EXHIBIT 1.1
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PURCHASE AGREEMENT
Dated April 30, 2002
among
COORS BREWING COMPANY
(Fully and Unconditionally Guaranteed by Adolph Coors Company and certain
subsidiaries of Adolph Coors Company)
and
MORGAN STANLEY & CO. INCORPORATED
and
J.P. MORGAN SECURITIES INC.
COORS BREWING COMPANY
$850,000,000 6-3/8% Senior Notes due 2012
Purchase Agreement
Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Ladies and Gentlemen:
Coors Brewing Company, a Colorado corporation (the "ISSUER"),
proposes to issue and sell to the several purchasers named in Schedule I hereto
(the "INITIAL PURCHASERS") $850,000,000 principal amount of its 6-3/8% Senior
Notes due 2012 (the "SECURITIES") to be guaranteed on a senior unsecured basis
by Adolph Coors Company, a Colorado corporation (the "PARENT") and by each of
the Issuer's subsidiaries listed on Schedule II hereto and such other
subsidiaries as may be required from time to time pursuant to the Indenture
(collectively, the "SUBSIDIARY GUARANTORS" and, with the Parent, the
"GUARANTORS"). The Securities are to be issued pursuant to the provisions of an
indenture dated as of May 7, 2002 (as supplemented by the First Supplemental
Indenture dated as of May 7, 2002, the "INDENTURE") among the Issuer, the
Guarantors and Deutsche Bank Trust Americas, as trustee (the "TRUSTEE").
The Securities will be offered without being registered under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act, in offshore transactions in reliance on
Regulation S under the Securities Act ("REGULATION S") and to institutional
accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that deliver a letter in the form annexed to the Final
Memorandum (as defined below).
The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of a Registration Rights Agreement
dated the date hereof between the Issuer, the Guarantors and the Initial
Purchasers (the "REGISTRATION RIGHTS AGREEMENT").
In connection with the sale of the Securities, the Issuer and
the Parent have prepared a preliminary offering memorandum (the "PRELIMINARY
MEMORANDUM") and will prepare a final offering memorandum (the "FINAL
MEMORANDUM" and, with the Preliminary Memorandum, each a "MEMORANDUM") including
or incorporating by reference a description of the terms of the Securities, the
terms of the offering and a description of the Parent. As used herein, the term
"Memorandum" shall include in each case the documents incorporated by reference
therein. The terms "SUPPLEMENT", "AMENDMENT" and "AMEND" as used herein with
respect to a Memorandum shall include all documents incorporated or deemed
incorporated by reference in the Preliminary Memorandum or Final Memorandum that
are filed subsequent to the date of such Memorandum but on or prior to the date
that is the later of the Closing Date (as
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defined in Section 4) and the date on which all of the Securities shall have
been sold by the Initial Purchasers with the Securities and Exchange Commission
(the "COMMISSION") pursuant to the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT").
1. Representations and Warranties. Each of the Issuer and the
Guarantors represents and warrants, and agrees with you that
(a) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated or deemed to be incorporated by reference in
either Memorandum complied or will comply, as the case may be, when so filed in
all material respects with the Exchange Act and the applicable rules and
regulations thereunder.
(b) The Preliminary Memorandum, as of its date and as of the
date of any supplement or amendment thereto, does not contain and the Final
Memorandum, in the form used by the Initial Purchasers to confirm sales, as of
its date and as of the date of any supplement or amendment thereto and on the
Closing Date, will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply to
statements or omissions in either Memorandum based upon information relating to
any Initial Purchasers and their expected actions in connection with the
offering contemplated by the Memorandum that is furnished to the Issuer in
writing by such Initial Purchasers through you expressly for use therein.
(c) Each of the Issuer and the Parent has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Issuer, the Parent and their subsidiaries (a "MATERIAL
ADVERSE EFFECT"), taken as a whole.
(c) Each Subsidiary Guarantor has been duly organized, is
validly existing and in good standing to (to the extent such concept is
applicable) under the laws of the jurisdiction of its organization, has all
requisite power and authority to own its property and to conduct its business as
described in each Memorandum and is duly qualified to transact business and is
in good standing (to the extent such concept is applicable) in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect on the
Parent and its subsidiaries, taken as a whole; with respect to each of the
Subsidiary Guarantors that is a corporation, all of the issued shares of capital
stock of each such Subsidiary Guarantor have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned directly by the
Issuer, free and clear of all liens, encumbrances, equities or claims and with
respect to each of the Subsidiary Guarantors that is a limited liability
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partnership, all partnership interests are owned directly or indirectly by the
Issuer, free and clear of all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Issuer and the Guarantors.
