EXHIBIT 20
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT is dated as of January 30, 2006, by and
among Vector Group Ltd., a Delaware corporation (the "Company"), XxXxx Gamma
Limited Partnership, a Nevada limited partnership ("XxXxx Gamma" or "Seller")
and the Person whose name is set forth on EXHIBIT A hereto (the "Purchaser").
RECITALS
WHEREAS, the Purchaser desires to purchase at the Closing (as
defined below) and the Seller desires to sell, upon the terms and conditions
stated in this Agreement (as defined below), such number of shares, $0.10 par
value, of common stock of the Company (the "Shares"), as set forth on EXHIBIT A
attached hereto, in a private resale transaction not involving any public
offering;
WHEREAS, the Seller has retained the services of Jefferies &
Company, Inc. ("Jefferies") to assist the Seller in connection with a private
placement of the Shares to be sold pursuant to this Agreement; and
WHEREAS, the Seller and the Purchaser have reached certain
agreements with regard to the foregoing transactions, all upon, and subject to,
the terms and conditions more particularly described herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:
"Affiliate" means, with respect to a Person, (a) any director,
executive officer, general partner, managing member or other manager of such
Person, (b) any other Person (other than a Subsidiary) which directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person and (c) if such Person is an
individual, any member of the immediate family (including parents, spouse and
children) of such individual, any trust whose principal beneficiary is such
individual or one or more members of such individual's immediate family and any
Person who is controlled by any such member or
trust. The term "control" means (i) the power to vote 25% or more of the
securities or other equity interests of a Person having ordinary voting power
(on a fully diluted basis), or (ii) the possession, directly or indirectly, of
any other power to direct or cause the direction of the management and policies
of a Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreement" means this Purchase Agreement, as amended or
supplemented from time to time.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by law or executive order to close.
"Closing" has the meaning assigned thereto in Section 2.2.
"Closing Date" has the meaning assigned thereto in Section 2.2.
"Commission" means the United States Securities and Exchange
Commission.
"Commission Reports" has the meaning assigned thereto in Section
5.5.
"Company" has the meaning assigned thereto in the Preamble.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), claim, priority,
right of first refusal or similar right, or other security agreement of any kind
or nature whatsoever (including, without limitation, any conditional sale or
other title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code or any other similar recording or notice
statute, and any lease having substantially the same effect as any of the
foregoing).
"Material Adverse Effect" means a material adverse effect on (a) the
management, business, results of operations, property or condition (financial or
otherwise) of the Company or (b) the ability of the Company to perform its
obligations pursuant to the transactions contemplated by this Agreement.
"Organizational Documents" means with respect to a corporation, the
articles or certificate of incorporation and by-laws (or the memorandum and
articles of association, as the case may be) of such corporation; with respect
to a partnership, the certificate of partnership (or
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limited partnership, as applicable) and partnership agreement; with respect to a
trust, the trust agreement or document forming such trust; with respect to a
limited liability company, the articles of organization and operating agreement;
together with the analogous documents for any corporate, limited liability
company or partnership general partner, in each case, as amended up to the date
hereof.
"Per Share Purchase Price" equals $ 17.71, subject to adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions with respect to the Shares that occur after the date of
this Agreement and prior to the Closing Date.
"Person" means any individual, firm, corporation, partnership,
trust, limited liability company, incorporated or unincorporated association,
joint venture, joint stock company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Purchaser" has the meaning assigned thereto in the Preamble.
"Registrable Securities" means the Shares; provided, however, that
securities shall only be treated as Registrable Securities if and only for so
long as they (A) have not been disposed of pursuant to a registration statement
that is effective under the Securities Act, (B) have not been sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act so that all transfer restrictions and restrictive legends
with respect thereto are permitted to be removed upon the consummation of such
sale or (C) are held by a Holder (as defined in Article VII).
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning assigned thereto in the Preamble.
"Shares" has the meaning assigned thereto in the Recitals.
"Transaction Documents" means this Agreement and any other documents
or agreements executed in connection with the transactions contemplated
hereunder.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
2.1 PURCHASE AND SALE OF THE COMMON STOCK. Subject to the terms and
conditions hereof, XxXxx Gamma agrees to sell 3,020,750 Shares and the Purchaser
agrees to purchase, on the Closing Date, the number of Shares set forth opposite
the Purchaser's name on EXHIBIT A for the Per Share Purchase Price.
2.2 CLOSING. Subject to the terms and conditions of this Agreement
and satisfaction (or waiver by the party for whose benefit such condition is
established) of the closing conditions set forth in Section 6.1, the sale and
purchase of the Shares shall take place at the closing (the
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"Closing") to be held at 5 p.m. New York City time on January 30, 2006, or at
such other time as the Seller and the Purchaser may agree in writing (the
"Closing Date"). The Closing shall occur at the offices of Xxxxxx & Xxxxxxx LLP,
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or such other
location as the parties shall mutually agree.
2.3 PAYMENT. At the Closing, the Purchaser will pay the aggregate
purchase price set forth opposite its name on EXHIBIT A hereof by wire transfer
of immediately available funds in accordance with the Seller's wire instructions
set forth on EXHIBIT B hereto and the Seller will have the respective Shares to
be sold by the Seller transferred to the account of the Purchaser or its
designees through the Depositary Trust Company's Deposits and Withdrawal at
Custodian ("DWAC") program and direct the Company's transfer agent to reflect
such transfer in the records of the Company on the Closing Date or the
immediately next succeeding Business Day.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser, the
Company and Jefferies as follows:
3.1 AUTHORIZATION; NO CONTRAVENTION. The Seller is duly organized,
validly existing and in good standing as a limited partnership, as applicable,
under the laws of the state of its formation. The execution, delivery and
performance by the Seller of this Agreement (a) is within the Seller's power and
authority and has been duly authorized by all necessary partnership action, (b)
does not contravene the terms of the Seller's Organizational Documents and (c)
will not violate or conflict with any requirement of law relating to the Seller.
