing balances................................. 13,236,699
Securities.................................................. 10,970,415
Federal funds sold and securities purchased under agreements
to resell in domestic offices of the bank and its Edge
subsidiary................................................ 9,561,556
Loans and lease financing receivables:
Loans and leases, net of unearned income.................. 7,053,580
Allowance for loan and lease losses....................... 85,416
Allocated transfer risk reserve........................... 0
Loans and leases, net of unearned income and allowances... 6,968,164
Assets held in trading accounts............................. 1,553,354
Premises and fixed assets................................... 536,535
Other real estate owned..................................... 0
Investments in unconsolidated subsidiaries.................. 606
Customers' liability to this bank on acceptances
outstanding............................................... 71,273
Intangible assets........................................... 207,323
Other assets................................................ 1,371,043
-----------
Total assets...................................... $45,726,638
===========
LIABILITIES
Deposits:
In domestic offices....................................... $10,101,297
Noninterest-bearing.................................... 6,932,549
Interest-bearing....................................... 3,168,748
In foreign offices and Edge subsidiary.................... 18,061,721
Noninterest-bearing.................................... 54,654
Interest-bearing....................................... 18,007,067
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge subsidiary........................................... 12,063,069
Demand notes issued to the U.S. Treasury.................... 149,322
Trading liabilities....................................... 1,140,080
Other borrowed money........................................ 285,027
Subordinated notes and debentures........................... 0
Bank's liability on acceptances executed and outstanding.... 71,273
Other liabilities........................................... 1,079,470
Total liabilities................................. 42,951,259
-----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............... 0
Common stock................................................ 29,931
Surplus..................................................... 480,330
Undivided profits and capital reserves/Net unrealized
holding gains (losses).................................... 2,258,177
Net unrealized holding gains (losses) on
available-for-sale securities.......................... 15,937
Cumulative foreign currency translation adjustments......... (8,996)
-----------
Total equity capital.............................. 2,775,379
-----------
Total liabilities and equity capital.............. $45,726,638
===========
</TABLE>
4
<PAGE> 6
I, Rex S. Schuette, Senior Vice President and Comptroller of the above
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
UST INC.
OFFER FOR ALL OUTSTANDING
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
IN EXCHANGE FOR
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE 2009
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO THE PROSPECTUS, DATED , 1999
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON
, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY
BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
Delivery To:
STATE STREET BANK AND TRUST COMPANY, Exchange Agent
<TABLE>
<S> <C>
By Hand or Overnight Delivery: By Registered or Certified Mail:
State Street Bank and Trust Company State Street Bank and Trust Company
Corporate Trust Division Corporate Trust Division
Two Avenue de Lafayette P.O. Box 778
Boston, MA 02111-1724 Boston, MA 02102-0778
Attention: Ralph Jones, LCC5 Attention: Ralph Jones, LCC5
</TABLE>
For Information Call:
(617) 662-1548
By Facsimile Transmission
(for Eligible Institutions Only):
(617) 662-1452
Confirm by Telephone:
(617) 662-1548
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY OF THIS LETTER OF TRANSMITTAL.
The undersigned acknowledges that he or she has received the Prospectus,
dated , 1999 (the "Prospectus"), of UST Inc., a Delaware
corporation (the "Company"), and this Letter of Transmittal (the "Letter"),
which together constitute the Company's offer (the "Exchange Offer") to exchange
an aggregate principal amount of up to $200,000,000 of the Company's 7.25%
Senior Notes due 2009 and an aggregate principal amount of up to $40,000,000
Floating Rate Senior Notes due 2009
<PAGE> 2
(collectively, the "Exchange Notes") which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for like principal
amounts of the Company's issued and outstanding 7.25% Senior Notes due 2009 and
Floating Rate Senior Notes due 2009 (collectively, the "Original Notes") from
the registered holders thereof (the "Holders").
For each Original Note accepted for exchange, the Holder of such Original
Note will receive an Exchange Note having a principal amount equal to that of
the surrendered Original Note. The Exchange Notes will bear interest from the
most recent date to which interest has been paid on the Original Notes exchanged
therefor or, if no interest has been paid on such Original Notes, from May 27,
1999. Accordingly, registered holders of Exchange Notes on the relevant record
date for the first interest payment date following the consummation of the
Exchange Offer will receive interest accruing from the most recent date on which
interest has been paid or, if no interest has been paid, from May 27, 1999.