(f) The Securities have been duly authorized by the Issuer and
the Guarantors and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will be valid and
binding obligations of the Issuer and the Guarantors, enforceable in accordance
with their terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors= rights generally and general principles of equity, and will
be entitled to the benefits of the Indenture and the Registration Rights
Agreement.
(g) The Indenture has been guaranteed by the Guarantors and
duly authorized and, when executed and delivered by the Issuer and the
Guarantors, will be a valid and binding agreement of the Issuer and the
Guarantors, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors= rights generally and
general principles of equity.
(h) The Registration Rights Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Issuer and the Guarantors, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency or similar laws affecting creditors= rights
generally and general principles of equity and except as rights to
indemnification and contribution under the Registration Rights Agreement that
may be limited under applicable law.
(i) The execution and delivery by the Issuer and the
Guarantors of, and the performance by the Issuer and the Guarantors of its
obligations under, this Agreement, the Indenture, the Registration Rights
Agreement and the Securities will not contravene any agreement or other
instrument binding upon the Issuer or the Guarantors or any of their
subsidiaries that is material to the Issuer or the Guarantors and their
subsidiaries, taken as a whole, or any provision of applicable law or the
certificate of incorporation or by-laws of the Issuer and the Guarantors, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Issuer, the Guarantors or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Issuer and the Guarantors
of their obligations under this Agreement, the Indenture, the Registration
Rights Agreement or the Securities, except (x) such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities and (y) by Federal and state securities laws with
respect to the Issuer's and the Guarantors' obligations under the Registration
Rights Agreement.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Issuer, the Guarantors and their subsidiaries, taken as
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a whole, from that set forth in the Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or,
to the knowledge of the Issuer and the Guarantors, threatened to which the
Issuer, the Guarantors or any of their subsidiaries is a party or to which any
of the properties of the Issuer, the Guarantors or any of their subsidiaries is
subject other than proceedings accurately described in all material respects in
each Memorandum and proceedings that would not have a Material Adverse Effect on
the power or ability of the Issuer and the Guarantors to perform their
obligations under this Agreement, the Indenture, the Registration Rights
Agreement or the Securities or to consummate the transactions contemplated by
the Memorandum.
(l) The Issuer, the Guarantors and their subsidiaries (i) are
in compliance with all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a Material
Adverse Effect.
(m) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a Material Adverse Effect.
(n) The Issuer and the Guarantors are not, and after giving
effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Memorandum, will not be, required to
register as an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended; and the Securities satisfy the requirements set
forth in Rule 144A(d)(3) under the Securities Act.
(o) Neither the Issuer, the Guarantors nor any affiliate (as
defined in Rule 501(b) of Regulation D under the Securities Act, an "Affiliate")
of the Issuer or the Guarantors have directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or will be integrated
with the sale of the Securities in a manner that would require the registration
under the Securities Act of the Securities or (ii) engaged in any form of
general solicitation or general advertising in connection with the offering of
the Securities (as those terms are used in Regulation D under the Securities
Act), or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
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(p) Neither the Issuer, the Guarantors, nor their Affiliates
or any person acting on their behalf has engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to the
Securities and the Issuer, the Guarantors and their Affiliates and any person
acting on their behalf have complied and will comply with the offering
restrictions requirement of Regulation S, except no representation, warranty or
agreement is made by the Issuer and the Guarantors in this paragraph with
respect to the Initial Purchasers.
(q) Assuming that the representations and warranties of the
Initial Purchasers in Section 7 are true, correct and complete and assuming
compliance by the Initial Purchasers with their covenants in Section 7, it is
not necessary in connection with the offer, sale and delivery of the Securities
to the Initial Purchasers in the manner contemplated by this Agreement to
register the Securities under the Securities Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended.
(r) The Issuer, the Guarantors and their subsidiaries have
good and marketable title in fee simple to all real property located in Golden,
Colorado, the Shenandoah Valley in Virginia and Memphis, Tennessee owned by
them, and good marketable title to all personal property owned by it, which is
material to the business of the Issuer and the Guarantors, in each case free and
clear of all liens, encumbrances and defects except such as are described in the
Memorandum or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Issuer, the Guarantors and their subsidiaries except where failure to have such
title would have a Material Adverse Effect, and any real property, sites and
buildings held under lease by the Issuer, the Guarantors or their subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as would not have a Material Adverse Effect, in each case except as
described in the Memorandum.
