<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
PANACO, INC.
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(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
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(Title of Class of Securities)
698106 10 1
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(CUSIP NUMBER)
RICHARD J. LAMPEN
EXECUTIVE VICE PRESIDENT & GENERAL COUNSEL
NEW VALLEY CORPORATION
100 S.E. SECOND STREET, 32ND FLOOR
MIAMI, FL 33131
(305) 579-8000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 25, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d.1(g), check
the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 21
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CUSIP NO. 698106 10 1 PAGE 2 OF 21 PAGES
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Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
New Valley Corporation
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3 SEC Use Only
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4 Source of Funds (See Instructions) WC
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5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
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6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
2,118,479
---------------------------------------------------
8 Shared Voting Power
Number of Shares
Beneficially Owned by - 0 -
Each Reporting Person ---------------------------------------------------
With 9 Sole Dispositive Power
2,118,479
---------------------------------------------------
10 Shared Dispositive Power
- 0 -
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,118,479
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12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
[ ]
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13 Percent of Class Represented by Amount in Row (11)
8.88%
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14 Type of Reporting Person (See Instructions) CO
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CUSIP NO. 698106 10 1 PAGE 3 OF 21 PAGES
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Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
New Valley Holdings, Inc.
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3 SEC Use Only
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4 Source of Funds (See Instructions) N/A
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5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
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6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
-0-
---------------------------------------------------
8 Shared Voting Power
Number of Shares
Beneficially Owned by -0-
Each Reporting Person ---------------------------------------------------
With 9 Sole Dispositive Power
-0-
---------------------------------------------------
10 Shared Dispositive Power
-0-
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
-0-
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12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
[X]
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13 Percent of Class Represented by Amount in Row (11)
0%
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14 Type of Reporting Person (See Instructions) CO; HC
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CUSIP NO. 698106 10 1 PAGE 4 OF 21 PAGES
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Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
BGLS INC.
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3 SEC Use Only
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4 Source of Funds (See Instructions) N/A
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5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
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6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
-0-
---------------------------------------------------
8 Shared Voting Power
Number of Shares
Beneficially Owned by -0-
Each Reporting Person ---------------------------------------------------
With 9 Sole Dispositive Power
-0-
---------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
-0-
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
[X]
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13 Percent of Class Represented by Amount in Row (11)
0%
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14 Type of Reporting Person (See Instructions) CO; HC
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CUSIP NO. 698106 10 1 PAGE 5 OF 21 PAGES
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Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
BROOKE GROUP LTD.
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3 SEC Use Only
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4 Source of Funds (See Instructions) N/A
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5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
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6 Citizenship or Place of Organization
Delaware
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7 Sole Voting Power
-0-
---------------------------------------------------
8 Shared Voting Power
Number of Shares
Beneficially Owned by -0-
Each Reporting Person ---------------------------------------------------
With 9 Sole Dispositive Power
-0-
---------------------------------------------------
10 Shared Dispositive Power
-0-
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
-0-
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12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
[X]
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13 Percent of Class Represented by Amount in Row (11)
0%
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14 Type of Reporting Person (See Instructions) CO; HC
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<PAGE> 6
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CUSIP NO. 698106 10 1 PAGE 6 OF 21 PAGES
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Name of Reporting Person
1 S.S. or I.R.S. Identification No. of Above Person
BENNETT S. LEBOW
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [X]
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3 SEC Use Only
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4 Source of Funds (See Instructions) N/A
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5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
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6 Citizenship or Place of Organization
United States
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7 Sole Voting Power
-0-
---------------------------------------------------
8 Shared Voting Power
Number of Shares
Beneficially Owned by -0-
Each Reporting Person ---------------------------------------------------
With 9 Sole Dispositive Power
-0-
---------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
-0-
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
[X]
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13 Percent of Class Represented by Amount in Row (11)
0%
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14 Type of Reporting Person (See Instructions) IN
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ITEM 1. SECURITY AND ISSUER.