Original Notes accepted for exchange will cease to accrue interest from and
after the date of consummation of the Exchange Offer. Holders of Original Notes
whose Original Notes are accepted for exchange will not receive any payment in
respect of accrued interest on such Original Notes otherwise payable on any
interest payment date the record date for which occurs on or after consummation
of the Exchange Offer.
This Letter is to be completed by a Holder of Original Notes either if
certificates are to be forwarded herewith or if a tender of certificates for
Original Notes, if available, is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Exchange Offer -- Book-Entry Transfers" section of the Prospectus. Holders of
Original Notes whose certificates are not immediately available, or who are
unable to deliver their certificates or confirmation of the book-entry tender of
their Original Notes into the Exchange Agent's account at the Book-Entry
Transfer Facility (a "Book-Entry Confirmation") and all other documents required
by this Letter to the Exchange Agent on or prior to the Expiration Date, must
tender their Original Notes according to the guaranteed delivery procedures set
forth in "The Exchange Offer -- Guaranteed Delivery Procedures" section of the
Prospectus. See Instruction 1. Delivery of documents to the Book-Entry Transfer
Facility does not constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
List below the Original Notes to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and principal amount of
Original Notes should be listed on a separate signed schedule affixed hereto.
2
<PAGE> 3
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES
------------------------------------------------------------------------------------------------------
1 2
AGGREGATE 3
NAME(S) AND ADDRESS(ES) OF REGISTERED PRINCIPAL PRINCIPAL
HOLDER(S) CERTIFICATE AMOUNT AMOUNT
TYPE (PLEASE FILL IN, IF BLANK) NUMBER(S)* REPRESENTED TENDERED**
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
----------------------------------------
7.25% Senior Notes ----------------------------------------
----------------------------------------
----------------------------------------
TOTAL
------------------------------------------------------------------------------------------------------
Floating Rate Senior ----------------------------------------
Notes ----------------------------------------
----------------------------------------
----------------------------------------
TOTAL
------------------------------------------------------------------------------------------------------
* Need not be completed if Original Notes are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the
Original Notes represented by the Original Notes indicated in column 2. See Instruction 2.
Original Notes tendered hereby must be in denominations of principal amount of $1,000 and any
integral multiple thereof. See Instruction 1.
------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK- ENTRY TRANSFER MADE TO THE ACCOUNT
MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ---------------------------------------------------------------------------
Account Number ---------------------------------- Transaction Code Number ------------------------
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY
PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) -----------------------------------------------------------------------
Window Ticket Number (if any) -------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery ----------------------------------------------------
Name of Institution Which Guaranteed Delivery --------------------------------------------------------
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number ---------------------------------- Transaction Code Number ------------------------
[ ] CHECK HERE IF TENDERED ORIGINAL NOTES ARE ENCLOSED HEREWITH.
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C>
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10
COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: -----------------------------------------------------------------------------------------------------
Address: ---------------------------------------------------------------------------------------------------
</TABLE>
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Original Notes that were acquired as a
result of market-making activities or other trading activities, it acknowledges
that it will deliver a prospectus meeting the requirements of the Securities Act
in connection with any resale of such Exchange Notes; however, by so
acknowledging and by delivering such a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. If the undersigned is a broker-dealer that will receive Exchange Notes, it
represents that the Original Notes to be exchanged for the Exchange Notes were
acquired as a result of market-making activities or other trading activities.
