<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): OCTOBER 1, 1999
BROOKE GROUP LTD.*
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-5759 65-0949535
(Commission File Number) (I.R.S. Employer Identification No.)
100 S.E. SECOND STREET, MIAMI, FLORIDA 33131
(Address of principal executive offices) (Zip Code)
(305) 579-8000
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Page 1 of 4
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*Brooke Group Ltd. (the "Company"), a Delaware corporation which
changed its name on October 1, 1999 from "BGL Successor Inc." to "Brooke Group
Ltd.", is the successor of Brooke Group Holding Inc. (the "Predecessor"), a
Delaware corporation which was incorporated on March 4, 1980 and which changed
its name on October 1, 1999 from "Brooke Group Ltd." to "Brooke Group Holding
Inc."
ITEM 5. OTHER EVENTS.
On October 1, 1999, pursuant to Section 251(g) of the Delaware General
Corporation Law and the Agreement and Plan of Merger, dated as of September 30,
1999, by and among the Predecessor, the Company and BGL Merger Inc., an indirect
wholly-owned Delaware subsidiary of the Company ("BGL Merger"), BGL Merger,
merged (the "Merger") with and into the Predecessor, which was the surviving
corporation in the Merger, and BGL Merger ceased to exist. Pursuant to the
Merger, (i) each share of common stock, par value $.01 per share, of BGL Merger
issued and outstanding immediately prior to the effective time of the Merger
(the "Effective Time"), was converted into one share of common stock, par value
$.10 per share, of the Predecessor, (ii) each share of common stock, par value
$.10 per share, of the Predecessor issued and outstanding or held in its
treasury immediately prior to the Effective Time was converted into one share of
common stock, par value $.10 per share, of the Company (the "Company Common
Stock"), and (iii) each share of the Company Common Stock issued and outstanding
immediately prior to the Effective Time was canceled.
In connection with the Merger, BGLS Inc. ("BGLS"), a subsidiary of the
Predecessor, sold the stock of all of its direct wholly-owned subsidiaries,
other than Liggett Group Inc., to BGLS Holding Inc. ("BGLS Holding"), a Delaware
corporation which is a direct wholly-owned subsidiary of the Company. In
consideration for such shares, BGLS transferred and assigned to the Company, and
the Company assumed and agreed to perform and discharge, pursuant to a
supplemental indenture, all of BGLS' obligations under the Indenture dated as of
January 1, 1996 between BGLS and State Street Bank and Trust Company, as
Trustee, pursuant to which BGLS had issued its 15.75% Series B Senior Secured
Notes due 2001. In addition, BGLS Holding assumed all of BGLS' liability as plan
sponsor of three pension plans.
As a result of the Merger, all the business and operations previously
conducted by the Predecessor and its direct and indirect subsidiaries are now
conducted by the Company and its direct and indirect subsidiaries. The assets
and liabilities of the Company and its direct and indirect subsidiaries on a
consolidated basis are the same as the assets and liabilities of the Predecessor
and its direct and indirect subsidiaries immediately before the Merger. The
Certificate of Incorporation and the Bylaws of the Company immediately after the
Merger were identical to the Restated Certificate of Incorporation, as amended,
and the Amended and Restated Bylaws of the Predecessor as in effect immediately
prior to the Merger. The capital stock of the Company has the same designations,
rights and preferences as the capital stock of the Predecessor immediately prior
to the Merger. In addition, the persons who held offices as directors and
officers of the Predecessor prior to the Merger hold the same offices in the
Company after the Merger. The Company Common Stock is listed for trading on the
NYSE
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under the symbol "BGL", as was the common stock of the Predecessor. Stockholders
of the Predecessor do not recognize gain or loss for U.S. Federal income tax
purposes as a result of the Merger.
The conversion of shares in the Merger occurred without an exchange of
certificates. Accordingly, certificates formerly representing shares of common
stock of the Predecessor are deemed to represent shares of Company Common Stock.
Pursuant to Rule 12g-3 under the Securities Exchange Act of 1934
("Act"), the Company Common Stock will be deemed to be registered pursuant to
Section 12(b) of the Act.
ITEM 7. FINANCIAL STATEMENT AND EXHIBITS.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C> <C>
2.1 Agreement and Plan of Merger, dated as of September 30, 1999, by and among the
Predecessor, the Company and BGL Merger.
4.1 First Supplemental Indenture, dated as of September 30, 1999, to the Indenture,
dated as of January 1, 1996, between BGLS, BGLS Holding and State Street Bank and
Trust Company, as Trustee.
4.2 Amendment No. 1, dated as of September 30, 1999, to the Pledge and Security
Agreement, dated as of January 1, 1996, between BGLS Holding, the Predecessor, BGLS
and State Street Bank and Trust Company, as Trustee.
10.1 Purchase Agreement, dated as of September 30, 1999, between BGLS and BGLS
Holding.
99.1 Press Release of the Company dated October 1, 1999 announcing the Merger.
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BROOKE GROUP LTD.
