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EXHIBIT 10.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of September 30, 1999, is
made and entered into by and between BGLS Holding Inc., a Delaware corporation
("PURCHASER"), and BGLS Inc., a Delaware corporation ("Seller"). Capitalized
terms not otherwise defined herein have the meanings set forth in SECTION 4.01.
WHEREAS, the Purchaser is a direct wholly-owned subsidiary of
Brooke Group Ltd. (the "Holding Company"), which changed its name on the date
hereof from "BGL Successor Inc." to "Brooke Group Ltd." and is the successor of
Brooke Group Holding Inc. (the "Predecessor"), a Delaware corporation which
changed its name on the date hereof from "Brooke Group Ltd." to "Brooke Group
Holding Inc."; and
WHEREAS, immediately prior to the consummation of the
transactions contemplated by this Agreement, pursuant to Section 251(g) of the
Delaware General Corporation Law and the Agreement and Plan of Merger, dated as
of the date hereof, by and among the Predecessor, Holding Company and BGL Merger
Inc., a wholly-owned subsidiary of the Purchaser ("BGL MERGER"), BGL Merger
merged (the "MERGER") with and into the Predecessor, and Predecessor became a
direct wholly-owned subsidiary of the Purchaser; and
WHEREAS, promptly following the consummation of the
transactions contemplated by this Agreement, the Purchaser will change its name
from "BGLS Holding Inc." to "BGLS Inc." and the Seller will change its name from
"BGLS Inc." to "Old BGLS Inc."; and
WHEREAS, Seller, a direct wholly-owned subsidiary of
Predecessor, owns (i) ten (10) shares of common stock of Brooke (Overseas) Ltd.,
a Delaware corporation ("BOL"), (ii) one hundred (100) shares of common stock of
Old CPI, Inc., a Delaware corporation ("CPI"), and (iii) one hundred (100)
shares of common stock of New Valley Holdings, Inc., a Delaware corporation
("NVH") and, together with BOL and CPI, the "COMPANIES"), together constituting
all issued and outstanding shares of capital stock of the Companies (such shares
collectively being referred to herein as the "SHARES"); and
WHEREAS, pursuant to a Pledge and Security Agreement dated as
of January 1, 1996 (the "PLEDGE AGREEMENT") between the Seller and State Street
Bank and Trust Company, as successor to Fleet National Bank of Massachusetts, as
successor Trustee (the "TRUSTEE") under the Indenture dated as of January 1,
1996 (the "INDENTURE") between the Seller and the Trustee, the Seller has
pledged all of the Shares to the Trustee to secure the Debt Obligations (as
hereinafter defined); and
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WHEREAS, Seller desires to sell, and Purchaser desires to
purchase, the Shares on the terms and subject to the conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01 PURCHASE AND SALE. Seller agrees to sell to Purchaser,
and Purchaser agrees to purchase from Seller, all of the right, title and
interest of Seller in and to the Shares at the Closing on the terms and subject
to the conditions set forth in this Agreement.
1.02 CONSIDERATION. In consideration for the Shares, Seller
shall transfer and assign to Purchaser, and Purchaser shall assume and agree to
perform and discharge (i) pursuant to a Supplemental Indenture (the
"SUPPLEMENTAL INDENTURE") and an Amendment to the Pledge Agreement (the "PLEDGE
AGREEMENT Amendment"), all of Seller's obligations (the "DEBT OBLIGATIONS")
under the Indenture, pursuant to which Seller has issued and outstanding Series
B Senior Secured Notes due 2001 in the aggregate principal amount of
approximately $93,070,000 as of the date hereof, and is obligated to pay accrued
interest equal to approximately $30,941,000 as of the date hereof, and (ii) all
of Seller's liability (the "PENSION LIABILITY") as Plan Sponsor of the
Retirement Plan of Xxxxxxx Group Inc. for Salaried Non-Bargaining Unit
Employees, Retirement Plan of Xxxxxxx Group Inc. for Bargaining Unit and Hourly
Employees and the Special Pension Plan of Xxxxxxx Group Inc., pursuant to which
Seller had a pension benefit liability of approximately $8,700,000 as of the
date hereof.