4
<PAGE> 5
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Original Notes indicated above. Subject to, and effective upon, the acceptance
for exchange of the Original Notes tendered hereby, the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to such Original Notes as are being tendered hereby.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the undersigned's true and lawful agent and attorney-in-fact with
respect to such tendered Original Notes, with full power of substitution, among
other things, to cause the Original Notes to be assigned, transferred and
exchanged. The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the Original
Notes, and to acquire Exchange Notes issuable upon the exchange of such tendered
Original Notes, and that, when the same are accepted for exchange, the Company
will acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim when
the same are accepted by the Company. The undersigned hereby further represents
that any Exchange Notes acquired in exchange for Original Notes tendered hereby
will have been acquired in the ordinary course of business of the person
receiving such Exchange Notes, whether or not such person is the undersigned,
that neither the Holder of such Original Notes nor any such other person is
participating in, intends to participate in or has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes and that neither the Holder of such Original Notes nor any such
other person is an "affiliate," as defined in Rule 405 under the Securities Act,
of the Company.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the Exchange Notes issued pursuant to the Exchange Offer in
exchange for the Original Notes may be offered for resale, resold and otherwise
transferred by Holders thereof (other than any such Holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are acquired
in the ordinary course of such Holders' business and such Holders have no
arrangement with any person to participate in the distribution of such Exchange
Notes. However, the SEC has not considered the Exchange Offer in the context of
a no-action letter and there can be no assurance that the staff of the SEC would
make a similar determination with respect to the Exchange Offer as in other
circumstances. If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Notes and has no arrangement or understanding to
participate in a distribution of Exchange Notes. If any Holder is an affiliate
of the Company, is engaged in or intends to engage in or has any arrangement or
understanding with respect to the distribution of the Exchange Notes to be
acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the
applicable interpretations of the staff of the SEC and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. If the undersigned is a broker-dealer
that will receive Exchange Notes for its own account in exchange for Original
Notes, it represents that the Original Notes to be exchanged for the Exchange
Notes were acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Notes; however, by so acknowledging and by delivering a prospectus
meeting the requirements of the Securities Act, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Original Notes tendered hereby. All
authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators,
5
<PAGE> 6
trustees in bankruptcy and legal representatives of the undersigned and shall
not be affected by, and shall survive, the death or incapacity of the
undersigned. This tender may be withdrawn only in accordance with the procedures
set forth in "The Exchange Offer -- Withdrawal Rights" section of the
Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes (and, if applicable,
substitute certificates representing Original Notes for any Original Notes not
exchanged) in the name of the undersigned or, in the case of a book-entry
delivery of Original Notes, please credit the account indicated above maintained
at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under
the box entitled "Special Delivery Instructions" below, please send the Exchange
Notes (and, if applicable, substitute certificates representing Original Notes
for any Original Notes not exchanged) to the undersigned at the address shown
above in the box entitled "Description of Original Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL
NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
ORIGINAL NOTES AS SET FORTH IN SUCH BOX ABOVE.
6
<PAGE> 7
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Original Notes not exchanged
and/or Exchange Notes are to be issued in the name of and sent to someone
other than the person or persons whose signature(s) appear(s) on this Letter
above, or if Original Notes delivered by book-entry transfer which are not
accepted for exchange are to be returned by credit to an account maintained at
the Book-Entry Transfer Facility other than the account indicated above.
Issue Exchange Notes and/or Original Notes to:
Name(s)
------------------------------------------
(PLEASE TYPE OR PRINT)
-----------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
-------------------------------------------
-----------------------------------------------------
(ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
[ ] Credit unexchanged Original Notes delivered by book-entry transfer to the
Book-Entry Trans fer Facility account set forth below.
-----------------------------------------------------
BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER, IF APPLICABLE)
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Original Notes not exchanged
and/or Exchange Notes are to be sent to someone other than the person or
persons whose signature(s) appear(s) on this Letter above or to such person or
persons at an address other than shown in the box entitled "Description of
Original Notes" on this Letter above.
Mail Exchange Notes and/or Original Notes to:
Name(s)
------------------------------------------
(PLEASE TYPE OR PRINT)
-----------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
-------------------------------------------
-----------------------------------------------------
(ZIP CODE)
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES FOR
ORIGINAL NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR
THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR
TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
7
<PAGE> 8
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 BELOW)
<TABLE>
<S> <C>
X ------------------------------------------------
--------------------------------------------, 1999
X ------------------------------------------------
--------------------------------------------, 1999
(SIGNATURE(S) OF OWNER) (DATE)
</TABLE>
Area Code and Telephone Number
- ---------------------------------------------------------------------
If a holder is tendering any Original Notes, this Letter must be signed by
the registered holder(s) as the name(s) appear(s) on the certificate(s) for the
Original Notes or by any person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, officer or other person acting in a fiduciary
or representative capacity, please set forth full title. See Instruction 3.