By: /s/ Richard J. Lampen
------------------------------
Date: October 1, 1999 Richard J. Lampen
Executive Vice President
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
September 30, 1999, by and among BGL Merger Inc., a Delaware corporation ("BGL
Merger"), Brooke Group Ltd., a Delaware corporation ("BGL" or the "Surviving
Corporation"), and BGL Successor Inc., a Delaware corporation ("Holding
Company");
W I T N E S S E T H:
WHEREAS, BGL wishes to reorganize its corporate structure into a
holding company structure consisting of a publicly-traded holding company and
wholly-owned direct and indirect subsidiaries of such holding company; and
WHEREAS, in connection with this reorganization: (i) BGL has formed
Holding Company as a direct wholly-owned subsidiary of BGL; (ii) Holding Company
has formed BGLS Holding Inc., a Delaware corporation ("BGLS Holding"), as a
direct wholly-owned subsidiary of Holding Company; and (iii) BGLS Holding has
formed BGL Merger as a direct wholly-owned subsidiary of BGLS Holding; and
WHEREAS, BGL intends to merge with BGL Merger pursuant to Section
251(g) of the Delaware General Corporation Law (the "DGCL"), with BGL as the
survivor of such merger, and with stockholders of BGL receiving shares of
Holding Company in exchange for their shares in BGL; and
WHEREAS, as a result of such merger (the "Merger"), Holding Company
would become a publicly traded holding company, and BGL would become an indirect
wholly-owned subsidiary of Holding Company;
NOW, THEREFORE, in consideration and furtherance of the foregoing, the
parties hereto agree as follows:
ARTICLE I.
THE MERGER
SECTION 1.1 MERGER OF BGL MERGER WITH BGL. Pursuant to Section 251(g)
of the DGCL, and in accordance with and subject to the terms and conditions of
this Agreement, at the Effective Time (as hereinafter defined) the following
shall be deemed to occur simultaneously:
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(a) BGL shall merge with BGL Merger, with BGL to be the
surviving corporation of the Merger, such that as a result of the Merger, BGL
shall become an indirect wholly-owned subsidiary of Holding Company;
(b) In connection with the Merger, the name of the Surviving
Corporation shall become "Brooke Group Holding Inc.";
(c) The stockholders of BGL shall receive, in the manner set
forth in Article IV hereof, shares of capital stock of Holding Company in
exchange for their shares of capital stock of BGL, and as a result of such
exchange shall become stockholders of Holding Company;
(d) In connection with the Merger, the Certificate of
Incorporation of Holding Company shall be amended to change the name of the
Holding Company to "Brooke Group Ltd.";
(e) The separate existence of BGL Merger as a Delaware
corporation shall terminate, and at that time and to the fullest extent provided
under the laws of the State of Delaware: (i) the Surviving Corporation shall,
without further act or deed, possess all of the rights, privileges, powers and
franchises of public and private nature, and be subject to all of the
restrictions, disabilities and duties, of BGL Merger; (ii) the Surviving
Corporation shall, without further act or deed, be vested with all property,
real, personal and mixed, and all debts due to BGL Merger on whatever account;
(iii) all property, rights, privileges, powers and franchises, and all and every
other interest, of BGL Merger shall be the property of the Surviving
Corporation; (iv) all rights of creditors and all liens upon any property of BGL
Merger shall be preserved unimpaired, and all debts, liabilities and duties of
BGL Merger shall attach to the Surviving Corporation and may be enforced against
it to the same extent as if such debts, liabilities and duties had been incurred
or contracted by it; and (v) the Merger shall have all such other effects as set
forth in Section 259 of the DGCL;
(f) BGLS Holding, the sole stockholder of BGL Merger
immediately prior to the Effective Time, will receive, in the manner set forth
in Section 4.3 hereof, capital stock of the Surviving Corporation in exchange
for the capital stock of BGL Merger held by it; and
(g) The shares of Holding Company held by the Surviving
Corporation shall be canceled without payment of any consideration for such
cancellation.
SECTION 1.2 EFFECTIVE TIME. The Merger shall be effective for all
purposes at the time (the "Effective Time") (i) when all conditions precedent to
the Merger set forth in Sections 3.1 and 3.2 hereof have been satisfied and (ii)
when the Secretary or Assistant Secretary of the Surviving Corporation shall
have certified this Agreement in the manner required by Section 251(g) of the
DGCL and filed this Agreement as so certified with the Secretary of State of the
State of Delaware in accordance with Section 103 of the DGCL.
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ARTICLE II.
CONSTITUENT CORPORATIONS AND HOLDING COMPANY
SECTION 2.1 BGL.
(a) ORGANIZATION. BGL is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) CAPITALIZATION OF BGL. Immediately prior to the Effective
Time, BGL will have authorized capital consisting of:
(i) 100,000,000 shares of Common Stock, $.10 per
share par value; and
(ii) 10,000,000 shares of Preferred Stock, $1.00 per
share par value.
(c) STOCK OPTIONS AND PLANS. BGL has entered into, adopted or
is otherwise subject to certain agreements and arrangements, including warrants,
stock grants, options and rights, and compensation plans and agreements,
pursuant to which it is or may be obligated to issue additional shares of its
capital stock (all such warrants, stock grants, options, rights, and
compensation plans and agreements being referred to herein as the "Plans"). Each
of the Plans permits the Merger and the transactions contemplated by Section 4.2
hereof. Copies of the Plans have been provided to Holding Company.