1.03 CLOSING. The Closing will take place at such place as
Purchaser and Seller mutually agree, immediately following the effective time of
the Merger. At the Closing, Purchaser will assume and agree to perform and
discharge the Debt Obligations, pursuant to the Supplemental Indenture and the
Pledge Agreement Amendment, and the Pension Liability. Simultaneously, Seller
will assign and transfer to Purchaser all of Seller's right, title and interest
in and to the Shares by delivering to Purchaser with respect to the Shares, duly
executed stock powers endorsed in blank, with requisite stock transfer tax
stamps, if any, attached. At or prior to the Closing, Seller shall deliver to
the Trustee, pursuant to Section 6.01(4) of the Indenture, an Officers'
Certificate and an Opinion of Counsel.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
2.01 ORGANIZATION OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware. Seller has full corporate power and authority to execute and deliver
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment
and to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including without limitation to
own, hold, sell and transfer the Shares pursuant to this Agreement.
2.02 AUTHORITY. The execution and delivery by Seller of this
Agreement, the Supplemental Indenture and the Pledge Agreement Amendment, and
the performance by Seller of its obligations hereunder and thereunder, have been
duly and validly authorized by the Board of Directors and the sole stockholder
of Seller, no other corporate action on the part of Seller or its stockholder
being necessary. This Agreement, the Supplemental Indenture and the Pledge
Agreement Amendment have been duly and validly executed and delivered by Seller
and constitute legal, valid and binding obligations of Seller enforceable
against Seller in accordance with their terms.
2.03 ORGANIZATION OF THE COMPANIES. The Companies are
corporations duly organized, validly existing and in good standing under the
Laws of their respective jurisdictions of organization, and have full corporate
power and authority to conduct their businesses as and to the extent now
conducted and to own, use and lease their Assets and Properties.
2.04 CAPITAL STOCK.
(a) The authorized capital stock of BOL consists solely of one
hundred (100) shares of common stock, par value $.01 per share, 10 shares of
which have been issued.
(b) The authorized capital stock of CPI consists solely of one
hundred (100) shares of common stock, par value $.01 per share, 100 shares of
which have been issued.
(c) The authorized capital stock of NVH consists solely of one
hundred (100) shares of common stock, par value $.01 per share, 100 shares of
which have been issued.
(d) The Shares are duly authorized, validly issued,
outstanding, fully paid and nonassessable. Seller owns the Shares, beneficially
and of record, free and clear of all Liens, other than under the Indenture and
the Pledge Agreement. Except for this Agreement, there are no outstanding
Options with respect to the Companies. The delivery at the Closing of stock
powers with respect to the Shares, in the manner provided in SECTION 1.03, will
transfer to
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Purchaser good and valid title to the Shares, free and clear of all Liens, other
than under the Indenture and the Pledge Agreement.
2.05 NO CONFLICTS. The execution and delivery by Seller of
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment do
not, and the performance by Seller of its obligations under this Agreement, the
Supplemental Indenture and the Pledge Agreement Amendment and the consummation
of the transactions contemplated hereby and thereby, will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws (or other comparable corporate charter documents) of Seller, any Company
or any Subsidiary;
(b) conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to Seller, any Company or any
Subsidiary or any of their respective Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require Seller, any Company or any Subsidiary to obtain any
consent, approval or action of, make any filing with or give any notice to any
Person as a result or under the terms of, (iv) result in or give to any Person
any right of termination, cancellation, acceleration or modification in or with
respect to, (v) result in or give to any Person any additional rights or
entitlement to increased, additional, accelerated or guaranteed payments under,
or (vi) result in the creation or imposition of any Lien upon Seller, any
Company or any Subsidiary or any of their respective Assets and Properties
under, any material Contract or License to which Seller, any Company or any
Subsidiary is a party or by which any of their respective Assets and Properties
is bound.
2.06 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of Seller, any Company or any Subsidiary is required in connection
with the execution, delivery and performance of this Agreement, the Supplemental
Indenture or the Pledge Agreement Amendment or the consummation of the
transactions contemplated hereby or thereby.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
3.01 ORGANIZATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
Purchaser has full corporate power and authority to execute and deliver this
Agreement, the Supplemental Indenture and the Pledge Agreement Amendment, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby.
3.02 AUTHORITY. The execution and delivery by Purchaser of
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment,
and the performance by Purchaser of its obligations hereunder and thereunder,
have been duly and validly authorized by the Board of Directors of Purchaser, no
other corporate action on the part of Purchaser or its stockholders being
necessary. This Agreement, the Supplemental Indenture and the Pledge Agreement
Amendment have been duly and validly executed and delivered by Purchaser and
constitute legal, valid and binding obligations of Purchaser enforceable against
Purchaser in accordance with their terms.