Name(s):
- --------------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Capacity:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDING ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution:
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
- --------------------------------------------------------------------------------
(TITLE)
- --------------------------------------------------------------------------------
(NAME AND FIRM)
Dated: -----------------------------------------------------------------, 1999
8
<PAGE> 9
INSTRUCTIONS
UST INC.
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER FOR THE
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
IN EXCHANGE FOR THE
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,
PURSUANT TO THE PROSPECTUS, DATED , 1999
1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES.
This Letter is to be completed by Holders of Original Notes either if
certificates are to be forwarded herewith or if tenders are to be made pursuant
to the procedures for delivery by book-entry transfer set forth in "The Exchange
Offer -- Book-Entry Transfers" section of the Prospectus. Certificates for all
physically tendered Original Notes, or Book-Entry Confirmation, as the case may
be, as well as a properly completed and duly executed Letter (or manually signed
facsimile hereof) and any other documents required by this Letter, must be
received by the Exchange Agent at the address set forth herein on or prior to
the Expiration Date, or the tendering holder must comply with the guaranteed
delivery procedures set forth below. Original Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple thereof.
Holders whose certificates for Original Notes are not immediately available
or who cannot deliver their certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date, or who cannot complete the
procedure for book-entry transfer on a timely basis, may tender their Original
Notes pursuant to the guaranteed delivery procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures" section of the Prospectus. Pursuant to
such procedures, (i) such tender must be made through an Eligible Institution,
(ii) prior to 5:00 p.m., New York City time, on the Expiration Date, the (as
defined herein) Exchange Agent must receive from such Eligible Institution a
properly completed and duly executed Letter (or a facsimile thereof) and Notice
of Guaranteed Delivery, substantially in the form provided by the Company (by
facsimile transmission, mail or hand delivery), setting forth the name and
address of the Holder of Original Notes and the amount of Original Notes
tendered, stating that the tender is being made thereby and guaranteeing that
within three New York Stock Exchange ("NYSE") trading days after the Expiration
Date, the certificates for all physically tendered Original Notes, in proper
form for transfer, or a Book-Entry Confirmation, as the case may be, and any
other documents required by this Letter will be deposited by the Eligible
Institution with the Exchange Agent, and (iii) the certificates for all
physically tendered Original Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and all other documents required by this
Letter, must be received by the Exchange Agent within three NYSE trading days
after the Expiration Date.
The method of delivery of this Letter, the Original Notes and all other
required documents is at the election and risk of the tendering Holders, but the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. If Original Notes are sent by mail, it is suggested that the
mailing be registered mail, properly insured, with return receipt requested,
made sufficiently in advance of the Expiration Date to permit delivery to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
See "The Exchange Offer" section of the Prospectus.
9
<PAGE> 10
2. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER).
If less than all of the Original Notes evidenced by a submitted certificate
are to be tendered, the tendering Holder(s) should fill in the aggregate
principal amount of Original Notes to be tendered in the box above entitled
"Description of Original Notes -- Principal Amount Tendered." A reissued
certificate representing the balance of nontendered Original Notes will be sent
to such tendering Holder, unless otherwise provided in the appropriate box on
this Letter, promptly after the Expiration Date. ALL OF THE ORIGINAL NOTES
DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS
OTHERWISE INDICATED.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the registered Holder of the Original Notes
tendered hereby, the signature must correspond exactly with the name as written
on the face of the certificates without any change whatsoever.
If any tendered Original Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter.
If any tendered Original Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter as there are different registrations of certificates.
When this Letter is signed by the registered Holder or Holders of the
Original Notes specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the Exchange
Notes are to be issued, or any untendered Original Notes are to be reissued, to
a person other than the registered Holder, then endorsements of any certificates
transmitted hereby or separate bond powers are required. Signatures on such
certificate(s) must be guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered Holder or
Holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered Holder or Holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted.
Endorsements on certificates for Original Notes or signatures on bond
powers required by this Instruction 3 must be guaranteed by a firm that is a
financial institution (including most banks, savings and loan associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchanges Medallion Program (each an "Eligible Institution").