SECTION 2.2 BGL MERGER.
(a) ORGANIZATION. BGL Merger is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
(b) CAPITALIZATION OF BGL MERGER. BGL Merger has authorized
capital consisting of 1,000 shares of Common Stock, $.01 per share par value,
1,000 shares of which have been issued and are outstanding. BGL Merger has no
options, warrants or other rights to purchase or convert any shares of its
Common Stock pursuant to which it is obligated to issue or sell additional
shares of its Common Stock.
(c) OWNERSHIP OF CAPITAL STOCK OF BGL MERGER. All of the
issued and outstanding shares of Common Stock of BGL Merger are owned by BGLS
Holding, a direct wholly-owned subsidiary of Holding Company.
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SECTION 2.3 HOLDING COMPANY.
(a) ORGANIZATION. Holding Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Certificate of Incorporation and Bylaws of Holding Company are,
and immediately prior to the Effective Time will be, identical to the Restated
Certificate of Incorporation, as amended, and the Amended and Restated Bylaws of
BGL as in effect immediately prior to the Merger, except for such variations as
are specifically required by and permitted pursuant to Section 251(g) of the
DGCL.
(b) CAPITALIZATION OF HOLDING COMPANY. Holding Company has
authorized capital consisting of:
(i) 100,000,000 shares of Common Stock, $.10 per
share par value, 1,000 of which shares are
issued and outstanding; and
(ii) 10,000,000 shares of Preferred Stock, $1.00 per
share par value, none of which shares are issued
and outstanding.
The Common Stock and the Preferred Stock of Holding Company have the same
designations, rights, powers and preferences, and the qualifications,
limitations and restrictions thereof, as the Common Stock and the Preferred
Stock of BGL immediately prior to the Effective Time. Holding Company has no
options, warrants or other rights to purchase or convert any shares of its
Common Stock pursuant to which it is obligated to issue or sell additional
shares of its Common Stock.
(c) OWNERSHIP OF CAPITAL STOCK OF HOLDING COMPANY. All of the
issued and outstanding shares of Common Stock of Holding Company are owned by
BGL.
ARTICLE III.
CONDITIONS PRECEDENT TO MERGER; TERMINATION OF AGREEMENT
SECTION 3.1 ACTION BY DIRECTORS. This Agreement shall be submitted for
approval by the respective Boards of Directors of each of BGL Merger and BGL as
required by Section 251(b) of the DGCL, and by the Board of Directors of the
Holding Company. As required by Section 251(g) of the DGCL, any approval of the
Merger by the Board of Directors of BGL shall include a determination by the
Board of Directors of BGL that the stockholders of BGL shall not recognize a
gain or loss for United States federal income tax purposes as a result of the
Merger.
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SECTION 3.2 ACTION BY STOCKHOLDERS. This Agreement has been approved by
BGLS Holding, the sole stockholder of BGL Merger, as required by Section 251(c)
of the DGCL. Pursuant to Section 251(g) of the DGCL, this Agreement is not
required to be approved by, and shall not be submitted for approval to, the
stockholders of BGL or of Holding Company.
SECTION 3.3 FILING OF CERTIFIED AGREEMENT. Upon satisfaction of all
conditions precedent set forth in Sections 3.1 and 3.2 hereof, the Secretary or
Assistant Secretary of the Surviving Corporation shall certify this Agreement in
the manner required by Section 251(g) of the DGCL and shall file this Agreement
as so certified with the Secretary of State of the State of Delaware in
accordance with Section 103 of the DGCL.
SECTION 3.4 EXPENSES. BGL shall bear all expenses associated with the
consummation of this Merger.
SECTION 3.5 TERMINATION. At any time prior to the Effective Time, this
Agreement may be terminated and the Merger abandoned by BGL by appropriate
resolution of BGL's Board of Directors.
ARTICLE IV.
CONVERSION OF SHARES OF CONSTITUENT CORPORATIONS
SECTION 4.1 CONVERSION OF OUTSTANDING SHARES OF COMMON STOCK OF BGL. At
the Effective Time, each share or fraction of a share of Common Stock of BGL
that is issued and outstanding or held in its treasury immediately prior to the
Effective Time shall, without further act or deed by BGL or its stockholders, be
converted into and exchanged for a share or equal fraction of a share of Common
Stock of Holding Company. Shares of Common Stock of Holding Company into which
shares of Common Stock of BGL are so converted shall be represented by stock
certificates previously representing shares of Common Stock of BGL.
SECTION 4.2 ASSUMPTION OF BGL OBLIGATIONS TO ISSUE CAPITAL STOCK.
Immediately prior to the Effective Time, BGL was a party to or subject to
certain agreements and arrangements, including warrants, stock grants, options
and rights, and compensation plans and agreements, pursuant to which parties
thereto or beneficiaries thereof acquired, or acquired certain rights to
acquire, shares of capital stock of BGL, including but not limited to the Plans.
As of the Effective Time, Holding Company shall adopt, assume and agree to be
bound by each and every Plan, and any right to acquire a share or fraction of a
share of capital stock of BGL under any such Plan shall, without further act or
deed by BGL or its stockholders, be converted into a right to acquire a share or
equal fraction of a share of capital stock of Holding Company pursuant to such
Plan.