This Schedule relates to the Common Stock, par value $.01 per share
("Common Stock"), of PANACO, INC., a Delaware corporation (the "Company"). The
address of the principal executive offices of the Company is: 1100 Louisiana
Street, Suite 5100, Houston, Texas 77002, (713) 970-3100.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Schedule is being filed by the following persons:
(i) New Valley Corporation ("New Valley"), a Delaware corporation
in which New Valley Holdings, Inc. ("N.V. Holdings") holds
approximately 41.5% of the common stock and approximately
57.7% of the Class A Preferred Stock and in which BGLS Inc.
("BGLS") holds approximately 9.0% of the Class B Preferred
Stock and approximately 0.2% of the common stock;
(ii) N.V. Holdings, a Delaware corporation, which is a wholly-owned
subsidiary of BGLS;
(iii) BGLS, a Delaware corporation, which is a wholly-owned
subsidiary of Brooke Group Ltd. ("BGL");
(iv) BGL, a Delaware corporation, in which Bennett S. LeBow is the
direct or indirect owner of 43.1% of the common stock; and
(v) Bennett S. LeBow.
Each of the persons listed in (i) to (v) above is hereinafter referred
to individually as a "Reporting Person" and collectively as the "Reporting
Persons". The Reporting Persons collectively may be deemed to be a group
beneficially owning, in the aggregate, 2,118,479 shares of Common Stock
(collectively, the "Securities") or approximately 8.88% of the outstanding
shares of the Common Stock within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Act").
The filing of this Schedule shall not be construed as an admission that
any Reporting Person is, for purposes of Section 13(d) or 13(g) of the Act, the
beneficial owner of any securities covered by this Schedule except for the
securities stated herein to be beneficially owned by such Reporting Person or
that the Reporting Persons are acting as a group within the meaning of Section
13(d)(3) of the Act.
(b),(c) New Valley is engaged, through Ladenburg Thalmann & Co. Inc.,
in the investment banking and brokerage business; through BrookeMil Ltd. and
Western Realty Development LLC, in real estate development in Russia; through
its New Valley Realty division, in the ownership and management of commercial
real estate in the United States; through its 73% interest in Thinking Machines
Corporation, in the computer software business; and in the acquisition of
operating companies.
BGL is a holding company for a number of businesses. BGL is principally
engaged, through its subsidiary Liggett Group Inc., in the manufacture and sale
of cigarettes in the United States; through its subsidiary Brooke (Overseas)
Ltd., in the manufacture and sale of cigarettes in Russia; and
Page 7 of 21 Pages
<PAGE> 8
through its investment in New Valley, in the investment banking and brokerage
business, in real estate development in Russia, in the ownership and management
of commercial real estate in the United States, in the computer software
business, and in the acquisition of operating companies. BGLS is a holding
company for various businesses of BGL, including N.V. Holdings which holds an
approximate 57.7% interest in New Valley's senior preferred shares and an
approximate 42% voting interest in New Valley. Mr. LeBow is the Chairman of the
Board, President and Chief Executive Officer of BGL, BGLS and N.V. Holdings and
Chairman of the Board and Chief Executive Officer of New Valley, and holds
various positions with BGL's subsidiary companies. A list of directors and
executive officers of each of BGL, BGLS, N.V. Holdings and New Valley is
attached hereto as Exhibit A. The principal business address and the principal
office address of each of BGL, BGLS and New Valley and, except as otherwise
indicated, their respective directors and executive officers and the business
address of Mr. LeBow is 100 S.E. Second Street, Miami, Florida 33131. The
principal business address and principal office address of N.V. Holdings and,
except as otherwise indicated, its directors and executive officers is 204 Plaza
Centre, 3505 Silverside Road, Wilmington, Delaware 19810.
(d),(e) None of the Reporting Persons and, to the best
knowledge of the Reporting Persons, none of the persons listed in Schedule A,
during the last five years, (1) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or (2) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Mr. LeBow is a citizen of the United States of America,
and, to the best knowledge of the Reporting Persons, each of the persons named
in Schedule A is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The aggregate purchase price for the Securities acquired by New Valley,
including shares acquired by its wholly-owned subsidiary Alki Holdings II, Inc.,
a Delaware corporation, was approximately $3,885,000. These Securities were
purchased with New Valley's working capital.
ITEM 4. PURPOSE OF TRANSACTIONS.