Signatures on this Letter need not be guaranteed by an Eligible
Institution, provided the Original Notes are tendered: (i) by a registered
Holder of Original Notes (which term, for purposes of the Exchange Offer,
includes any participant in the Book-Entry Transfer Facility system whose name
appears on a security position listing as the Holder of such Original Notes) who
has not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on this Letter, or (ii) for the account of an Eligible
Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering Holders of Original Notes should indicate in the applicable box
the name and address to which Exchange Notes issued pursuant to the Exchange
Offer and or substitute certificates evidencing Original Notes not exchanged are
to be issued or sent, if different from the name or address of the person
signing this Letter. In the case of issuance in a different name, the employer
identification or social
10
<PAGE> 11
security number of the person named must also be indicated. Noteholders
tendering Original Notes by book-entry transfer may request that Original Notes
not exchanged be credited to such account maintained at the Book-Entry Transfer
Facility as such Holder may designate hereon. If no such instructions are given,
such Original Notes not exchanged will be returned to the name and address of
the person signing this Letter.
5. TAXPAYER IDENTIFICATION NUMBER.
Federal income tax law generally requires that a tendering Holder whose
Original Notes are accepted for exchange must provide the Company (as payor)
with such Holder's correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9 below, which in the case of a tendering Holder who is an individual, is
his or her social security number. If the Company is not provided with the
current TIN or an adequate basis for an exemption from backup withholding, such
tendering Holder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, the Exchange Agent may be required to withhold 31% of the
amount of any reportable payments made after the exchange to such tendering
Holder of Exchange Notes. If withholding results in an overpayment of taxes, a
refund may be obtained.
Exempt Holders of Original Notes (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding and
reporting requirements. See the enclosed Guidelines of Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for
additional instructions.
To prevent backup withholding, each tendering Holder of Original Notes must
provide its correct TIN by completing the Substitute Form W-9 set forth below,
certifying, under penalties of perjury, that the TIN provided is correct (or
that such Holder is awaiting a TIN) and that (i) the Holder is exempt from
backup withholding, or (ii) the Holder has not been notified by the Internal
Revenue Service that such Holder is subject to backup withholding as a result of
a failure to report all interest or dividends or (iii) the Internal Revenue
Service has notified the Holder that such Holder is no longer subject to backup
withholding. If the tendering Holder of Original Notes is a nonresident alien or
foreign entity not subject to backup withholding, such Holder must give the
Exchange Agent a completed Form W-8, Certificate of Foreign Status. These forms
may be obtained from the Exchange Agent. If the Original Notes are in more than
one name or are not in the name of the actual owner, such Holder should consult
the W-9 Guidelines for information on which TIN to report. If such Holder does
not have a TIN, such Holder should consult the W-9 Guidelines for instructions
on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and
write "applied for" in lieu of its TIN. Note: Checking this box and writing
"applied for" on the form means that such Holder has already applied for a TIN
or that such Holder intends to apply for one in the near future. If the box in
Part 2 of the Substitute Form W-9 is checked, the Exchange Agent will retain 31%
of reportable payments made to a Holder during the sixty (60) day period
following the date of the Substitute Form W-9. If the Holder furnishes the
Exchange Agent with his or her TIN within sixty (60) days of the Substitute Form
W-9, the Exchange Agent will remit such amounts retained during such sixty (60)
day period to such Holder and no further amounts will be retained or withheld
from payments made to the Holder thereafter. If, however, such Holder does not
provide its TIN to the Exchange Agent within such sixty (60) day period, the
Exchange Agent will remit such previously withheld amounts to the Internal
Revenue Service as backup withholding and will withhold 31% of all reportable
payments to the Holder thereafter until such Holder furnishes its TIN to the
Exchange Agent.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Original Notes to it or its order pursuant to the Exchange Offer. If,
however, Exchange Notes and/or substitute Original Notes not exchanged are to be
delivered to, or are to be registered or issued in the name of, any person other
than the registered Holder of the Original Notes tendered hereby, or if tendered
Original Notes are registered in the name of any person other than the person
signing this Letter, or if a transfer tax is imposed for any reason other than
the transfer of Original Notes to the Company or its order pursuant to the
Exchange
11
<PAGE> 12
Offer, the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly to
such tendering Holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE ORIGINAL NOTES SPECIFIED IN THIS
LETTER.
7. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders of Original Notes, by execution of this Letter,
shall waive any right to receive notice of the acceptance of their Original
Notes for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of
Original Notes nor shall any of them incur any liability for failure to give any
such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED ORIGINAL NOTES.
Any Holder whose Original Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. WITHDRAWAL RIGHTS.