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SECTION 4.3 SURRENDER AND CANCELLATION OF SHARES OF BGL MERGER. At the
Effective Time, each share of Common Stock of BGL Merger that is issued and
outstanding immediately prior to the Effective Time shall be converted into a
share of Common Stock of the Surviving Corporation and the certificate(s)
evidencing ownership of all issued and outstanding shares of Common Stock of BGL
Merger shall be surrendered to the Secretary of the Surviving Corporation in
exchange for shares of Common Stock of the Surviving Corporation into which they
are converted pursuant to this Section 4.3.
SECTION 4.4 SURRENDER AND CANCELLATION OF BGL'S SHARES IN HOLDING
COMPANY. At the Effective Time, BGL's 1,000 shares of Common Stock of Holding
Company owned immediately prior to the Effective Time shall be canceled without
payment of any consideration for such cancellation.
ARTICLE V.
OFFICERS AND DIRECTORS OF
HOLDING COMPANY AND SURVIVING CORPORATION
SECTION 5.1 HOLDING COMPANY. The officers and directors of BGL holding
office immediately prior to the Effective Time shall serve in the same
capacities as the officers and directors of the Holding Company until the next
annual meeting of stockholders of the Holding Company or until their successors
shall have been elected and qualified.
SECTION 5.2 SURVIVING CORPORATION. The officers of BGL holding office
immediately prior to the Effective Time shall serve in the same capacities as
officers of the Surviving Corporation and Bennett S. LeBow and Richard J. Lampen
shall serve as the sole directors of the Surviving Corporation until the next
annual meeting of stockholders or until their successors have been elected and
qualified.
ARTICLE VI.
ARTICLES OF INCORPORATION AND BYLAWS OF
HOLDING COMPANY AND SURVIVING CORPORATION
SECTION 6.1 HOLDING COMPANY. The Certificate of Incorporation and
Bylaws of Holding Company as in effect immediately prior to the Effective Time
shall be the Certificate of Incorporation and Bylaws of Holding Company
following the Merger, provided that the Certificate of Incorporation shall be
amended effective as of the Effective Time to change the name of Holding Company
to "Brooke Group Ltd.".
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SECTION 6.2 SURVIVING CORPORATION. The Restated Certificate of
Incorporation, as amended, and the Amended and Restated Bylaws of BGL as in
effect immediately prior to the Effective Time shall, pursuant to Section 251(g)
of the DGCL, be the Certificate of Incorporation and Bylaws of the Surviving
Corporation following the Merger; provided, however, that the Certificate of
Incorporation of the Surviving Corporation shall be amended as set forth below:
(i) Article FIRST shall be amended in its entirety as follows:
"FIRST. The name of the Corporation is Brooke Group
Holding Inc."
(ii) Article FOURTH shall be amended to read in its entirety
as follows:
"FOURTH. The total number of shares of all classes of
stock which the Corporation shall have the authority to issue is 1,000 shares of
Common Stock, $.10 par value per share."
(iii) Article TWELFTH shall be added and shall read as
follows:
"TWELFTH. Any act or transaction by or involving the
Corporation that requires for its adoption the approval of its stockholders
pursuant to the General Corporation Law of Delaware or the provisions of this
Certificate of Incorporation, shall pursuant to Section 251(g) of the General
Corporation Law of Delaware also require the approval of the stockholders of
Brooke Group Ltd. (and any successor by merger) by the same vote as is required
pursuant to the General Corporation Law of Delaware or the provisions of this
Certificate of Incorporation, as the case may be."
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IN WITNESS WHEREOF, each of BGL Merger, BGL and Holding Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the day and year first above written.
BROOKE GROUP LTD.
By: /s/ Joselynn D. Van Siclen
--------------------------------------
Joselynn D. Van Siclen
Vice President and Chief Financial Officer
BGL MERGER INC.
By: /s/ Richard J. Lampen
--------------------------------------
Richard J. Lampen
Executive Vice President
BGL SUCCESSOR INC.
By: /s/ Richard J. Lampen
--------------------------------------
Richard J. Lampen
Executive Vice President
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CERTIFICATE OF BROOKE GROUP LTD.
(UNDER SECTION 251 OF THE
GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE)
The undersigned, being Assistant Secretary of Brooke Group Ltd., a
corporation organized under the laws of the State of Delaware ("BGL"), hereby
states that the Agreement and Plan of Merger to which this Certificate is
attached, was adopted by BGL by action of its Board of Directors and without any
vote of its stockholders pursuant to subsection (g) of Section 251 of the
Delaware General Corporation Law (the "DGCL") and in accordance with such
subsection, the undersigned hereby certifies as follows:
1. The Agreement and Plan of Merger has been adopted pursuant to
subsection (g) of Section 251 of the DGCL; and
2. The conditions specified in the first sentence of subsection
(g) of Section 251 of the DGCL have been satisfied.
IN WITNESS WHEREOF, this certificate has been subscribed this 30th day
of September, 1999, by the undersigned who affirms that the statements made
herein are true under the penalties of perjury.
Brooke Group Ltd.