On January 25, 1999, New Valley and Mark C. Licata ("Licata") entered
into a Stock Purchase Agreement, a copy of which is attached hereto as Exhibit B
and is incorporated herein by reference (the "Agreement"), pursuant to which,
among other things, New Valley purchased 1,612,229 shares of Common Stock (the
"Purchased Shares") from Licata for an aggregate purchase price of $1,860,000.
In connection with the transactions contemplated by the Agreement: (i) Licata
resigned from the Board of Directors of the Issuer; (ii) the Issuer agreed, upon
the request of New Valley, to cause a person recommended by New Valley to be
elected to the Board of Directors of the Issuer to fill the Board seat vacated
by Licata; and (iii) the Issuer (a) acknowledged the assignment by Licata to New
Valley of all of Licata's rights under that certain Registration Rights
Agreement dated as of July 30, 1997, by and between the Company, Licata and
Leonard C. Tallerine, Jr. and (b) granted certain additional registration rights
with respect to the Purchased Shares to New Valley. At the request of New
Valley, Richard J. Lampen, Executive Vice President and a director of New
Valley, has been elected to the Issuer's Board.
Page 8 of 21 Pages
<PAGE> 9
New Valley acquired the Securities because, in its opinion, such
Securities are undervalued by the market at the present time. The Reporting
Persons will monitor developments at the Company on a continuing basis, and may
communicate with members of management of the Company, with other shareholders
or potential shareholders of the Company, concerning matters relating to the
Company.
Any of the Reporting Persons may acquire additional shares of Common
Stock or other securities of the Company (subject to availability at prices
deemed favorable) in the open market, in privately negotiated transactions or
otherwise. Alternatively, each Reporting Person reserves the right to dispose or
cause the disposal of some or all of the Securities in the open market, in
privately negotiated transactions or otherwise. In addition, each Reporting
Person may purchase or sell options on securities of the Company and may have a
short position in such securities. The possible activities of the Reporting
Persons are subject to change at any time.
Except as set forth in this Item 4, none of the Reporting Persons has
any present plans or proposals which relate or would result in any of the
matters set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date hereof, the Reporting Persons may be deemed to be
acting as a group, within the meaning of Section 13(d)(3) of the Act,
beneficially owning, in the aggregate, 2,118,479 shares of Common Stock of the
Company, which constituted approximately 8.88% of the 23,844,863 shares of
Common Stock outstanding as of September 30, 1998 (as reported in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998).
(b) With respect to the 2,118,479 shares of Common Stock acquired by
New Valley, New Valley exercises both sole voting power and sole dispositive
power. Since Mr. LeBow is the direct or indirect owner of 43.1% of the common
stock of BGL, which in turn controls BGLS, which in turn controls N.V. Holdings,
which in turn holds an approximate 57.7% interest in New Valley's senior
preferred shares and an approximate 42% voting interest in New Valley, each of
these Reporting Persons may be deemed to exercise both voting power and
dispositive power with respect to such shares.
Under the definition of "beneficial ownership" in Rule 13d-3
promulgated under the Act, each of the Reporting Persons may be deemed to
beneficially own the Securities owned by each other Reporting Person since Mr.
LeBow is the direct or indirect owner of 43.1% of the common stock of BGL, which
in turn owns 100% of the capital stock of BGLS, which in turn owns 100% of the
capital stock of N.V. Holdings, which in turn holds an approximate 57.7%
interest in New Valley's senior preferred shares and an approximate 42% voting
interest in New Valley. The filing of this Schedule and the disclosure of this
information shall not be construed as an admission that any of the Reporting
Persons other than New Valley is the beneficial owner of any of the Securities
owned by New Valley either for purposes of Section 13(d) of the Act or for any
other purpose, and such beneficial ownership is expressly disclaimed. Under the
definition of "beneficial ownership," it is also possible that members of the
Board of Directors of New Valley (including Mr. LeBow), in their capacities as
such, might be deemed to be beneficial owners of the Securities and share the
voting and dispositive powers with regard to the Securities. Neither the filing
of this Schedule nor any of its contents shall be construed as an admission that
the directors of New Valley are beneficial owners of any of the Securities,
either for purposes of Section 13(d) of the Act or for any other purpose, and
such beneficial ownership is expressly disclaimed.