Tenders of Original Notes may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on the Expiration Date.
For a withdrawal of a tender of Original Notes to be effective, a written
notice of withdrawal must be received by the Exchange Agent at the address set
forth above prior to 5:00 p.m., New York City time, on the Expiration Date. Any
such notice of withdrawal must (i) specify the name of the person having
tendered the Original Notes to be withdrawn (the "Depositor"), (ii) identify the
Original Notes to be withdrawn (including certificate number or numbers and the
principal amount of such Original Notes), (iii) contain a statement that such
Holder is withdrawing his election to have such Original Notes exchanged, (iv)
be signed by the Holder in the same manner as the original signature on the
Letter by which such Original Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer to have the
Trustee with respect to the Original Notes register the transfer of such
Original Notes in the name of the person withdrawing the tender and (v) specify
the name in which such Original Notes are registered, if different from that of
the Depositor. If Original Notes have been tendered pursuant to the procedure
for book-entry transfer set forth in "The Exchange Offer -- Book-Entry
Transfers" section of the Prospectus, any notice of withdrawal must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Original Notes and otherwise comply with the
procedures of such facility. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Original Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer and no Exchange Notes will be issued
with respect thereto unless the Original Notes so withdrawn are validly
retendered. Any Original Notes that have been tendered for exchange but which
are not exchanged for any reason will be returned to the Holder thereof without
cost to such Holder (or, in the case of Original Notes tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry transfer procedures set forth in "The Exchange
Offer -- Book-Entry Transfers" section of
12
<PAGE> 13
the Prospectus, such Original Notes will be credited to an account maintained
with the Book-Entry Transfer Facility for the Original Notes) as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Original Notes may be retendered by following the
procedures described above at any time on or prior to 5:00 p.m., New York City
time, on the Expiration Date.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, and requests for Notices of
Guaranteed Delivery and other related documents may be directed to the Exchange
Agent, at the address and telephone number indicated above.
13
<PAGE> 14
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: STATE STREET BANK AND TRUST COMPANY
<TABLE>
<S> <C> <C>
--------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN TIN: ---------------------------------
THE BOX AT RIGHT AND CERTIFY BY Social Security Number
FORM W-9 SIGNING AND DATING BELOW. or
------------------------------------- --------------------------------------
PART 2 -- TIN Applied For [ ] Employer Identification Number
-------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
INTERNAL REVENUE SERVICE
(1) the number shown on this form is my correct TIN (or I am waiting for a
PAYOR'S REQUEST FOR TAXPAYER number to be issued to me),
IDENTIFICATION NUMBER ("TIN")
AND CERTIFICATION (2) I am not subject to backup withholding either because: (a) I am exempt
from backup withholding, or (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding and
(3) any other information provided on this form is true and correct
SIGNATURE -------------------------------------- DATE----------------
--------------------------------------------------------------------------------------------------------------------
You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to
backup withholding because of underreporting of interest or dividends on your tax return and you have not been
notified by the IRS that you are no longer subject to backup withholding.
--------------------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of the exchange, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
Signature ------------------------------ Date -------------------------
14
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
UST INC.
This form or one substantially equivalent hereto must be used to accept the
exchange offer of UST Inc. (the "Company") made pursuant to the Prospectus,
dated , 1999 (the "Prospectus"), if certificates for the outstanding
7.25% Senior Notes due 2009 and the outstanding Floating Rate Senior Notes due
2009 of the Company (collectively, the "Original Notes") are not immediately
available or if the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach State
Street Bank and Trust Company, as exchange agent (the "Exchange Agent") prior to
5:00 p.m., New York City time, on , 1999, the expiration date of the
exchange offer (the "Expiration Date"). Such form may be delivered or
transmitted by facsimile transmission, mail or hand delivery to the Exchange
Agent as set forth below. In addition, in order to utilize the guaranteed
delivery procedure to tender Original Notes pursuant to the Exchange Offer, a
completed, signed and dated Letter of Transmittal (or facsimile thereof) must
also be received by the Exchange Agent prior to 5:00 p.m., New York City time,
on the Expiration Date.