By: /s/ Richard J. Lampen
-------------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
and Assistant Secretary
<PAGE> 1
EXHIBIT 4.1
================================================================================
BGLS Inc.,
COMPANY
BGLS HOLDING INC.
SUCCESSOR
and
STATE STREET BANK AND TRUST COMPANY,
TRUSTEE
--------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of September 30, 1999
to
INDENTURE
Dated as of January 1, 1996
--------------------------------
$232,869,000
15.75% Series A Senior Secured Notes due 2001
15.75% Series B Senior Secured Notes due 2001
================================================================================
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE dated as of September 30, 1999 among BGLS
Holding Inc., a Delaware corporation (the "Successor") and the transferee of
assets of BGLS Inc., a Delaware corporation (the "Company"), and State Street
Bank and Trust Company, as successor to Fleet National Bank of Massachusetts, as
successor Trustee (the "Trustee"). Capitalized terms not otherwise defined
herein shall have the respective meanings specified in the Indenture (as
hereinafter defined).
RECITALS
WHEREAS, the Company and the Trustee have entered into the Indenture
dated as of January 1, 1996 (as previously or hereafter amended and supplemented
from time to time, and including the Exhibits thereto, the "Indenture"),
relating to the Company's 15.75% Series A Senior Secured Notes due 2001 and
15.75% Series B Senior Secured Notes due 2001; and
WHEREAS, contemporaneously with the execution of this Supplemental
Indenture, the Successor, a person controlled by Bennett S. LeBow, has acquired
by sale substantially all of the assets of the Company other than the Equity
Interests of Liggett; and
WHEREAS, Article Six of the Indenture permits such Disposition of
Assets, subject to the fulfillment of certain conditions, including the
assumption by the Successor of the obligations of the Company under the
Securities and the Indenture; and
WHEREAS, Article Six provides for the release of the Company from its
obligations under the Securities and the Indenture upon the assumption of such
obligations by a successor; and
WHEREAS, the Successor, the Company and the Trustee desire to enter
into this Supplemental Indenture to effect such assumptions and release; and
WHEREAS, Section 10.01(2) of the Indenture permits the amendment and
supplementation of the Securities and the Indenture without notice to or consent
of any Securityholder to comply with Article Six of the Indenture;
NOW, THEREFORE, the parties hereto agree as follows for the benefit of
each other party and for the equal and ratable benefit of the Holders:
SECTION 1. ASSUMPTION AND RELEASE.
The Successor hereby expressly assumes all the obligations of the
Company under the Securities and the Indenture. The Successor shall succeed to
and be substituted for and may exercise every right and power of the Company
with the same effect as if it had been named in the Securities and the Indenture
as the Company; all references in the Securities and the Indenture to the
Company shall be deemed to be references to the Successor. Upon such
<PAGE> 3
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assumption by the Successor of all of the obligations of the Company under the
Securities and the Indenture, the Company shall be released from such
obligations.
SECTION 2. GOVERNING LAW.
This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
SECTION 3. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
SECTION 4. SEVERABILITY.
In case any provision in this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and a
Holder shall have no claim therefor against any party hereto.
SECTION 5. EFFECTIVENESS.
This Supplemental Indenture shall become effective as of its date upon
its execution and delivery by each of the parties hereto.
SECTION 6. RATIFICATION.
This Supplemental Indenture is executed pursuant to Section 10.01(2) of
the Indenture, and the terms and conditions hereof shall be and shall be deemed
to be part of the terms and conditions of the Indenture for any and all
purposes. The Indenture, as supplemented by this Supplemental Indenture, is in
all respects hereby adopted, ratified and confirmed by the parties hereto.
SECTION 8. ACCEPTANCE OF TRUST.
The Trustee hereby accepts the trust in the Indenture declared and
provided, upon the terms and conditions set forth in the Indenture, as amended
by this Supplemental Indenture. The Trustee assumes no responsibility for the
correctness of the recitals herein and makes no representation and shall have no
responsibility as to the validity or the sufficiency of this Supplemental
Indenture or the due authorization and execution hereof by the Successor or the
Company.
<PAGE> 4
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be executed, and their respective corporate seals to
be hereunto affixed and attested, all as of the date first above written.
BGLS Inc.
By: /s/ Richard J. Lampen
---------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
[ Seal ]
Attest: /s/ Marc N. Bell
----------------------------
Secretary
BGLS HOLDING INC.
By: /s/ Richard J. Lampen
---------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
[ Seal ]
Attest: /s/ Marc N. Bell
----------------------------
Secretary
STATE STREET BANK AND TRUST
COMPANY,
as successor Trustee
By: /s/ Alison Dellabella
---------------------------------
Name: Alison DellaBella
Title: Assistant Vice President
[ Seal ]
Attest: /s/
----------------------------
Secretary
<PAGE> 1
EXHIBIT 4.2
AMENDMENT NO. 1 TO THE PLEDGE AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 TO THE PLEDGE AND SECURITY AGREEMENT DATED AS OF
JANUARY 1, 1996 (the "PLEDGE AGREEMENT") is entered into by and among BGLS
Holding Inc., a Delaware corporation ("BGLS HOLDING"), Brooke Group Holding
Inc., a Delaware corporation (formerly known as "Brooke Group Ltd.") ("BROOKE
HOLDING") and BGLS Inc., a Delaware corporation ("BGLS"), and State Street Bank
and Trust Company, as successor to Fleet National Bank of Massachusetts, as
successor trustee (the "TRUSTEE") under the Indenture dated as of January 1,
1996, pursuant to which BGLS has issued its 15.75% Series A Senior Secured Notes
due 2001 and its 15.75% Series B Senior Secured Notes due 2001 (each of which
series is equal to and ratable with the other series).