3.2 BINDING EFFECT. This Agreement has been duly executed and
delivered by the Seller, and this Agreement, and the other Transaction Documents
to which the Seller is a party, constitute the legal, valid and binding
obligation of the Seller enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally and by judicial
discretion in the enforcement of equitable remedies.
3.3 RIGHTS TO SHARES. The Seller owns and has valid and marketable
title to the Shares to be sold by the Seller, free and clear of all Liens and
there are no actions, suits, proceedings or claims pending, with respect to or
in any manner affecting the ownership of the Shares being sold by the Seller.
Upon delivery at the Closing by the Seller of the Shares to be sold by the
Seller pursuant to this Agreement, valid, marketable and unencumbered title to
such Shares, free and clear of any Liens, will pass to the Purchaser of such
Shares.
3.4 GOVERNMENTAL AUTHORIZATIONS. No notice to, consent of, or
registration, filing or declaration with, any Governmental Authority is required
in connection with the Seller's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby.
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3.5 NO REGISTRATION/NO GENERAL SOLICITATION. Based, in part, upon
the representations and warranties of the Purchaser in Article 4 of this
Agreement, the sale of the Shares to the Purchaser hereunder is not required to
be registered under the Securities Act. No general solicitation or general
advertising within the meaning of Rule 502(c) promulgated under the Securities
Act has been used by the Seller in connection with the offering of the Shares to
the Purchaser.
3.6 ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF SECURITIES.
Based upon the assumption that the transactions contemplated by this Agreement
are consummated in all material respects in conformity with this Agreement, the
Seller acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm's length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Seller further acknowledges that the
Purchaser is not acting as a financial advisor or fiduciary of the Seller (or in
any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Purchaser or any of its
respective representatives or agents in connection with this Agreement and the
transactions contemplated hereby and thereby is merely incidental to the
Purchaser's purchase of the Shares. The Seller further represents to the
Purchaser and the Company that the Seller's decision to enter into this
Agreement has been based solely on the independent evaluation of the
transactions contemplated hereby by the Seller and its representatives.
3.7 PLACEMENT AGENT FEES AND EXPENSES. The Seller acknowledges that
any fees and expenses owed to Jefferies in connection with acting as placement
agent with respect to the purchase and sale of the Shares shall be the sole
responsibility of the Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller, the
Company and Jefferies as follows:
4.1 AUTHORIZATION; NO CONTRAVENTION. The Purchaser is duly
organized, validly existing and in good standing as a corporation, limited
liability company, trust or general or limited partnership, as applicable, under
the laws of the state of its organization. The execution, delivery and
performance by the Purchaser of this Agreement (a) is within the Purchaser's
power and authority and has been duly authorized by all necessary trust,
partnership, company or corporate action, (b) does not contravene the terms of
the Purchaser's Organizational Documents and (c) will not violate or conflict
with any requirement of law relating to the Purchaser.
4.2 BINDING EFFECT. This Agreement has been duly executed and
delivered by the Purchaser, and this Agreement, and the other Transaction
Documents to which the Purchaser is a party, constitute the legal, valid and
binding obligations of the Purchaser enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting
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the enforcement of creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.
4.3 ACCREDITED INVESTOR STATUS. The Purchaser is a "qualified
institutional buyer" as defined in Rule 144A of the Securities Act. The
Purchaser hereby represents that, either by reason of the Purchaser's business
or financial experience, the Purchaser has the capacity to protect the
Purchaser's own interests in connection with the purchase of the Shares. In
addition, the Purchaser is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interest.
4.4 INVESTMENT PURPOSE; LEGEND. The Shares to be issued pursuant to
the terms of this Agreement are being or will be acquired for its own account
and with no intention of distributing or reselling such securities or any part
thereof in any transaction that would be in violation of the Securities Act or
the securities laws of any state, without prejudice, however, to the rights of
the Purchaser at all times to sell or otherwise dispose of all or any of the
Shares under an effective registration statement under the Securities Act, or
under an exemption from such registration available under the Securities Act. If
the Purchaser should in the future decide to dispose of any of the Shares, the
Purchaser understands and agrees that it may do so only in compliance with the
Securities Act and applicable state securities laws, as then in effect. The
Purchaser agrees to the imprinting, so long as required by law, of a legend on
certificates representing the Shares (or, if the Shares are not certificated, to
the placing of a proper notation) to the following effect:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT XX
0000 XX XXX XXXXXX XXXXXX (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED OR
SOLD TO UNITED STATES PERSONS OR IN THE UNITED STATES UNLESS THEY
ARE REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
4.5 GOVERNMENTAL AUTHORIZATIONS. No notice to, consent of, or
registration, filing or declaration with, any Governmental Authority is required
in connection with the Purchaser's execution, delivery and performance of this
Agreement and consummation of the transactions contemplated hereby.
4.6 NO BROKERS OR FINDERS. No agent, broker, finder, or investment
or commercial banker or other Person or firm engaged by or acting on behalf of
the Purchaser in connection with the negotiation, execution or performance of
this Agreement or the transactions contemplated herein is or will be entitled to
any brokerage or finder's or similar fee or other commission as a result of the
sale of the Shares to the Purchaser pursuant to this Agreement.
4.7 OWNERSHIP OF COMMON STOCK; VOTING AND OTHER AGREEMENTS. The
Purchaser does not have any agreements, arrangements or understandings with any
other Person (other than with other purchasers who are Affiliates of the
Purchaser) with regard to acquiring, holding, voting or disposing of the
outstanding Shares.