Page 9 of 21 Pages
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(c) On January 25, 1999, New Valley purchased 1,612,229 shares
of Common Stock from Mark C. Licata for $1,860,000. See Item 4. None of the
Reporting Persons has effected any other transactions in the Common Stock in the
past 60 days.
(d) No persons other than New Valley have the right to receive
or power to direct the receipt of dividends from, or the proceeds from the sale
of, the Securities.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The first paragraph set forth under Item 4 of this Schedule is
incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following documents are attached as exhibits to this Schedule. Such
documents are summarized in this Schedule, but the summaries are not complete
and are qualified in their entirety by reference to the entire documents
attached hereto.
Exhibit A: Executive Officers and Directors of the Reporting Persons.
Exhibit B: Stock Purchase Agreement dated as of January 25, 1999 by and
between New Valley and Mark C. Licata.
Exhibit C: Joint Filing Agreement among the Reporting Persons.
Page 10 of 21 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 3, 1999
NEW VALLEY CORPORATION
By: /s/ Richard J. Lampen
--------------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
NEW VALLEY HOLDINGS, INC.
By: /s/ Richard J. Lampen
--------------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BGLS INC.
By: /s/ Richard J. Lampen
--------------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BROOKE GROUP LTD.
By: /s/ Richard J. Lampen
--------------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
/s/ Bennett S. Lebow
--------------------------------------
Bennett S. LeBow
Page 11 of 21 Pages
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EXHIBIT A
EXECUTIVE OFFICERS AND DIRECTORS OF THE REPORTING PERSONS:
The names, present principal occupations or employment and business
addresses of the executive officers and directors of each of the Reporting
Persons are set forth below. If no address is given, the executive officer's or
director's business address is that of the Reporting Person. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to the
Reporting Person.
BROOKE GROUP LTD.:
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<TABLE>
<CAPTION>
NAME: PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; BUSINESS ADDRESS:
- ----- -------------------------------------------------------------
<S> <C>
Bennett S. LeBow Chairman of the Board, President and Chief Executive Officer
Richard J. Lampen Executive Vice President
Joselynn D. Van Siclen Vice President, Chief Financial Officer and Treasurer
Marc N. Bell Vice President, Secretary and General Counsel
Robert J. Eide Director; Secretary and Treasurer, Aegis Capital Corp. (a registered broker
dealer), 70 E. Sunrise Hwy., Valley Stream, NY 11581
Jeffrey S. Podell Director; Chairman of the Board and President, Newsote, Inc. (a privately-held
holding company), 26 Jefferson St., Passaic, NJ 07055
Jean E. Sharpe Director; Private Investor, 462 Haines Road, Mt. Kisco, NY 10549
BGLS INC.:
- ----------
NAME: PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; BUSINESS ADDRESS:
- ----- -------------------------------------------------------------
Bennett S. LeBow Chairman of the Board, President and Chief Executive Officer
Richard J. Lampen Executive Vice President
Joselynn D. Van Siclen Vice President, Treasurer and Chief Financial Officer
Marc N. Bell Vice President, Secretary and General Counsel
Robert J. Eide Director; Secretary and Treasurer, Aegis Capital Corp., 70 E. Sunrise Hwy.,
Valley Stream, NY 11581
Jeffrey S. Podell Director; Chairman of the Board and President, Newsote, Inc., 26 Jefferson St.,
Passaic, NJ 07055
Jean E. Sharpe Director; Private Investor, 462 Haines Road, Mt. Kisco, NY 10549
</TABLE>
Page 12 of 21 Pages
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<TABLE>
<S> <C>
NEW VALLEY HOLDINGS, INC.:
- --------------------------
NAME: PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; BUSINESS ADDRESS:
- ----- -------------------------------------------------------------
Bennett S. LeBow Chairman of the Board, President and Chief Executive Officer
Richard J. Lampen Executive Vice President
Joselynn D. Van Siclen Vice President, Treasurer and Chief Financial Officer