(s) The Parent and its subsidiaries have good and marketable
title in fee simple to all real property located in the United Kingdom in
Burton-on-Trent, Tadcaster, Cape Hill and Alton, owned by them, and good
marketable title to all personal property associated therewith owned by them,
which is material to the business of the Parent and its subsidiaries, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Memorandum or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Parent and its subsidiaries except where failure to have
such title would have a Material Adverse Effect, and any real property, sites
and buildings held under lease by the Parent and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as
would not have a Material Adverse Effect, in each case except as described in
the Memorandum.
(t) The Issuer, the Guarantors and their subsidiaries have
complied with all provisions of Section 517.075, Florida Statutes relating to
doing business with the Government of Cuba or with any person or affiliate
located in Cuba.
2. Agreements to Sell and Purchase. The Issuer hereby agrees
to sell to the several Initial Purchasers, and each Initial Purchaser, upon the
basis of the representations and
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warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from the Issuer the respective
principal amount of Securities set forth in Schedule I hereto opposite its name
at a purchase price of 98.946% of the principal amount thereof (the "PURCHASE
PRICE") plus accrued interest, if any, to the Closing Date.
The Issuer hereby agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated and J.P. Morgan Securities on
behalf of the Initial Purchasers, it will not, during the period ending 90 days
after the date of the Final Memorandum, offer, sell, contract to sell or
otherwise dispose of any debt of the Issuer, or warrants to purchase debt or
securities convertible or exchangeable into debt, of the Issuer substantially
similar to the Securities (other than the sale of the Securities under this
Agreement.)
3. Terms of Offering. You have advised the Issuer that the
Initial Purchasers will make an offering of the Securities purchased by the
Initial Purchasers hereunder on the terms to be set forth in this Agreement and
the Memorandum, as soon as practicable after this Agreement is entered into as
in your judgment is advisable.
4. Payment and Delivery. Payment for the Securities shall be
made to the Issuer in Federal or other funds immediately available in New York
City against delivery of such Securities for the respective accounts of the
several Initial Purchasers at 10:00 a.m., New York City time, on May 7, 2002, or
at such other date and time as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "Closing Date."
Certificates for the Securities shall be in definitive form or
global form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the respective accounts of the
several Initial Purchasers, with any transfer taxes payable in connection with
the transfer of the Securities to the Initial Purchasers duly paid, against
payment of the Purchase Price therefor.
5. Conditions to the Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Securities on
the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to (and including) the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the Parent's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business
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or operations of the Issuer, the Guarantors and their subsidiaries,
taken as a whole, from that set forth in the Memorandum (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Securities on the terms and in
the manner contemplated in the Memorandum.
(b) The Initial Purchasers shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive officer of
the Parent, to the effect set forth in Section 5(a)(i) and to the effect that
the representations and warranties of the Issuer and the Guarantors contained in
this Agreement are true and correct as of the Closing Date and that each of the
Issuer and the Guarantors has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Initial Purchasers shall have received on the Closing
Date an opinion of Kirkland & Ellis, outside counsel for the Issuer and the
Guarantors, dated the Closing Date substantially in the form of Exhibit A
hereto.
(d) The Initial Purchasers shall have received on the Closing
Date an opinion of Annita Menogan, Esq., Assistant General Counsel to the
Issuer, dated the Closing Date substantially in the form of Exhibit B hereto.
(e) The Initial Purchasers shall have received on the Closing
Date an opinion of Cravath, Swaine & Moore, counsel for the Initial Purchasers,
dated the Closing Date, covering the matters referred to in Sections 3 and 6 of
Exhibit A and such other matters as the Initial Purchasers may reasonably
require.
The opinions of Kirkland & Ellis and Annita Menogan, Esq.
described in Section 5(c) and 5(d) above shall be rendered to the Initial
Purchasers at the request of the Parent and shall so state therein.
(f) The Initial Purchasers shall have received on each of the
date hereof and the Closing Date letters, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the Initial
Purchasers, from PricewaterhouseCoopers LLP, independent public accountants to
the Issuer and the Guarantors, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements, pro forma financial statements and certain
financial information contained in, and incorporated by reference into, the
Final Memorandum; provided, however, that the letter delivered on the Closing
Date shall use a "cut-off date" not earlier than the date hereof.