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4.8 UNDERSTANDING OF RISK. The Purchaser recognizes that an
investment in the Company involves substantial risks. The Purchaser acknowledges
that it has carefully considered and has, to the extent the Purchaser believes
the discussion necessary, discussed with the Purchaser's professional, legal,
financial and tax advisers, the Purchaser's investment in the Company.
4.9 AVAILABILITY OF INFORMATION. The Purchaser acknowledges that it
has had the opportunity to discuss with representatives of the Seller and the
Company the terms and conditions of the transactions contemplated hereby and the
Purchaser's investment in the Company. The Seller or the Company has made
available to the Purchaser all documents and information that the Purchaser has
requested relating to an investment in the Company.
4.10 OFFER ACKNOWLEDGEMENT. The Purchaser acknowledges that the
Shares have been offered to it only by approach on an individual basis.
4.11 EXPERIENCE OF PURCHASER. By reason of the Purchaser's business
or financial experience, or that of the Purchaser's professional advisors, the
Purchaser is capable of evaluating information and data relating to the
Company's industry and the merits and risks of an investment in the Company and
of protecting its own interest in connection with an investment in the Company
and is able to bear the economic risk of an investment in the Company.
4.12 RESALE OF SHARES. The Purchaser acknowledges that no
representations or promises have been made concerning the value of the Shares
and the Purchaser acknowledges that it may be required to bear the economic risk
of its investment in the Company for an indefinite period of time.
4.13 NO REPRESENTATIONS BY PLACEMENT AGENT. The Purchaser
acknowledges that Jefferies makes no representation or warranty, express or
implied, to the Purchaser regarding the accuracy or completeness of any
information concerning the Seller, the Company, the Shares or the transactions
contemplated hereby.
4.14 PLACEMENT AGENT FEES AND EXPENSES. The Purchaser acknowledges
that it has been advised that any fees and expenses owed to Jefferies in
connection with acting as placement agent with respect to the purchase and sale
of the Shares shall be the sole responsibility of the Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Seller, the Purchaser and
Jefferies as follows:
5.1 AUTHORIZATION; NO CONTRAVENTION. The Company is duly organized,
validly existing and in good standing as a corporation under the laws of the
state of Delaware. The execution, delivery and performance by the Company of
this Agreement (a) is within the
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Company's power and authority and has been duly authorized by all necessary
corporate action, (b) does not contravene the terms of the Company's
Organizational Documents or any amendment thereof and (c) will not violate or
conflict with any requirement of law directly relating to the Company.
5.2 BINDING EFFECT. This Agreement has been duly executed and
delivered by the Company, and this Agreement, and the other Transaction
Documents to which the Company is a party, constitute the legal, valid and
binding obligation of the Company enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws affecting the enforcement of creditors' rights generally and by judicial
discretion in the enforcement of equitable remedies.
5.3 CAPITALIZATION. The capitalization of the Company is described
in the Company's Commission Reports. All of the Company's outstanding shares of
capital stock have been duly authorized and validly issued, are fully paid for
and are non-assessable. No shares of capital stock of the Company, including the
Shares to be sold pursuant to this Agreement, are subject to preemptive rights
or any other similar rights of the stockholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the Company. Other
than as disclosed in the Commission Reports, there are no (i) outstanding
options, warrants, rights to subscribe for, puts, calls, rights of first
refusal, agreements, understandings, claims or other commitments or rights of
any character whatsoever relating to, or securities or rights convertible into,
exercisable for, or exchangeable for any shares of capital stock of the Company,
or arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company (excluding those rights that have been
waived); (ii) agreements or arrangements under which the Company is obligated to
register the sale of any of its securities under the Securities Act (except as
contemplated under Article 7) or the resale of its securities (except those
obligations that have been complied with); and (iii) anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any
agreement providing rights to security holders) that will be triggered by the
sale of the Shares.
5.4 NO CONFLICTS; NO VIOLATION.
(a) The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby (including, without limitation, the issuance of the Shares) will not (i)
conflict with or result in a violation of any provision of its Organizational
Documents, (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or
both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, or
instrument to which the Company is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including United States
federal and state securities laws and regulations and regulations of any
self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company, except for such conflicts, breaches,
defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect.
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(b) The Company is not in violation of its Organizational
Documents and the Company is not in default under any agreement, indenture or
instrument to which the Company is a party or by which any property or assets of
the Company is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.
(c) The Company is not conducting its business in violation of
any law, ordinance or regulation of any governmental entity, the failure to
comply with which would, individually or in the aggregate, have a Material
Adverse Effect.
(d) The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self regulatory agency in order for it
to execute, deliver or perform any of its obligations under this Agreement in
accordance with the terms hereof, other than such as have been made or obtained,
and except for any filings required to be made under federal or state securities
laws. All consents, authorizations, orders, filings and registrations that the
Company is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the Closing Date.
5.5 COMMISSION REPORTS, FINANCIAL STATEMENTS. The Company has timely
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission since January 1, 2005, pursuant to the
reporting requirements of the Exchange Act (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits) incorporated by reference
therein, being hereinafter referred to herein as the "Commission Reports"). The
Purchaser has had access to true and complete copies of the Commission Reports.
As of their respective dates, the Commission Reports and all other reports,
schedules, forms, statements and other documents filed by it with the Commission
since January 1, 2005 complied in all material respects with the requirements of
the Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the Commission promulgated thereunder applicable to the
Commission Reports, and none of the Commission Reports and all other reports,
schedules, forms, statements and other documents filed by it with the Commission
since January 1, 2005, at the time they were filed with the Commission,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the Commission Reports complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto. Such financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may not include footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company as of the
dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments).