Marc N. Bell Vice President, Secretary and General Counsel
Robert J. Eide Director; Secretary and Treasurer, Aegis Capital Corp., 70 E. Sunrise Hwy.,
Valley Stream, NY 11581
Jeffrey S. Podell Director; Chairman of the Board and President, Newsote, Inc., 26 Jefferson St.,
Passaic, NJ 07055
NEW VALLEY CORPORATION:
- -----------------------
NAME: PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; BUSINESS ADDRESS:
- ----- -------------------------------------------------------------
Bennett S. LeBow Chairman of the Board and Chief Executive Officer
Howard M. Lorber Director, President and Chief Operating Officer
Richard J. Lampen Director, Executive Vice President and General Counsel
J. Bryant Kirkland III Vice President, Treasurer and Chief Financial Officer
Marc N. Bell Vice President, Secretary and Associate General Counsel
Henry C. Beinstein Director; Executive Director, Schulte Roth & Zabel LLP (a law firm), 900 Third
Avenue, New York, NY 10022
Arnold I. Burns Director; Managing Director, Arnhold and S. Bleichroeder, Inc. (an investment
bank), 1345 Avenue of the Americas, New York, NY 10105
Ronald J. Kramer Director; Chairman and Chief Executive Officer of Ladenburg Thalmann Group Inc. (an
investment bank), 590 Madison Avenue, New York, NY 10022
Barry W. Ridings Director; Managing Director, BT Alex. Brown Incorporated (an investment bank), 1290
Avenue of the Americas, 10th Floor, New York, NY 10104
</TABLE>
Page 13 of 21 Pages
<PAGE> 14
EXHIBIT B
STOCK PURCHASE AGREEMENT
This Agreement dated as of January 25, 1999 is by and between
MARK C. LICATA ("Seller"), and NEW VALLEY CORPORATION, a Delaware corporation
("Purchaser").
WHEREAS, Seller is the owner of 1,612,229 shares of Common
Stock, $.01 par value per share ("Panaco Common Stock"), of Panaco, Inc., a
Delaware corporation ("Panaco");
WHEREAS, Seller desires to sell 1,612,229 shares of Panaco
Common Stock (the "Panaco Shares") to Purchaser and Purchaser desires to
purchase the Panaco Shares from Seller, subject to the provisions contained
herein;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained in this Agreement, and intending to be legally bound by the
terms and conditions of this Agreement, the parties hereto hereby agree as
follows:
1. SALE OF PANACO SHARES TO PURCHASER.
1.1. SALE AND PURCHASE OF PANACO SHARES. Subject to the terms
and conditions of this Agreement, at the Closing, Seller shall sell, transfer,
assign, convey and deliver to Purchaser and Purchaser shall purchase, accept and
acquire from Seller, the Panaco Shares, in consideration of the payment by
Purchaser to Seller of an aggregate purchase price of $1,860,000.00 (the
"Purchase Price"), payable as set forth in Section 2 of this Agreement.
2. THE CLOSING.
2.1. THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Panaco,
1100 Louisiana, Suite 5100, Houston, Texas 77002-5220, at 10:00 a.m. on January
25, 1999 (the "Closing Date"), or at such other time, date, and place as are
mutually agreeable to Seller and Purchaser. At the Closing, (A) Seller will
deliver to Purchaser the certificates representing the Panaco Shares accompanied
by stock transfer powers duly endorsed in blank and (B) Purchaser shall make
payment of the Purchase Price to Seller. The Purchase Price shall be paid by
Purchaser to Seller by wire transfer.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. In connection with
the purchase of the Panaco Shares, Seller hereby represents and warrants to
Purchaser as follows:
3.1. TITLE TO PANACO SHARES. Seller has good legal title to
the Panaco Shares, and has the full legal right, power and authority to sell,
assign and transfer complete ownership in the Panaco Shares to Purchaser, free
and clear of all liens, claims, restrictions, encumbrances, charges, options or
rights of third parties with respect thereto. The Panaco Shares are all of the
shares of Panaco Common Stock owned by Seller.
3.2 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon any arrangement
made by or on behalf of Seller.
Page 14 of 21 Pages
<PAGE> 15
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser represents and warrants to Seller as follows:
4.1 AUTHORITY, ETC. Purchaser has the legal capacity to enter
into and perform this Agreement. This Agreement constitutes the valid and
binding obligation of Purchaser enforceable in accordance with its terms.