3.03 NO CONFLICTS. The execution and delivery by Purchaser of
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment do
not, and the performance by Purchaser of its obligations under this Agreement,
the Supplemental Indenture and the Pledge Agreement Amendment and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws (or other comparable corporate charter document) of Purchaser;
(b) conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to Purchaser or any of its
Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require Purchaser to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, or (iv) result in the creation or imposition of any Lien upon
Purchaser or any of its Assets or Properties under, any material Contract or
License to which Purchaser is a party or by which any of its Assets and
Properties is bound.
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3.04 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of Purchaser is required in connection with the execution, delivery
and performance of this Agreement, the Supplemental Indenture or the Pledge
Agreement Amendment or the consummation of the transactions contemplated hereby
or thereby.
ARTICLE IV
DEFINITIONS
4.01 DEFINITIONS. As used in this Agreement, the following
defined terms have the meanings indicated below:
"AGREEMENT" means this Purchase Agreement, as the same shall
be amended from time to time.
"ASSETS AND PROPERTIES" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, investment assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and intellectual property.
"BGL MERGER" has the meaning ascribed to it in the forepart of
this Agreement.
"CLOSING" means the closing of the transactions contemplated
by SECTION 1.03.
"COMPANIES" has the meaning ascribed to it in the forepart of
this Agreement.
"CONTRACT" means any agreement, lease, license, evidence of
indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
"DEBT OBLIGATIONS" has the meaning ascribed to it in SECTION
1.02.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"INDENTURE" has the meaning ascribed to it in the forepart of
this Agreement.
"LAWS" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any
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domestic or foreign state, county, city or other political subdivision or of any
Governmental or Regulatory Authority.
"LICENSES" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"MERGER" has the meaning ascribed to it in the forepart of
this Agreement.
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive or exercise any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock of such Person, including
any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.
"ORDER" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"PENSION LIABILITY" has the meaning ascribed to it in SECTION
1.02.
"PERSON" means any natural person, corporation, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.
"PLEDGE AGREEMENT" has the meaning ascribed to it in the
forepart of this Agreement.
"PLEDGE AGREEMENT AMENDMENT" has the meaning ascribed to it in
SECTION 1.02.
"PLEDGED SHARES" has the meaning ascribed to it in the
forepart of this Agreement.
"PREDECESSOR" has the meaning ascribed to it in the forepart
of this Agreement.
"PURCHASER" has the meaning ascribed to it in the forepart of
this Agreement.
"SELLER" has the meaning ascribed to it in the forepart of
this Agreement.
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"SHARES" has the meaning ascribed to it in the forepart of
this Agreement.
"SUBSIDIARY" means any Person in which any of the Companies,
directly or indirectly through Subsidiaries or otherwise, beneficially owns more
than fifty percent (50%) of either the equity interests in, or the voting
control of, such Person.
"SUPPLEMENTAL INDENTURE" has the meaning ascribed to it in
SECTION 1.02.
"TRUSTEE" has the meaning ascribed to it in the forepart of
this Agreement.
ARTICLE V
MISCELLANEOUS
5.01 NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Purchaser, to:
BGLS Holding Inc.
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. XxXxx
If to Seller, to:
BGLS Inc.
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. XxXxx
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with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx Xxxxxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 5.01, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 5.01, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 5.01, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section 5.01). Any party from time to time may change
its address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.
5.02 ENTIRE AGREEMENT. This Agreement, the Supplemental
Indenture and the Pledge Agreement Amendment supersede all prior discussions and
agreements between the parties with respect to the subject matter hereof and
thereof, and contain the sole and entire agreement between the parties hereto
with respect to the subject matter hereof and thereof.
5.03 WAIVER. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.
5.04 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
5.05 NO THIRD PARTY BENEFICIARY. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person.
5.06 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Purchaser may assign any or all of its
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rights, interests and obligations hereunder to a wholly-owned subsidiary,
provided that any such subsidiary agrees in writing to be bound by all of the
terms, conditions and provisions contained herein. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and permitted
assigns.
5.07 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
5.08 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
Contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
5.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
BGLS HOLDING INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
BGLS INC.
By: /s/ Xxxxxxxx X. Xxx Xxxxxx
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Name: Xxxxxxxx X. Xxx Xxxxxx
Title: Vice President and Chief
Financial Officer
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