SECTION 1. AMENDMENTS. The parties hereto hereby amend the Pledge
Agreement as follows:
A. A new sentence is added immediately following the preamble to
read as follows:
As used herein the term "COMPANY" shall include (i) Brooke
Holding with respect to Collateral pledged by Brooke Holding and
(ii) BGLS Holding with respect to Collateral pledged by BGLS
Holding.
B. Section 1 of the Pledge Agreement is hereby amended by adding the
following defined terms in their appropriate alphabetical
locations:
"BGLS CONVERTIBLE SECURITIES" means any securities that are
convertible into or exchangeable for Equity Interests of BGLS.
"BGLS STOCK PURCHASE RIGHTS" means any options, warrants or
other rights to subscribe for or purchase or acquire any Equity
Interests of BGLS or any BGLS Convertible Securities.
"BROOKE HOLDING CONVERTIBLE SECURITIES" means any securities
that are convertible into or exchangeable for Equity Interests
of Brooke Holding.
"BROOKE HOLDING STOCK PURCHASE RIGHTS" means any options,
warrants or other rights to subscribe for or purchase or acquire
any Equity Interests of Brooke Holding or any Brooke Holding
Convertible Securities.
"INITIAL PLEDGED BGLS SHARES" means all Equity Interests of BGLS
represented by the certificates identified in Annex 1 hereto.
<PAGE> 2
"INITIAL PLEDGED BROOKE HOLDING SHARES" means all Equity
Interests of Brooke Holding represented by the certificates
identified in Annex 1 hereto.
C. Section 2 of the Pledge Agreement is hereby further amended by
adding the following representations and warranties and
covenants:
As of September 30, 1999: (i) the Initial Pledged BGLS
Shares are the only issued and outstanding shares of capital
stock of BGLS and (ii) there are no issued and outstanding
BGLS Convertible Securities or BGLS Stock Purchase Rights,
and BGLS is not subject to any obligation, contingent or
otherwise, to issue in the future any additional shares of
its capital stock or any such BGLS Convertible Securities or
BGLS Stock Purchase Rights;
The Initial Pledged BGLS Shares are duly authorized, validly
issued, fully paid and nonassessable;
As of September 30, 1999: (i) the Initial Pledged Brooke
Holding Shares are the only issued and outstanding shares of
capital stock of Brooke Holding and (ii) there are no issued
and outstanding Brooke Holding Convertible Securities or
Brooke Holding Stock Purchase Rights, and Brooke Holding is
not subject to any obligation, contingent or otherwise, to
issue in the future any additional shares of its capital
stock or any such Brooke Holding Convertible Securities or
Brooke Holding Stock Purchase Rights;
The Initial Pledged Brooke Holding Shares are duly
authorized, validly issued, fully paid and nonassessable;
D. Each of Brooke Holding and BGLS Holding hereby makes the
representations and warranties and covenants in Section 2 of the
Pledge Agreement as of the date hereof to the extent relevant to
the Collateral pledged by it.
2
<PAGE> 3
E. Annex I to the Pledge Agreement is hereby deleted in its entirety
and replaced with the following:
ANNEX 1
PLEDGED STOCK
-------------
<TABLE>
<CAPTION>
ISSUER CERTIFICATE NOS. PLEDGOR NUMBER OF SHARES
------------ ---------------- ---------------- ----------------
<S> <C> <C> <C>
New Valley NV 1710 BGLS Holding Inc. 1,974 shares of common stock, par
Corporation value $.01 per share
New Valley NV 1712 BGLS Holding Inc. 83,628 shares of common stock, par
Corporation value $.01 per share
New Valley W 2096 BGLS Holding Inc. 5,924 Warrants to Purchase Common
Corporation Shares
New Valley W 2098 BGLS Holding Inc. 1,254,425 Warrants to Purchase
Corporation Common Shares
Liggett Group, 1 BGLS Inc. 1,000 shares of common stock, par
Inc. value $.10 per share
New Valley 1 BGLS Holding Inc 100 shares of common stock, par
Holdings, Inc. value $.01 per share
Brooke (Over- 2 BGLS Holding Inc. 10 shares of common stock, par value
seas) Ltd. $.01 per share
Old CPI, Inc. 2 BGLS Holding Inc. 100 shares of common stock, par
(formerly known value $.01 per share
as COM Products
Inc.)
Brooke Group 1 BGLS Holding Inc. 1,000 shares of common stock, par
Holding Inc. value $.10 per share
BGLS Inc. 2 Brooke Group Holding Inc. 100 shares of common stock, par
value $.01 per share
</TABLE>
3
<PAGE> 4
SECTION 2. REFERENCES TO PLEDGE AGREEMENT. Except as herein provided,
the Pledge Agreement shall remain unchanged and in full force and effect, and
each direct reference to the Pledge Agreement and indirect references such as
"hereunder", "hereby", "hereto", "herein" and "hereof" shall be deemed
references to the Pledge Agreement as amended hereby.