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5.6 WELL-KNOWN SEASONED ISSUER/S-3 STATUS. The Company is a
"well-known seasoned issuer" as defined in Rule 405 of the Securities Act and
currently meets the "registrant eligibility" requirements set forth in the
general instructions to Form S-3 to enable the registration of the resale of the
Registrable Securities and, to the Company's knowledge, there exist no facts or
circumstances that could reasonably be expected to prohibit or delay the filing
or effectiveness of a registration statement on Form S-3 covering the resale of
the Registrable Securities.
5.7 NO GENERAL SOLICITATION. No general solicitation or general
advertising within the meaning of Rule 502(c) promulgated under the Securities
Act has been used in connection with the offering of the Shares to the
Purchaser.
5.8 NO REGISTRATION. Assuming the accuracy of the representations
and warranties made by, and compliance with the covenants of, the Seller and the
Purchaser in this Agreement, and assuming the sale of the Shares is consummated
in accordance with the terms and conditions of this Agreement, no registration
of the Shares under the Securities Act is required in connection with the offer
and sale of the Shares by the Seller to the Purchaser as contemplated by the
Agreement.
5.9 NO MANIPULATION OF STOCK. The Company has not taken and will
not, in violation of applicable law, take any action outside the ordinary course
of business designated to or that might reasonably be expected to cause or
result in unlawful manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 PURCHASER'S OBLIGATIONS - LEGAL OPINION. The Purchaser's
obligation to purchase the Shares at the Closing is subject to the Company's
counsel having delivered a legal opinion to the Purchaser reasonably
satisfactory to counsel to Jefferies substantially in the form attached hereto
as EXHIBIT C.
ARTICLE VII
REGISTRATION RIGHTS
7.1 DEFINITIONS FOR ARTICLE VII. As used in this Article VII, the
following terms shall have the following meanings:
(a) "Affiliate" means, with respect to any Person (as defined
below), any other Person controlling, controlled by or under direct or indirect
common control with such Person (for the purposes of this definition "control,"
when used with respect to any specified Person, shall mean the power to direct
the management and policies of such person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" shall have meanings correlative to the
foregoing).
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(b) "Business Day" means a day Monday through Friday on which
banks are generally open for business in New York.
(c) "Holders" means the Purchaser holding Registrable Securities
or any person to whom the rights under Article VII have been transferred in
accordance with Section 7.9 hereof.
(d) "Indemnified Party" has the meaning set forth in Section
7.6(c).
(e) "Indemnifying Party" has the meaning set forth in Section
7.6(c).
(f) "Person" means any person, individual, corporation, limited
liability company, partnership, trust or other nongovernmental entity or any
governmental agency, court, authority or other body (whether foreign, federal,
state, local or otherwise).
(g) The terms "register," "registered" and "registration" refer
to the registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the deemed effectiveness of such
registration statement.
(h) "Registrable Securities" means the Shares; provided, however,
that securities shall only be treated as Registrable Securities if and only for
so long as they (A) have not been disposed of pursuant to an effective
registration statement under the Securities Act, (B) have not been sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act so that all transfer restrictions and restrictive legends
with respect thereto are permitted to be removed upon the consummation of such
sale or (C) are held by a Holder.
(i) "Registration Expenses" means all expenses incurred by the
Company in complying with Section 7.2 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and expenses of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the fees of legal counsel for any Holder).
(j) "Registration Statement" has the meaning set forth in Section
7.2.
(k) "Registration Period" has the meaning set forth in Section
7.4(a).
(l) "Selling Expenses" means all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and expenses of legal counsel for any Holder.
7.2 The Company shall file a registration statement covering the
resale of the Registrable Securities on a Form S-3 Registration Statement (the
"Registration Statement") with the Commission and effect the registration,
qualifications or compliances (including, without limitation, the execution of
any required undertaking to file post-effective amendments, appropriate
qualifications or exemptions under applicable blue sky or other state securities
laws and appropriate compliance with applicable securities laws, requirements or
regulations) immediately following the Closing.
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7.3 All Registration Expenses incurred in connection with any
registration, qualification, exemption or compliance pursuant to Section 7.2
shall be borne by the Company. All Selling Expenses relating to the sale of
securities registered by or on behalf of Holders shall be borne by such Holders
pro rata on the basis of the number of securities so registered.
7.4 In the case of the registration, qualification, exemption or
compliance effected by the Company pursuant to this Agreement, the Company
shall, upon reasonable request, inform each Holder as to the status of such
registration, qualification, exemption and compliance. At its expense the
Company shall:
(a) use its commercially reasonable efforts to keep such
registration, and any qualification, exemption or compliance under state
securities laws which the Company reasonably determines to obtain, continuously
effective until the earlier of the following: (i) the second anniversary of the
Effective Date or (ii) the date all Shares may be sold under Rule 144 during any
90 day period. The period of time during which the Company is required hereunder
to keep the Registration Statement effective is referred to herein as "the
Registration Period."