Purchaser is not currently insolvent nor will the acquisition of the Panaco
Shares in the manner contemplated herein render Purchaser insolvent. All
consents, authorizations and approvals (if any) required to be obtained in order
to enable Purchaser to execute, deliver and perform this Agreement have been
duly obtained. The execution, delivery and performance of this Agreement by
Purchaser will not violate or be in conflict with any provision of its
organizational documents, any material agreement or instrument to which it is a
party or by which it is bound or any judgment, decree, order, statute, rule or
regulation applicable to it.
4.2 INDEPENDENT DUE DILIGENCE INVESTIGATION. Purchaser has
relied solely upon the independent investigations made by it and its
representatives in making a decision to purchase the Panaco Shares and has a
full understanding and appreciation of the risks inherent in such a highly
speculative investment. In connection with such investigation, Purchaser and its
representatives and advisers, if any, (i) have been given an opportunity to ask,
and have to the extent Purchaser considered necessary, asked questions of, and
have received answers from, officers of Panaco concerning the Panaco Shares and
the affairs of Panaco and (ii) have been given or afforded access to all
documents, records, books and additional information which Purchaser has
requested regarding such matters.
4.3 INVESTMENT INTENT. Purchaser recognizes that the Panaco
Shares are restricted shares. Purchaser is acquiring the Panaco Shares solely
for its own account for investment and not with a view to, or for offer or
resale in connection with, a distribution thereof in violation of any applicable
federal or state securities laws.
4.4 STATUS OF PURCHASER. Purchaser represents and warrants to
Seller that it has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Panaco Shares; it is an "accredited investor" as defined in Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the "Securities
Act"); and it understands that the Panaco Shares are being sold to it in a
transaction that is intended to qualify for an exemption from the registration
requirements of the Securities Act which depends upon Purchaser's investment
intent in purchasing the Panaco Shares. Purchaser is not aware of any facts or
circumstances that would cause the sale of Panaco Shares contemplated by this
Agreement to fail to be exempt from registration under the Securities Act.
4.5 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon any arrangement
made by or on behalf of Purchaser.
5. CONDITIONS TO THE OBLIGATIONS OF SELLER.
The obligations of Seller under this Agreement are subject to
the fulfillment, or the advance waiver in writing by Seller, of the conditions
set forth in this Section 5 on or before the Closing Date.
Page 15 of 21 Pages
<PAGE> 16
5.1 OPINION OF COUNSEL OF PANACO. Counsel for Panaco shall
have delivered to Seller its opinion, in a form reasonably satisfactory to
Seller, that (i) the sale of the Panaco Shares to Purchaser pursuant to this
Agreement without compliance with Rule 144 promulgated under the Securities Act
does not violate any applicable securities laws and (ii) the 6,083 shares of
Panaco Stock represented by Certificate Number PA 6806 dated December 1, 1998
were issued to Seller in a transaction exempt from Section 16(b) ("Section
16(b)") of the Securities Exchange Act of 1934, as amended, so that such
issuance is not a purchase or sale by Seller, within the meaning of Section
16(b), within six months of the sale of the Panaco Shares contemplated by this
Agreement.
6. CONDITIONS TO THE OBLIGATIONS OF PURCHASER.
The obligations of Purchaser under this Agreement are subject
to the fulfillment, or the waiver in writing by Purchaser, of the conditions set
forth in this Section 5 on or before the Closing Date.
6.1 RESIGNATION OF SELLER. Seller shall have resigned from the
Board of Directors of Panaco.
6.2 ELECTION OF PURCHASER DESIGNEE. If requested by Purchaser
prior to the Closing, a person recommended by Purchaser shall have been elected
to the Board of Directors of Panaco to fill the seat vacated by Seller.
6.3 ASSIGNMENT OF REGISTRATION RIGHTS AGREEMENT. Panaco shall
have acknowledged in writing the assignment by Seller to Purchaser of all of
Seller's rights under that certain Registration Rights Agreement dated as of
July 30, 1997, by and between Panaco, Seller and Leonard C. Tallerine, Jr. (the
"Registration Rights Agreement").