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(g) The Initial Purchasers shall have received on each of the
date hereof and the Closing Date letters, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the Initial
Purchasers, from KPMG, independent public accountants to the Issuer and the
Guarantors, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
certain pro forma and other financial information contained in, and incorporated
by reference into, the Final Memorandum; provided, however, that the letter
delivered on the Closing Date shall use a "cutoff date" not earlier than the
date hereof.
(h) The Initial Purchasers shall have received such other
documents and certificates as are reasonably requested by you or your counsel.
6. Covenants of the Issuer and the Guarantors. In further
consideration of the agreements of the Initial Purchasers contained in this
Agreement, each of the Issuer and the Guarantors covenants with each Initial
Purchaser as follows:
(a) To furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 6(c), as many copies
of the Final Memorandum, any documents incorporated by reference therein and any
supplements and amendments thereto as you may reasonably request.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement and not to
use any such proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to
the date on which all of the Securities shall have been sold by the Initial
Purchasers, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Memorandum in order to make the
statements therein, in the light of the circumstances when the Final Memorandum
is delivered to a purchaser, not misleading, or if, in the opinion of counsel
for the Initial Purchasers, it is necessary to amend or supplement the Final
Memorandum to comply with applicable law, forthwith to prepare and furnish, at
its own expense, to the Initial Purchasers, either amendments or supplements to
the Final Memorandum so that the statements in the Final Memorandum as so
amended or supplemented will not, in the light of the circumstances when the
Final Memorandum is delivered to a purchaser, be misleading or so that the Final
Memorandum, as amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Issuer's and the
Guarantors= security holders and to you as soon as practicable an earnings
statement of the Parent and its subsidiaries that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
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(f) Not to, nor to permit any affiliate (as defined in Rule
501 of Regulation D under the Securities Act, an "AFFILIATE") controlled by them
to, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would require the
registration under the Securities Act of the Securities.
(g) Not to, not to permit any Affiliate controlled by them to,
solicit any offer to buy or offer or sell the Securities by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(h) While any of the Securities remain "restricted securities"
within the meaning of the Securities Act, to make available, upon request, to
any seller of the Securities the information specified in Rule 144A(d)(4) under
the Securities Act, unless the Issuer is then subject to Section 13 or 15(d) of
the Exchange Act.
(i) Not to, nor to permit their Affiliates controlled by them
nor any person acting on their behalf (other than the Initial Purchasers) to,
engage in any directed selling efforts (as that term is defined in Regulation S)
with respect to the Securities, and the Issuer, the Guarantors and their
Affiliates and each person acting on their behalf (other than the Initial
Purchasers) will comply with the offering restrictions requirement of Regulation
S.
(j) During the period of two years after the Closing Date, not
to, and not to permit any of their 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.
7. Offering of Securities; Restrictions on Transfer. (a) Each
Initial Purchaser, severally and not jointly, represents and warrants to the
Issuer and the Guarantors that such Initial Purchaser is a qualified
institutional buyer as defined in Rule 144A under the Securities Act (a "QIB").
Each Initial Purchaser, severally and not jointly, agrees with the Issuer that
(i) it will not solicit offers for, or offer or sell, the Securities by any form
of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act and (ii) it
will solicit offers for the Securities only from, and will offer the Securities
only to, persons that it reasonably believes to be (A) in the case of offers
inside the United States, (1) QIBs or (2) other institutional accredited
investors as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act
("INSTITUTIONAL ACCREDITED INVESTORS") that, prior to their purchase of the
Securities, deliver to such Initial Purchaser a letter containing the
representations and agreements set forth in Appendix A to the Final Memorandum
and (B) in the case of offers outside the United States, to persons other than
U.S. persons ("FOREIGN PURCHASERS," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)) in reliance upon
Regulation S under the Securities Act that, in each case, in purchasing such
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Securities are deemed to have represented and agreed as provided in the Final
Memorandum under the caption "Transfer Restrictions."