(b) advise the Holders promptly, but in no event later than five
Business Days:
(i) when any amendment to the Registration Statement has been
filed with the Commission and when any post-effective amendment thereto has
become effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus included therein or
for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for such purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities
included therein for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and
(v) of the occurrence of any event that requires the making
of any changes in the Registration Statement or the prospectus so that, as of
such date, the statements therein are not misleading and do not omit to state a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the prospectus, in the light of the circumstances under
which they were made) not misleading;
(c) use its commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement at the earliest possible time;
(d) promptly furnish to each Holder, without charge, at least one
copy of such Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so requests in
writing, all exhibits in the form filed with the Commission;
12
(e) during the Registration Period, promptly deliver to each
Holder, without charge, as many copies of the prospectus included in such
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use, consistent with the
provisions hereof, of the prospectus or any amendment or supplement thereto by
each of the selling Holders of Registrable Securities in connection with the
offering and sale of the Registrable Securities covered by the prospectus or any
amendment or supplement thereto. In addition, upon the reasonable request of the
Holder and subject in all cases to confidentiality protections reasonably
acceptable to the Company, the Company will meet with a Holder or a
representative thereof at the Company's headquarters to discuss all information
relevant for disclosure in the Registration Statement covering the Registrable
Securities, and will otherwise cooperate with any Holder conducting an
investigation for the purpose of reducing or eliminating such Holder's exposure
to liability under the Securities Act, including the reasonable production of
information at the Company's headquarters;
(f) during the Registration Period, promptly deliver to each
Holder, without charge, (i) as soon as practicable (but in the case of the
annual report of the Company to its stockholders, within 120 days after the end
of each fiscal year of the Company) one copy of the following documents, other
than those documents available via XXXXX: (A) its annual report to its
stockholders, if any (which annual report shall contain financial statements
audited in accordance with generally accepted accounting principles in the
United States of America by a firm of certified public accountants of recognized
standing); (B) if not included in substance in its annual report to
stockholders, its annual report on Form 10-K (or similar form); (C) each of its
quarterly reports to its stockholders, and, if not included in substance in its
quarterly reports to stockholders, its quarterly report on Form 10-Q (or similar
form), and (D) a copy of the full Registration Statement (the foregoing, in each
case, excluding exhibits); and (ii) upon reasonable request, all exhibits
excluded by the parenthetical to the immediately preceding clause (D), and all
other information that is generally available to the public;
(g) prior to any public offering of Registrable Securities
pursuant to any Registration Statement, promptly take such actions as may be
necessary to register or qualify or obtain an exemption for offer and sale under
the securities or blue sky laws of such jurisdictions as any such Holders may
reasonably request in writing, provided that the Company shall not for any such
purpose be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to consent to
general service of process in any such jurisdiction, and do any and all other
acts or things reasonably necessary or advisable to enable the offer and sale in
such jurisdictions of the Registrable Securities covered by such Registration
Statement;
(h) upon the occurrence of any event contemplated by Section
7.4(b)(v) above, the Company shall use its commercially reasonable efforts to
promptly prepare a post-effective amendment to the Registration Statement or a
supplement to the related prospectus, or file any other required document so
that, as thereafter delivered to purchasers of the Registrable Securities
included therein, the prospectus will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
13
(i) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission which could affect
the sale of the Registrable Securities;
(j) use its commercially reasonable efforts to cause all
Registrable Securities to be listed on each securities exchange or market, if
any, on which equity securities issued by the Company have been listed; and
(k) use its commercially reasonable efforts to take all other
steps necessary to effect the registration of the Registrable Securities
contemplated hereby and to enable the Holders to sell Registrable Securities
under Rule 144.
7.5 The Holders shall have no right to take any action to restrain,
enjoin or otherwise delay any registration pursuant to Section 7.2 hereof as a
result of any controversy that may arise with respect to the interpretation or
implementation of this Agreement.
7.6 (a) To the extent permitted by law, the Company shall indemnify
each Holder, each underwriter of the Registrable Securities and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which any registration that has been effected pursuant to this
Agreement, against all claims, losses, damages and liabilities (or action in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened (subject to Section 7.6(c) below), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in the Registration Statement, prospectus, any amendment
or supplement thereof, or other document incident to any such registration,
qualification or compliance or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of any rule or regulation
promulgated by the Securities Act applicable to the Company and relating to any
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each Holder, each
underwriter of the Registrable Securities and each person controlling such
Holder, for reasonable legal and other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action as incurred; provided that the Company will not be liable in
any such case to the extent that any untrue statement or omission or allegation
thereof is made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder and stated to be
specifically for use in preparation of such Registration Statement, prospectus,
any amendment or supplement thereof, or other document incident to any such
registration, qualification or compliance; provided, further, that the Company
will not be liable in any such case where the claim, loss, damage or liability
arises out of or is related to the failure of the Holder to comply with the
covenants and agreements contained in this Agreement respecting sales of
Registrable Securities.
(b) Each Holder will severally, if Registrable Securities held by
such Holder are included in the securities as to which such registration is
being effected, indemnify the Company, each of its directors and officers, each
underwriter of the Registrable Securities and each person who controls the
Company within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof),
including any of
14
the foregoing incurred in settlement of any litigation, commenced or threatened
(subject to Section 7.6(c) below), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, prospectus, or any amendment or supplement thereof,
incident to any such registration, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, and will reimburse the Company, such directors
and officers, each underwriter of the Registrable Securities and each person
controlling the Company for reasonable legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action as incurred, in each case, to the extent, but only
to the extent, that such untrue statement or omission or allegation thereof is
made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Holder and stated to be specifically for use
in preparation of the Registration Statement, or prospectus; provided that the
indemnity shall not apply to the extent that such claim, loss, damage or
liability results from the fact that a current copy of the prospectus was not
made available to the person or entity asserting the loss, liability, claim or
damage at or prior to the time such furnishing is required by the Securities
Act. Notwithstanding the foregoing, (x) a Holder's aggregate liability pursuant
to this subsection (b) and subsection (d) shall be limited to the net amount
received by the Holder from the sale of the Registrable Securities and (y) the
Holder shall not be liable to the Company for any consequential damages,
including lost profits, solely with respect to losses, claims, damages,
liabilities or expenses to which the Company (or any officer, director or
controlling person as set forth above) may become subject (under the Securities
Act or otherwise), arising out of, or based upon, any failure by the Company to
comply with the covenants and agreements concerning the sale or other
disposition by each Holder of the Registrable Securities.