6.4 BOARD APPROVAL. The Board of Directors of Panaco shall
have approved the assignment by Seller to Purchaser of all of Seller's rights
under the Registration Rights Agreement and the performance by Panaco of all of
its other obligations hereunder.
6.5 OPINION OF COUNSEL OF PANACO. Counsel for Panaco shall
have delivered to Purchaser its opinion, in a form reasonably satisfactory to
Purchaser, that the sale of the Panaco Shares to Purchaser pursuant to this
Agreement without compliance with Rule 144 promulgated under the Securities Act
does not violate any applicable securities laws.
7. INDEMNITY.
7.1 Purchaser shall defend, indemnify and save and hold
harmless Seller from and against all liabilities, losses, claims, demands,
suits, costs, expenses and damages of every kind and character, including,
without limitation, attorneys' fees, court costs, and costs of investigation,
which arise from or in connection with in any way a breach by Purchaser of its
representations and warranties contained in this Agreement or other breach of
this Agreement by Purchaser.
7.2 Seller shall defend, indemnify and save and hold harmless
Purchaser from and against all liabilities, losses, claims, demands, suits,
costs, expenses and damages of every kind and character, including, without
limitation, attorneys' fees, court costs, and costs of investigation, which
arise from or in connection with in any way a breach by Seller of its
representations and warranties contained in this Agreement or other breach of
this Agreement by Seller.
Page 16 of 21 Pages
<PAGE> 17
8. ASSIGNMENT OF REGISTRATION RIGHTS.
8.1 ASSIGNMENT. For good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, effective as of the
date hereof, Seller hereby assigns, delivers and sets over unto Purchaser (to
the extent permitted under the Registration Rights Agreement) all of Seller's
rights under the Registration Rights Agreement.
8.2 FURTHER ASSURANCES. Seller hereby agrees to take such
further action and execute and deliver such further documents and instruments as
may be reasonably required to perfect the assignment referred to in this Section
8.
9. MISCELLANEOUS.
9.1 ASSIGNMENT; SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon, and inure to the benefit of, the respective
successors, assigns, heirs, executors and administrators of the parties hereto.
This Agreement shall not be assignable, by operation of law or otherwise, by any
party without the prior written consent of the other parties to this Agreement.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
indemnities, covenants, representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Closing of the
transactions contemplated hereby.
9.3 EXPENSES. Except as otherwise expressly provided for
herein, each party to this Agreement shall bear its own costs and expenses,
including, but not limited to, attorneys' fees and expenses, in connection with
the closing of the transactions contemplated hereby.
9.4 NOTICES. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be delivered
by hand, by telecopier, by overnight mail or mailed by first class certified or
registered mail, return receipt requested, postage prepaid:
(a) If to Seller:
Mark C. Licata
1300 Post Oak Boulevard, Suite 2000
Houston, Texas 77056
Telecopy: (713) 986-7100
(or such other address as may have been furnished in writing by Seller to
Purchaser)
(b) If to Purchaser:
New Valley Corporation
100 S.E. Second Street
Miami, Florida 33131
Telecopy: (305) 579-8009
Attn: Howard M. Lorber, President
(or at such other address or addresses as may have been furnished to Seller in
writing by Purchaser)
Page 17 of 21 Pages
<PAGE> 18
Notices provided in accordance with this Section 9.4 shall
be deemed delivered upon personal delivery, receipt by telecopy or overnight
mail, or 48 hours after deposit in the mail in accordance with the above.
9.5 ENTIRE AGREEMENT. This Agreement, together with the
instruments and other documents contemplated to be executed and delivered in
connection herewith, contains the entire agreement and understanding of the
parties hereto, and supersedes any prior agreements or understandings between or
among them, with respect to the subject matter hereof.
9.6 AMENDMENTS AND WAIVERS. This Agreement may not be amended
or waived (either generally or in a particular instance and either retroactively
or prospectively) except by a written instrument signed by the party against
whom enforcement of such amendment, modification or waiver is sought. No waivers
of or exceptions to any term, condition or provision of this Agreement, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.