(b) Each Initial Purchaser, severally and not jointly, represents and warrants
to, and agrees with, with respect to offers and sales outside the United States,
the Issuer and the Guarantors that:
(i) such Initial Purchaser understands that no action has
been or will be taken in any jurisdiction by the Issuer or the Parent
that would permit a public offering of the Securities, or possession or
distribution of either Memorandum or any other offering or publicity
material relating to the Securities, in any country or jurisdiction
where action for that purpose is required;
(ii) such Initial Purchaser will comply with all
applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Securities or has in its possession
or distributes either Memorandum or any such other material, in all
cases at its own expense;
(iii) the Securities have not been registered under the
Securities 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 Rule 144A or Regulation S under the Securities Act or
pursuant to another exemption from the registration requirements of the
Securities Act;
(iv) such Initial Purchaser has offered the Securities and
will offer and sell the Securities (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance
with Rule 903 of Regulation S or as otherwise permitted in Section
7(a); accordingly, neither such Initial Purchaser, its Affiliates nor
any persons acting on its or their behalf have engaged or will engage
in any directed selling efforts (within the meaning of Regulation S)
with respect to the Securities, and any such Initial Purchaser, its
Affiliates and any such persons have complied and will comply with the
offering restrictions requirement of Regulation S;
(v) such Initial Purchaser has (A) not offered or sold
and, prior to the date six months after the Closing Date, 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 (as amended); (B) only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the
meaning of Section 21 of the Financial Services and Markets Act of 2000
(the "FSMA")) received by it in connection with the issue or sale of
any Securities in circumstances in which Section 21(1) of the FSMA does
not apply to the Issuer or the Guarantors; and (C) complied and will
comply
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with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and
(vi) such Initial Purchaser agrees that, at or prior to
confirmation of sales of the Securities, such Initial Purchaser 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 final 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."
8. Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, each of the
Issuer and the Guarantors agrees to pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including:
(i) the fees, disbursements and expenses of counsel and accountants to the
Issuer and the Guarantors in connection with the issuance and sale of the
Securities and all other fees or expenses in connection with the preparation of
each Memorandum and all amendments and supplements thereto, including all
printing costs associated therewith, and the mailing and delivering of copies
thereof to the Initial Purchasers, in the quantities herein above specified,
(ii) all costs and expenses related to the transfer and delivery of the
Securities to the Initial Purchasers, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the Securities
under state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities laws
as provided in Section 6(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Initial Purchasers in connection with
such qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Securities, (v) the costs and charges of the Trustee and any transfer agent,
registrar or depositary, and (vi) all other costs and expenses incident to the
performance of the obligations of the Issuer and the Guarantors hereunder for
which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 9 entitled "Indemnity
and Contribution," and the last paragraph of Section 11 below, the Initial
Purchasers will pay all costs of the preparation, issuance and delivery of the
Securities and expenses, including fees and disbursements of their counsel. Each
of the Issuer and the Guarantors agrees to pay the costs and expenses of the
Issuer and the Guarantors relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Securities,
including, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior written approval of the Parent, travel
and lodging expenses of the representatives and
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officers of the Parent and any such consultants, and the proportionate share of
the cost of any aircraft chartered in connection with the road show.
9. Indemnity and Contribution. (a) The Issuer and the
Guarantors agree to indemnify and hold harmless each Initial Purchaser and each
person, if any, who controls any Initial Purchaser within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in either
Memorandum (as amended or supplemented if the Issuer or the Parent shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Initial Purchaser and its expected actions in
connection with the offering contemplated by the Memorandum that is furnished to
the Issuer or Parent in writing by such Initial Purchaser through you expressly
for use therein.
(b) Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Issuer and the Guarantors, the officers of
the Parent who sign the Registration Statement and each person, if any, who
controls the Issuer and the Guarantors within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in either Memorandum (as
amended or supplemented if the Issuer or the Parent shall have furnished any
amendments or supplements thereto in accordance with the provisions of Section
6(b)), or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only with reference to information relating to such Initial
Purchaser and its expected actions in connection with the offering contemplated
by the Memorandum that is furnished to the Issuer or Parent in writing by such
Initial Purchaser through you expressly for use in either Memorandum or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a) or 9(b), such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding
13
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Morgan Stanley &
Co. Incorporated, in the case of parties indemnified pursuant to Section 9(a),
and by the Issuer and the Guarantors, in the case of parties indemnified
pursuant to Section 9(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section
9(a) or 9(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 9(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 9(d)(i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuer and Guarantors on the one hand and the Initial Purchasers
on the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Issuer
and Guarantors and the total discounts and commissions received by the Initial
Purchasers in respect thereof, bear to the aggregate offering price of the
Securities. The relative fault of the Issuer and Guarantors on the one hand and
of the Initial Purchasers on the other hand shall be
14
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 Issuer and Guarantors or
by the Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Initial Purchasers' respective obligations to contribute pursuant to this
Section 9 are several in proportion to the respective principal amount of
Securities they have purchased hereunder, and not joint.