SECTION 3. COUNTERPARTS. This Amendment No. 1 to the Pledge Agreement
may be executed in any number of counterparts, each of which shall be identical
and all of which, when taken together, shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment No. 1 to
the Pledge Agreement by signing any such counterpart.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to the Pledge Agreement to be duly executed and delivered as of
September 30, 1999.
BGLS HOLDING INC.
By: /s/ Richard J. Lampen
----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BROOKE GROUP HOLDING 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
STATE STREET BANK AND
TRUST COMPANY, as Trustee
By: /s/ Alison Dellabella
----------------------------------
Name: Alison DellaBella
Title: Assistant Vice President
5
<PAGE> 1
EXHIBIT 10.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT, dated as of September 30, 1999, is
made and entered into by and between BGLS Holding Inc., a Delaware corporation
("PURCHASER"), and BGLS Inc., a Delaware corporation ("Seller"). Capitalized
terms not otherwise defined herein have the meanings set forth in SECTION 4.01.
WHEREAS, the Purchaser is a direct wholly-owned subsidiary of
Brooke Group Ltd. (the "Holding Company"), which changed its name on the date
hereof from "BGL Successor Inc." to "Brooke Group Ltd." and is the successor of
Brooke Group Holding Inc. (the "Predecessor"), a Delaware corporation which
changed its name on the date hereof from "Brooke Group Ltd." to "Brooke Group
Holding Inc."; and
WHEREAS, immediately prior to the consummation of the
transactions contemplated by this Agreement, pursuant to Section 251(g) of the
Delaware General Corporation Law and the Agreement and Plan of Merger, dated as
of the date hereof, by and among the Predecessor, Holding Company and BGL Merger
Inc., a wholly-owned subsidiary of the Purchaser ("BGL MERGER"), BGL Merger
merged (the "MERGER") with and into the Predecessor, and Predecessor became a
direct wholly-owned subsidiary of the Purchaser; and
WHEREAS, promptly following the consummation of the
transactions contemplated by this Agreement, the Purchaser will change its name
from "BGLS Holding Inc." to "BGLS Inc." and the Seller will change its name from
"BGLS Inc." to "Old BGLS Inc."; and
WHEREAS, Seller, a direct wholly-owned subsidiary of
Predecessor, owns (i) ten (10) shares of common stock of Brooke (Overseas) Ltd.,
a Delaware corporation ("BOL"), (ii) one hundred (100) shares of common stock of
Old CPI, Inc., a Delaware corporation ("CPI"), and (iii) one hundred (100)
shares of common stock of New Valley Holdings, Inc., a Delaware corporation
("NVH") and, together with BOL and CPI, the "COMPANIES"), together constituting
all issued and outstanding shares of capital stock of the Companies (such shares
collectively being referred to herein as the "SHARES"); and
WHEREAS, pursuant to a Pledge and Security Agreement dated as
of January 1, 1996 (the "PLEDGE AGREEMENT") between the Seller and State Street
Bank and Trust Company, as successor to Fleet National Bank of Massachusetts, as
successor Trustee (the "TRUSTEE") under the Indenture dated as of January 1,
1996 (the "INDENTURE") between the Seller and the Trustee, the Seller has
pledged all of the Shares to the Trustee to secure the Debt Obligations (as
hereinafter defined); and
<PAGE> 2
WHEREAS, Seller desires to sell, and Purchaser desires to
purchase, the Shares on the terms and subject to the conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
SALE OF SHARES AND CLOSING
1.01 PURCHASE AND SALE. Seller agrees to sell to Purchaser,
and Purchaser agrees to purchase from Seller, all of the right, title and
interest of Seller in and to the Shares at the Closing on the terms and subject
to the conditions set forth in this Agreement.
1.02 CONSIDERATION. In consideration for the Shares, Seller
shall transfer and assign to Purchaser, and Purchaser shall assume and agree to
perform and discharge (i) pursuant to a Supplemental Indenture (the
"SUPPLEMENTAL INDENTURE") and an Amendment to the Pledge Agreement (the "PLEDGE
AGREEMENT Amendment"), all of Seller's obligations (the "DEBT OBLIGATIONS")
under the Indenture, pursuant to which Seller has issued and outstanding Series
B Senior Secured Notes due 2001 in the aggregate principal amount of
approximately $93,070,000 as of the date hereof, and is obligated to pay accrued
interest equal to approximately $30,941,000 as of the date hereof, and (ii) all
of Seller's liability (the "PENSION LIABILITY") as Plan Sponsor of the
Retirement Plan of Liggett Group Inc. for Salaried Non-Bargaining Unit
Employees, Retirement Plan of Liggett Group Inc. for Bargaining Unit and Hourly
Employees and the Special Pension Plan of Liggett Group Inc., pursuant to which
Seller had a pension benefit liability of approximately $8,700,000 as of the
date hereof.