(c) Each party entitled to indemnification under this Section 7.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party (at its expense) to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such Indemnified Party's expense, and provided, further, that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement, unless
such failure is materially prejudicial to the Indemnifying Party in defending
such claim or litigation. An Indemnifying Party shall not be liable for any
settlement of an action or claim effected without its written consent (which
consent will not be unreasonably withheld). No Indemnifying Party, in its
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 7.6 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of
15
indemnifying such Indemnified Party thereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which resulted
in such loss, liability, claim, damage or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
7.7 (a) Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event requiring the preparation of a supplement
or amendment to a prospectus relating to Registrable Securities so that, as
thereafter delivered to the Holders, such prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, each
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to the Registration Statement and prospectus contemplated by Section 7.2 until
its receipt of copies of the supplemented or amended prospectus from the Company
and, if so directed by the Company, each Holder shall deliver to the Company all
copies, other than permanent file copies then in such Holder's possession, of
the prospectus covering such Registrable Securities current at the time of
receipt of such notice.
(b) Each Holder shall suspend, upon request of the Company, any
disposition of Registrable Securities pursuant to the Registration Statement and
prospectus contemplated by Section 7.2 during (i) any period not to exceed two
90-day periods within any one 12-month period the Company requires in connection
with a primary underwritten offering of equity securities and (ii) any period,
not to exceed one 45-day period per circumstance or development, when the
Company determines in good faith that offers and sales pursuant thereto should
not be made by reason of the presence of material undisclosed circumstances or
developments with respect to which the disclosure that would be required in such
a prospectus is premature or would have an adverse effect on the Company.
(c) As a condition to the inclusion of its Registrable
Securities, each Holder shall furnish to the Company such information regarding
such Holder and the distribution proposed by such Holder as the Company may
request in writing, including completing a questionnaire in the form attached
hereto as EXHIBIT D, or as shall be required in connection with any registration
referred to in this Article 7.
(d) Each Holder hereby covenants with the Company (i) not to make
any sale of the Registrable Securities without effectively causing the
prospectus delivery requirements under the Securities Act, if any, to be
satisfied and (ii) if such Registrable Securities are to be sold by any method
or in any transaction other than on a national securities exchange, Nasdaq or in
the over-the-counter market, in privately negotiated transactions, or in a
combination of such methods, to notify the Company at least two business days
prior to the date on which the Holder first offers to sell any such Registrable
Securities.
16
(e) Each Holder acknowledges and agrees that the Registrable
Securities sold pursuant to the Registration Statement are not transferable on
the books of the Company unless the stock certificate submitted to the transfer
agent evidencing such Registrable Securities is accompanied by a certificate
reasonably satisfactory to the Company to the effect that (i) the Registrable
Securities have been sold in accordance with such Registration Statement and
(ii) the requirement of delivering a current prospectus has been satisfied.
(f) Each Holder agrees not to take any action with respect to any
distribution deemed to be made pursuant to such Registration Statement which
would constitute a violation of Regulation M under the Exchange Act or any other
applicable rule, regulation or law.
(g) At the end of the Registration Period, the Holders shall
discontinue sales of shares pursuant to such Registration Statement upon receipt
of notice from the Company of its intention to remove from registration the
shares covered by such Registration Statement which remain unsold, and such
Holders shall notify the Company of the number of shares registered which remain
unsold immediately upon receipt of such notice from the Company.
7.8 With a view to making available to the Holders the benefits of
certain rules and regulations of the Commission which at any time permit the
sale of the Registrable Securities to the public without registration, so long
as the Holders still own Registrable Securities, the Company shall use its
reasonable best efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times;
(b) file with the Commission in a timely manner all reports and
other documents required of the Company under the Exchange Act; and
(c) so long as a Holder owns any Registrable Securities, furnish
to such Holder, upon any reasonable request, a written statement by the Company
as to its compliance with Rule 144 under the Securities Act, and of the Exchange
Act, a copy of the most recent annual or quarterly report of the Company if such
reports are not available via XXXXX, and such other reports and documents of the
Company as such Holder may reasonably request if such reports or documents are
not available via XXXXX in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such securities without registration.
7.9 The rights granted to the Holders by the Company under Section
7.2 may be assigned in full by a Holder in connection with a transfer by such
Holder of its Registrable Securities, provided, however, that (i) such transfer
may otherwise be effected in accordance with applicable securities laws; and
(ii) such transferee agrees to comply with the terms and provisions of this
Agreement, and such transfer is otherwise in compliance with this Agreement.
Except as specifically permitted by this Section 7.9, the rights of a Holder
with respect to Registrable Securities as set out herein shall not be
transferable to any other Person, and any attempted transfer shall cause all
rights of such Holder therein to be forfeited.
7.10 With the written consent of the Company and the Holders holding
at least a majority of the Registrable Securities that are then outstanding, any
provision of this Article 7 may be waived (either generally or in a particular
instance, either retroactively or prospectively
17
and either for a specified period of time or indefinitely) or amended. Upon the
effectuation of each such waiver or amendment, the Company shall promptly give
written notice thereof to the Holders, if any, who have not previously received
notice thereof or consented thereto in writing.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION. In consideration of the Purchaser's execution
and delivery of this Agreement and its acquisition of the Shares hereunder, and
in addition to all of the Seller's other obligations under this Agreement, the
Seller will indemnify and hold harmless the Purchaser and all of its
stockholders, officers, directors, employees and any of the foregoing person's
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses incurred in connection therewith (regardless of whether
any such Indemnitee is a party to the action for which indemnification hereunder
is sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by an Indemnitee as a result of, or arising
out of, or relating to any breach of any representation or warranty made by the
Seller in Section 3 of this Agreement. To the extent that the foregoing
undertaking by the Seller is unenforceable for any reason, the Seller will make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities that is permissible under applicable law.