(e) The Issuer, the Guarantors and the Initial Purchasers
agree that it would not be just or equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in Section 9(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in Section
9(d) shall be deemed to include, subject to the limitations set forth above, 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 Section 9, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities resold by it in the initial placement of such
Securities were offered to investors exceeds the amount of any damages that such
Initial Purchaser 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 remedies provided for in this
Section 9 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements of the
Issuer and the Guarantors contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Initial Purchaser or any
person controlling any Initial Purchaser or by or on behalf of the Issuer and
the Guarantors, its officers or directors or any person controlling the Issuer
and the Guarantors and (iii) acceptance of and payment for any of the
Securities.
10. Termination. This Agreement shall be subject to
termination by notice given by you to the Issuer and the Guarantors, if (a)
after the execution and delivery of this Agreement and prior to the Closing Date
(i) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Parent shall have been suspended
on any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the
15
events specified in clauses 10(a)(i) through 10(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Securities on the
terms and in the manner contemplated in the Final Memorandum.
11. Effectiveness; Defaulting Initial Purchasers. This
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
If, on the Closing Date, any one of the Initial Purchasers
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, the other Initial
Purchasers shall be obligated severally in the proportions that the principal
amount of Securities set forth opposite their respective names in Schedule I
bears to the aggregate principal amount of Securities set forth opposite the
names of all such nondefaulting Initial Purchasers, or in such other proportions
as you may specify, to purchase the Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Securities that
any Initial Purchaser has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date, any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of Securities
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to you and the Issuer for the purchase of such
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or of the Issuer and the Guarantors. In any such case either you or the Issuer
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Final
Memorandum or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of such Initial Purchaser under this
Agreement.
If this Agreement shall be terminated by the Initial
Purchasers, or any of them, because of any failure or refusal on the part of the
Issuer and the Guarantors to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Issuer and the Guarantors
shall be unable to perform its obligations under this Agreement, the Issuer and
the Guarantors will reimburse the Initial Purchasers or such Initial Purchasers
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Initial Purchasers in connection with this
Agreement or the offering contemplated hereunder.
12. Notices. All notices and other communications under this
Agreement shall be in writing and mailed, delivered or sent by facsimile
transmission to: if sent to the Initial
16
Purchasers, Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York
10036, attention: Michael Fusco, facsimile number 212-761-0783 and if sent to
the Issuer, to Coors Brewing Company, 311 Tenth Street, Golden, Colorado 80401
attention: Annita Menogan, corporate secretary, facsimile number (303) 277-2601.
13. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
15. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
17
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
COORS BREWING COMPANY
By: /s/ W. LEO KIELY III
--------------------------------------
Name: W. Leo Kiely III
Title: Chief Executive Officer
ADOLPH COORS COMPANY
By: /s/ W. LEO KIELY III
--------------------------------------
Name: W. Leo Kiely III
Title: Vice President
COORS DISTRIBUTING COMPANY
By: /s/ RON TRYGGESTAD
--------------------------------------
Name: Ron Tryggestad
Title: Assistant Treasurer
COORS INTERNATIONAL MARKET
DEVELOPMENT, L.L.L.P.
By: COORS CARIBE, INC.
Title: General Partner
By: /s/ ROBERT D. KLUGMAN
--------------------------------------
Name: Robert D. Klugman
Title: President
18
COORS WORLDWIDE, INC.
By: /s/ RONALD A. TRYGGESTAD
--------------------------------------
Name: Ronald A. Tryggestad
Title: Assistant Treasurer
COORS CARIBE, INC.
By: /s/ ROBERT D. KLUGMAN
--------------------------------------
Name: Robert D. Klugman
Title: President
19
Accepted as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
Acting severally on behalf of itself and
the several Initial Purchasers named in
Schedule I hereto
By: Morgan Stanley & Co. Incorporated
By: /s/ MIKE FUSCO
--------------------------------------
Name: Mike Fusco
Title: Executive Director
Accepted as of the date hereof
J.P. Morgan Securities Inc.
Acting severally on behalf of itself and
the several Initial Purchasers named in
Schedule I hereto
By: J.P. Morgan Securities Inc.
By: /s/ MARIA SRAMEK
--------------------------------------
Name: Maria Sramek
Title: Vice President
20