Delivery to:
STATE STREET BANK AND TRUST COMPANY, Exchange Agent
<TABLE>
<S> <C>
By Registered or Certified Mail: By Hand or Overnight Delivery:
State Street Bank and Trust Company State Street Bank and Trust Company
P.O. Box 778 Two Avenue de Lafayette
Boston, MA 02102-0778 Boston, MA 02111-1724
Attention: Ralph Jones, LCC5 Attention: Ralph Jones, LCC5
</TABLE>
For Information Call:
(617) 662-1548
By Facsimile Transmission
(For Eligible Institutions Only):
(617) 662-1452
Confirm by Telephone:
(617) 662-1548
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Original Notes set forth below pursuant to the
guaranteed delivery procedures described in "The Exchange Offer -- Guaranteed
Delivery Procedures" section of the Prospectus.
PRINCIPAL AMOUNT OF 7.25% SENIOR NOTES TENDERED:*
<TABLE>
<S> <C>
$
----------------------------------------------------
Certificate Nos. (if available): If 7.25% Senior Notes will be delivered by book-
entry transfer to The Depository Trust Company,
provide account number.
- -----------------------------------------------------
Total Principal Amount Represented by Original Notes
Certificate(s):
$ Account Number ----------------------------------
----------------------------------------------------
</TABLE>
PRINCIPAL AMOUNT OF FLOATING RATE SENIOR NOTES TENDERED:*
<TABLE>
<S> <C>
$
----------------------------------------------------
Certificate Nos. (if available): If Floating Rate Senior Notes will be delivered by
book-entry transfer to The Depository Trust Company,
provide account number.
- -----------------------------------------------------
Total Principal Amount Represented by Original Notes
Certificate(s):
$ Account Number ----------------------------------
----------------------------------------------------
</TABLE>
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE DEATH
OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
- ---------------
* Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
2
<PAGE> 3
PLEASE SIGN HERE
<TABLE>
<S> <C>
X ---------------------------
- ------------------------------------------------------------
X ---------------------------
- ------------------------------------------------------------
Signature(s) of Owner(s) or Authorized Signatory Date
</TABLE>
Area Code and Telephone Number:
- ---------------------------------------------------------------------
Must be signed by the holder(s) of Original Notes as their name(s)
appear(s) on certificates for Original Notes or on a security position listing,
or by person(s) authorized to become registered holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
set forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
<TABLE>
<S> <C>
Name(s): ------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
Capacity: ------------------------------------------------------------
Address(es): ------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the certificates representing the principal amount of Original Notes
tendered hereby in proper form for transfer, or timely confirmation of the
book-entry transfer of such Original Notes into the Exchange Agent's account at
The Depository Trust Company pursuant to the procedures set forth in "The
Exchange Offer -- Guaranteed Delivery Procedures" section of the Prospectus,
together with any required signature guarantee and any other documents required
by the Letter of Transmittal, will be received by the Exchange Agent at the
address set forth above, no later than three New York Stock Exchange trading
days after the Expiration Date.
<TABLE>
<S> <C>
--------------------------------------------------- ---------------------------------------------------
Name of Firm Authorized Signature
--------------------------------------------------- ---------------------------------------------------
Address Title
--------------------------------------------------- Name: -------------------------------------------
Zip Code (Please Type or Print)
Area Code and Tel. No. ------------------------ Dated: -------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR ORIGINAL NOTES WITH THIS FORM. CERTIFICATES
FOR ORIGINAL NOTES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY
EXECUTED LETTER OF TRANSMITTAL.
4
<PAGE> 1
EXHIBIT 99.3
UST INC.
OFFER FOR ALL OUTSTANDING
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
IN EXCHANGE FOR
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
To: Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
UST Inc. (the "Company") is offering, upon and subject to the terms and
conditions set forth in the Prospectus, dated , 1999 (the
"Prospectus"), and the enclosed Letter of Transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") its 7.25% Senior Notes due
2009 and Floating Rate Senior Notes due 2009, which have been registered under
the Securities Act of 1933, as amended, for its outstanding 7.25% Senior Notes
due 2009 and Floating Rate Senior Notes due 2009 (the "Original Notes"). The
Exchange Offer is being made in order to satisfy certain obligations of the
Company contained in the Exchange and Registration Rights Agreement dated May
27, 1999, by and among the Company and the initial purchasers referred to
therein.