ARTICLE IX
MISCELLANEOUS
9.1 FEES AND EXPENSES. Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement.
9.2 NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and sent by certified or registered mail, return receipt requested, a recognized
overnight courier service, telecopier or personal delivery, and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified on the signature pages hereto prior to 5:00 p.m. (New York City time)
on a Business Day, (b) the next Business Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Business Day or later than 5:00
p.m. (New York City time) on any Business Day, (c) the Business Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given, if sent by personal delivery or certified or registered mail. The
address for such notices and communications shall be as set forth on the
signature pages attached hereto.
18
9.3 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into this
Agreement.
9.4 AMENDMENTS; WAIVERS. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Seller and the Purchaser or, in the case of a waiver, by the
party against whom enforcement of any such waiver is sought. Unless expressly
provided therein, no waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.
9.5 CONSTRUCTION. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
9.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
Except as expressly set forth in Section 7.9, the Purchaser may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Seller.
9.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
9.8 GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement, and all disputes
directly arising under or with respect to this Agreement, shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof that
would cause or require the application of the law of another jurisdiction.
9.9 SURVIVAL. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and delivery of the Shares.
9.10 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof.
19
9.11 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
9.12 INDEPENDENT NATURE OF PURCHASER'S OBLIGATIONS AND RIGHTS. The
obligations of the Purchaser under this Agreement are independent of the
obligations of any other Person purchasing common stock of the Company from the
Seller on the date hereof, and the Purchaser shall not be responsible in any way
for the performance of the obligations of any such Person. Nothing contained
herein, and no action taken by the Purchaser pursuant hereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers is in any
way acting in concert or as a group with any Person with respect to such
obligations or the transactions contemplated hereby. The Purchaser shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement. The Purchaser has been
represented by its own separate legal counsel in its review and negotiation of
this Agreement.
9.13 FURTHER ASSURANCES. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations, or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
[Signature Pages Follow]
20
IN WITNESS WHEREOF, the parties have caused this Purchase Agreement
to be duly executed as of the date first above written.
COMPANY:
VECTOR GROUP LTD.,
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxx Xxxxxx
---------------------------------------------
Name: Xxxxxxxx X. Xxx Xxxxxx
Title: Vice President and Chief Financial Officer
Address for notices:
Vector Group Ltd.
000 X.X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Telecopy: 000-000-0000
Attention: General Counsel
With a copy (which shall not constitute notice) to:
Milbank Tweed Hadley & XxXxxx LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
S-1
SELLER:
XXXXX GAMMA LIMITED PARTNERSHIP,
a Nevada limited partnership
By: XXXXX GAMMA, INC., its general partner
By: /s/ Xxxxxxx X. XxXxx
---------------------------------------------
Name: Xxxxxxx X. XxXxx
Title: President
Address for notices:
XxXxx Gamma Limited Partnership
000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telecopy: 000-000-0000
Attention: Xxxx Xxxxxx
With a copy (which shall not constitute notice) to:
Akerman Senterfitt
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000-0000
Telecopy: 305-374-5095
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
S-2
PURCHASER:
XXXXXXXXX GROUP, INC.
By: /s/ Xxx Xxxxxx
---------------------------------------------
Name: Xxx Xxxxxx
Title: Chief Financial Officer
Address for notices:
Xxxxxxxxx Group, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attention: General Counsel
With a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx LLP
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: 213-891-8763
Attention: Xxxxxxx Xxxxxx, Esq.
S-3
EXHIBIT A
SCHEDULE OF SHARES PURCHASED
PURCHASER XXXXX GAMMA SHARES SOLD XXXXX TRUST SHARES SOLD TOTAL SHARES PURCHASED AGGREGATE PURCHASE PRICE
--------- ----------------------- ----------------------- ---------------------- ------------------------
Xxxxxxxxx Group, Inc. 3,020,750 0 3,020,750 $53,497,482.50
A-1
EXHIBIT B
WIRE TRANSFER INSTRUCTION
B-1
EXHIBIT C
FORM OF MILBANK LEGAL OPINION
1. On the basis of the foregoing and subject to the qualifications and
assumptions set forth herein, and having regard to legal considerations which we
deem relevant, we are of the opinion that the offer, sale and delivery of the
Shares to the Purchaser by the Seller in the manner contemplated by the Purchase
Agreement does not require registration under the Securities Act of 1933, as
amended (it being understood that we express no opinion as to any subsequent
resale of any Shares).
C-1
EXHIBIT D
FORM OF SELLING SECURITYHOLDER NOTICE & QUESTIONNAIRE
The undersigned beneficial holder of shares of common stock, par
value $0.10 (the "Common Stock" or the "Registrable Securities"), of Vector
Group Ltd. ("Vector" or the "Company"), understands that the Company has filed
or intends to file with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (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 Registrable Securities in
accordance with the terms of the Purchase Agreement (the "Purchase Agreement")
dated as of January 30, 2006, among the Company, XxXxx Gamma Limited
Partnership, a Nevada limited partnership, the XxXxx Family Irrevocable Trust
U/A/D September 8, 1998 and the Purchaser named on Exhibit A thereto. All
capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Purchase Agreement.
