EXHIBIT 2
PANACO, INC.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
August 21, 2000
High River Limited Partnership
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Gentlemen:
You have advised us that High River Limited Partnership ("High River") is
entering into an agreement (the "Agreement") with New Valley Corporation ("New
Valley") pursuant to which High River is purchasing from New Valley 1,960,479
shares of common stock of Panaco, Inc. ("Panaco") at $1.73 per share (the
"Transaction").
In connection with the Transaction, Panaco hereby represents, acknowledges and
agrees as follows:
(i) that Xx. Xxxxxxx Xxxxxx resigned from the board of
directors of Panaco, and effective August 21, 2000, Xx.
Xxxxxx Xxxxxx has been elected to the board to fill the
seat vacated by Xx. Xxxxxx, all in accordance with
applicable law and the By-Laws of Panaco and pursuant to
appropriate corporate action duly reflected in the
corporate records of Panaco;
(ii) that the assignment by New Valley to High River of all of
New Valley's rights under (x) that certain Registration
Rights Agreement dated as of July, 1997 (the
"Registration Rights Agreement"), among Panaco, Xxxx X.
Xxxxxx ("Xxxxxx") and Xxxxxxx X. Xxxxxxxxx, Xx., and (y)
the acknowledgement set forth on the signature page of the
Stock Purchase Agreement dated January 25, 1999 between
Xxxxxx and New Valley, are consented and agreed to by
Panaco; and
(iii) that the transfer of the shares from New Valley to High
River is in compliance with applicable securities laws and
that Panaco shall instruct its transfer agent to transfer
to High River the shares of Panaco stock owned by New
Valley.
High River agrees that, at the request of Panaco, High River shall purchase in
place of or from Panaco all 10-5/8% Senior Notes due 2004 required to be
purchased (the "Required
Purchase") by Panaco pursuant to Section 4.15 of the Indenture, dated as of
October 9, 1997, among Panaco and UBM Bank, N.A., as the Trustee (Section 4.15
of which is triggered by High River's acquisition of Panaco's common stock
pursuant to the Agreement). Such purchase shall be made only on the date of the
Required Purchase as specified in such Indenture or on a date specified by
Panaco which shall not be more than ten (10) days from the date of the Required
Purchase.
Agreed and Accepted:
PANACO, INC.
By: __________________________
Name:
Title:
HIGH RIVER LIMITED PARTNERSHIP
By: Riverdale LLC, its general partner
By: __________________________
Name: Xxxxxx Xxxxxxxx
Title: Manager
[Agreement regarding transfer of stock from New Valley and related
Note Purchase Obligation.]