We are requesting that you contact your clients for whom you hold Original
Notes regarding the Exchange Offer. For your information and for forwarding to
your clients for whom you hold Original Notes registered in your name or in the
name of your nominee, or who hold Original Notes registered in their own names,
we are enclosing the following documents:
1. Prospectus dated , 1999;
2. The Letter of Transmittal for your use and for the information of
your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offer if certificates for Original Notes are not immediately available or
time will not permit all required documents to reach the Exchange Agent
prior to the Expiration Date (as defined below) or if the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
account you hold Original Notes registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to State Street Bank and Trust Company,
the Exchange Agent for the Exchange Offer.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON , 1999, UNLESS EXTENDED BY THE COMPANY
(THE "EXPIRATION DATE"). ORIGINAL NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER
MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
<PAGE> 2
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Exchange Agent and certificates representing the Original Notes should be
delivered to the Exchange Agent, all in accordance with the instructions set
forth in the Letter of Transmittal and the Prospectus.
If a registered holder of Original Notes desires to tender, but such
Original Notes are not immediately available, or time will not permit such
holder's Original Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under the caption
"The Exchange Offer -- Guaranteed Delivery Procedures."
The Company will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding the Prospectus and the related documents to the
beneficial owners of Original Notes held by them as nominee or in a fiduciary
capacity. The Company will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Original Notes pursuant to the Exchange Offer,
except as set forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to State
Street Bank and Trust Company, the Exchange Agent for the Exchange Offer, at its
address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
UST INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
ENCLOSURES
2
<PAGE> 1
EXHIBIT 99.4
UST INC.
OFFER FOR ALL OUTSTANDING
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009
IN EXCHANGE FOR
7.25% SENIOR NOTES DUE JUNE 1, 2009
AND
FLOATING RATE SENIOR NOTES DUE JUNE 1, 2009,
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
To Our Clients:
Enclosed for your consideration is a Prospectus, dated , 1999
(the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of UST Inc. (the
"Company") to exchange its 7.25% Senior Notes due 2009 and Floating Rate Senior
Notes due 2009, which have been registered under the Securities Act of 1933, as
amended (the "Exchange Notes"), for its outstanding 7.25% Senior Notes due 2009
and Floating Rate Senior Notes due 2009 (the "Original Notes"), upon the terms
and subject to the conditions described in the Prospectus and the Letter of
Transmittal. The Exchange Offer is being made in order to satisfy certain
obligations of the Company contained in an Exchange and Registration Rights
Agreement dated May 27, 1999, by and among the Company and the initial
purchasers referred to therein.
This material is being forwarded to you as the beneficial owner of the
Original Notes held by us for your account but not registered in your name. A
TENDER OF SUCH ORIGINAL NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Original Notes held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Original Notes on your behalf in accordance
with the provisions of the Exchange Offer. The Exchange Offer will expire at
5:00 p.m., New York City time, on , 1999 (the "Expiration Date"),
unless extended by the Company. Any Original Notes tendered pursuant to the
Exchange Offer may be withdrawn at any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Original Notes.
2. The Exchange Offer is subject to certain conditions set forth in
the Prospectus in the section captioned "The Exchange Offer -- Certain
Conditions to the Exchange Offer."
3. Any transfer taxes incident to the transfer of Original Notes from
the holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City time, on
, 1999, unless extended by the Company.
<PAGE> 2
If you wish to have us tender your Original Notes, please so instruct us by
completing, executing and returning to us the instruction form on the back of
this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY
AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER ORIGINAL NOTES.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by UST Inc.
with respect to its Original Notes.
This will instruct you to tender the Original Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.
[ ] Please tender the Original Notes held by you for my account as indicated
below:
7.25% Senior Notes due 2009: $-------- (aggregate principal amount of 7.25%
Senior Notes)
Floating Rate Senior Notes due 2009: $-------- (aggregate principal amount
of Floating Rate Senior Notes)
[ ] Please do not tender any Original Notes held by you for my account.
Dated:
- ------------------------------------, 1999
Signature(s):
- --------------------------------------------------------------------------------
Print Name(s) here:
- --------------------------------------------------------------------------------
(Print Address(es)):
- --------------------------------------------------------------------------------
(Area Code and Telephone Number(s)):
- ---------------------------------------------------------------
(Tax Identification or Social Security Number(s)): -----------------
None of the Original Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Original Notes held by
us for your account.
3