Each beneficial owner of Registrable Securities is entitled to the
benefits of the Purchase Agreement. In order to sell or otherwise dispose of any
Registrable Securities pursuant to the Shelf Registration Statement, a
beneficial owner of Registrable Securities generally will be required to be
named as a selling securityholder in the Shelf Registration Statement and the
related prospectus or in a prospectus supplement thereto, deliver a prospectus
to purchasers of Registrable Securities and be bound by those provisions of the
Purchase Agreement applicable to such beneficial owner (including certain
indemnification provisions, as described below). BENEFICIAL OWNERS THAT DO NOT
COMPLETE THIS NOTICE AND QUESTIONNAIRE AND DELIVER IT TO VECTOR AS PROVIDED
BELOW WILL NOT BE NAMED AS SELLING SECURITYHOLDERS IN THE PROSPECTUS OR A
PROSPECTUS SUPPLEMENT AND THEREFORE WILL NOT BE PERMITTED TO SELL ANY
REGISTRABLE SECURITIES PURSUANT TO THE SHELF REGISTRATION STATEMENT. Beneficial
owners are encouraged to complete and deliver this Notice and Questionnaire
prior to the filing of the Shelf Registration Statement or immediately upon the
sale of such Registrable Securities so that such beneficial owners may be named
as selling securityholders in the related prospectus at the time of
effectiveness or in a prospectus supplement thereto. Any beneficial owner of
notes wishing to include its Registrable Securities must deliver to the Company
at the address set forth herein in a properly completed and signed Notice and
Questionnaire.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related prospectus or
in a prospectus supplement thereto. 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 the related
prospectus or in a prospectus supplement thereto.
D-1
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities beneficially owned by it and
listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the
Shelf Registration Statement. The undersigned, by signing and returning this
Notice and Questionnaire, understands that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Purchase Agreement.
Pursuant to the Purchase Agreement, the undersigned has agreed to
indemnify and hold harmless the directors and officers of the Company and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act, from and against certain losses arising in connection with
statements concerning the undersigned made in the Shelf Registration Statement
and the related prospectus (the "Prospectus") in reliance upon the information
provided in this Notice and Questionnaire.
The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
1. (a) Full Legal Name of Selling Securityholder:
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(b) Full Legal Name of Registered Holder (if not the same as
(a) above) through which Registrable Securities listed
in Item 3 below are held:
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(c) Full Legal Name of The Depository Trust Company
Participant (if applicable and if not the same as (b)
above) through which Registrable Securities listed in
Item 3 below are held:
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2. Address for Notices to Selling Securityholder:
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Telephone:
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Fax:
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Contact Person:
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3. Beneficial Ownership of Registrable Securities:
(a) Type and Principal Amount of Registrable Securities
beneficially owned:
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(b) CUSIP No(s). of such Registrable Securities beneficially
owned:
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4. Indicate below if the undersigned is (a) a broker-dealer or (b) an
affiliate of a broker-dealer:
Except as set forth below, if the undersigned is an
affiliate of a broker-dealer, the undersigned represents
and warrants that it bought the Registrable Securities
in the ordinary course of business and at the time of
the purchase had no agreements or understandings,
directly or indirectly, with any person to distribute
the Registrable Securities.
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If you are (a) a broker-dealer or (b) an affiliate of a
broker-dealer who did not buy Registrable Securities in
the ordinary course of business and at the time of your
purchase had an agreement or understanding, directly or
indirectly, with any person to distribute the
Registrable Securities, then you will be identified as
an underwriter in the Shelf Registration Statement.
5. Beneficial Ownership of Company securities owned by the Selling
Securityholder:
Except as set forth below in this Item 5, the
undersigned is not the beneficial or registered owner of
any securities of the Company other than the Registrable
Securities listed above in Item 3.
(a) Type and Amount of Other Securities beneficially owned
by the Selling Securityholder.
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(b) CUSIP No(s). of such Other Securities beneficially
owned:
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6. Relationship with the Company:
Except as set forth below, neither the undersigned nor
any of its affiliates, 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:
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7. Plan of Distribution:
Except as set forth below, the undersigned (including
its donees or pledgees) intends to distribute the
Registrable Securities listed above in Item 3 pursuant
to the Shelf Registration Statement 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
or broker-dealers or agents. If the Registrable
Securities are sold through underwriters or
broker-dealers or agents, the Selling Securityholder
will be responsible for underwriting discounts or
commissions or agent's commissions. 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 Registrable 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 undersigned 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 the
hedging positions they assume. The undersigned 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:
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NOTE: In no event may such method(s) of distribution take the form
of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.
By signing below, the Selling Securityholder acknowledges that it
understands its obligations to comply, and agrees that it will comply, with the
prospectus delivery and other provisions of the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
respective rules and regulations thereunder, particularly Regulation M, in
connection with any offering of Registrable Securities pursuant to the Shelf
Registration Statement. The undersigned Selling Securityholder agrees that
neither it nor any person acting on its behalf will engage in any transaction in
violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Purchase Agreement to indemnify and hold harmless certain persons set forth
therein.
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 Company and to notify the transferee(s) at the time of the
transfer of its rights and obligations under this Notice and Questionnaire and
the Purchase Agreement. By signing below, the Selling Securityholder consents to
the disclosure of the information contained herein in its answers to items (1)
through (7) above and the inclusion of such information in the Shelf
Registration Statement and the related Prospectus or in a prospectus supplement
thereto. 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 the related Prospectus or in a prospectus supplement
thereto.
IN ACCORDANCE WITH THE SELLING SECURITYHOLDER'S OBLIGATION UNDER THE
PURCHASE 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 UNTIL SUCH TIME AS
THE COMPANY IS NO LONGER REQUIRED TO MAINTAIN THE EFFECTIVENESS OF THE SHELF
REGISTRATION STATEMENT. ALL NOTICES HEREUNDER AND PURSUANT TO THE PURCHASE
AGREEMENT SHALL BE MADE IN WRITING BY HAND DELIVERY, FIRST-CLASS MAIL OR AIR
COURIER GUARANTEEING OVERNIGHT DELIVERY AS FOLLOWS:
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To the Company:
Vector Group Ltd.
000 X.X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Chief Financial Officer
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, 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 Securityholders 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.
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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:
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Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable Securities)
By:
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Name:
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Title:
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