9.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8 CAPTIONS. The captions of the sections, subsections and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.
9.9 GOVERNING LAW. This Agreement shall be governed by and
interpreted and construed in accordance with the laws of the State of New York.
Page 18 of 21 Pages
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as an instrument as of the date first above written.
MARK C. LICATA
/s/ Mark C. Licata
--------------------------------------
NEW VALLEY CORPORATION
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
Page 19 of 21 Pages
<PAGE> 20
ACKNOWLEDGED:
Panaco, Inc. ("Panaco") hereby: (i) acknowledges the
assignment by Mark C. Licata ("Licata") to New Valley Corporation ("New Valley")
of all of Licata's rights under that certain Registration Rights Agreement dated
as of July 15, 1997 (the "Registration Rights Agreement"), by and between
Panaco, Licata and Leonard C. Tallerine, Jr. ("Tallerine"), as provided in
Section 8 hereof; (ii) confirms that the Registration Rights Agreement is valid
and in effect as of the date hereof; (iii) agrees that, notwithstanding any
provision to the contrary contained in Section 2(a) of the Registration Rights
Agreement, any request by either New Valley or High River Limited Partnership
("High River") for a Demand Registration (as defined in the Registration Rights
Agreement) shall not subject the other to the one-year waiting period provided
for in said Section 2(a), but, rather, New Valley shall only be subject to such
one-year waiting period in the event that a request for a Demand Registration is
made by New Valley, and High River shall only be subject to such one-year
waiting period in the event that a request for a Demand Registration is made by
High River; (iv) acknowledges that the sale by Licata to New Valley of the
shares of Panaco stock owned by Licata pursuant to the foregoing Agreement is in
compliance with all applicable securities laws and will not violate any
provisions of that certain Restated Merger Agreement dated as of July 1, 1997,
by, between and among Panaco, The Union Companies, Inc., Tallerine and Licata;
(v) agrees to instruct its transfer agent to transfer to New Valley the shares
of Panaco stock owned by Licata in accordance with the foregoing Agreement; (vi)
if Purchaser has not made the request prior to the Closing provided for in
Section 6.2 hereof, agrees following the Closing upon the request of Purchaser
to cause a person recommended by Purchaser to be elected to the Board of
Directors of Panaco to fill the seat vacated by Seller; and (vii) agrees that,
in addition to New Valley's rights under the Registration Rights Agreement,
promptly following the written request of New Valley, Panaco shall use its best
efforts to file and keep in effect a registration statement on Form S-3 or other
applicable form to register under the Securities Act the resale from time to
time by New Valley or its successors and assigns of some or all of the shares of
Panaco stock purchased by New Valley pursuant to the foregoing Agreement;
provided, however, that Panaco shall not be required to keep such registration
statement effective if New Valley receives an opinion of counsel to Panaco,
reasonably satisfactory to New Valley, that such shares of Panaco stock are
eligible for resale without restriction pursuant to Rule 144(k) under the
Securities Act or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission.
PANACO, INC.
By: /s/ Larry M. Wright
-----------------------------------
Name: Larry M. Wright
Title: Chairman
Page 20 of 21 Pages
<PAGE> 21
EXHIBIT C
JOINT FILING AGREEMENT
New Valley Corporation, New Valley Holdings, Inc., BGLS Inc., Brooke
Group Ltd. and Bennett S. LeBow, each hereby agrees, in accordance with Rule
13d-1(f) under the Securities Exchange Act of 1934, as amended, that the
Schedule 13D filed herewith, and any amendment thereto, relating to the shares
of Common Stock, $.01 par value per share, of PANACO, INC. are, and will be,
filed jointly on behalf of such person. In addition, each party to this
Agreement expressly authorizes each other party to this Agreement to file on its
behalf any and all amendments to such Schedule.
Date: February 3, 1999 NEW VALLEY CORPORATION
By: /s/ RICHARD J. LAMPEN
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
NEW VALLEY HOLDINGS, INC.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BGLS INC.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BROOKE GROUP LTD.
By: /s/ Richard J. Lampen
-----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
/s/ Bennett S. LeBow
-----------------------------------
Bennett S. LeBow
Page 21 of 21 Pages