1.03 CLOSING. The Closing will take place at such place as
Purchaser and Seller mutually agree, immediately following the effective time of
the Merger. At the Closing, Purchaser will assume and agree to perform and
discharge the Debt Obligations, pursuant to the Supplemental Indenture and the
Pledge Agreement Amendment, and the Pension Liability. Simultaneously, Seller
will assign and transfer to Purchaser all of Seller's right, title and interest
in and to the Shares by delivering to Purchaser with respect to the Shares, duly
executed stock powers endorsed in blank, with requisite stock transfer tax
stamps, if any, attached. At or prior to the Closing, Seller shall deliver to
the Trustee, pursuant to Section 6.01(4) of the Indenture, an Officers'
Certificate and an Opinion of Counsel.
-2-
<PAGE> 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
2.01 ORGANIZATION OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware. Seller has full corporate power and authority to execute and deliver
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment
and to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including without limitation to
own, hold, sell and transfer the Shares pursuant to this Agreement.
2.02 AUTHORITY. The execution and delivery by Seller of this
Agreement, the Supplemental Indenture and the Pledge Agreement Amendment, and
the performance by Seller of its obligations hereunder and thereunder, have been
duly and validly authorized by the Board of Directors and the sole stockholder
of Seller, no other corporate action on the part of Seller or its stockholder
being necessary. This Agreement, the Supplemental Indenture and the Pledge
Agreement Amendment have been duly and validly executed and delivered by Seller
and constitute legal, valid and binding obligations of Seller enforceable
against Seller in accordance with their terms.
2.03 ORGANIZATION OF THE COMPANIES. The Companies are
corporations duly organized, validly existing and in good standing under the
Laws of their respective jurisdictions of organization, and have full corporate
power and authority to conduct their businesses as and to the extent now
conducted and to own, use and lease their Assets and Properties.
2.04 CAPITAL STOCK.
(a) The authorized capital stock of BOL consists solely of one
hundred (100) shares of common stock, par value $.01 per share, 10 shares of
which have been issued.
(b) The authorized capital stock of CPI consists solely of one
hundred (100) shares of common stock, par value $.01 per share, 100 shares of
which have been issued.
(c) The authorized capital stock of NVH consists solely of one
hundred (100) shares of common stock, par value $.01 per share, 100 shares of
which have been issued.
(d) The Shares are duly authorized, validly issued,
outstanding, fully paid and nonassessable. Seller owns the Shares, beneficially
and of record, free and clear of all Liens, other than under the Indenture and
the Pledge Agreement. Except for this Agreement, there are no outstanding
Options with respect to the Companies. The delivery at the Closing of stock
powers with respect to the Shares, in the manner provided in SECTION 1.03, will
transfer to
-3-
<PAGE> 4
Purchaser good and valid title to the Shares, free and clear of all Liens, other
than under the Indenture and the Pledge Agreement.
2.05 NO CONFLICTS. The execution and delivery by Seller of
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment do
not, and the performance by Seller of its obligations under this Agreement, the
Supplemental Indenture and the Pledge Agreement Amendment and the consummation
of the transactions contemplated hereby and thereby, will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws (or other comparable corporate charter documents) of Seller, any Company
or any Subsidiary;
(b) conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to Seller, any Company or any
Subsidiary or any of their respective Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require Seller, any Company or any Subsidiary to obtain any
consent, approval or action of, make any filing with or give any notice to any
Person as a result or under the terms of, (iv) result in or give to any Person
any right of termination, cancellation, acceleration or modification in or with
respect to, (v) result in or give to any Person any additional rights or
entitlement to increased, additional, accelerated or guaranteed payments under,
or (vi) result in the creation or imposition of any Lien upon Seller, any
Company or any Subsidiary or any of their respective Assets and Properties
under, any material Contract or License to which Seller, any Company or any
Subsidiary is a party or by which any of their respective Assets and Properties
is bound.
2.06 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of Seller, any Company or any Subsidiary is required in connection
with the execution, delivery and performance of this Agreement, the Supplemental
Indenture or the Pledge Agreement Amendment or the consummation of the
transactions contemplated hereby or thereby.
-4-
<PAGE> 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
3.01 ORGANIZATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware.
Purchaser has full corporate power and authority to execute and deliver this
Agreement, the Supplemental Indenture and the Pledge Agreement Amendment, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby.
3.02 AUTHORITY. The execution and delivery by Purchaser of
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment,
and the performance by Purchaser of its obligations hereunder and thereunder,
have been duly and validly authorized by the Board of Directors of Purchaser, no
other corporate action on the part of Purchaser or its stockholders being
necessary. This Agreement, the Supplemental Indenture and the Pledge Agreement
Amendment have been duly and validly executed and delivered by Purchaser and
constitute legal, valid and binding obligations of Purchaser enforceable against
Purchaser in accordance with their terms.
3.03 NO CONFLICTS. The execution and delivery by Purchaser of
this Agreement, the Supplemental Indenture and the Pledge Agreement Amendment do
not, and the performance by Purchaser of its obligations under this Agreement,
the Supplemental Indenture and the Pledge Agreement Amendment and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws (or other comparable corporate charter document) of Purchaser;
(b) conflict with or result in a violation or breach of any
term or provision of any Law or Order applicable to Purchaser or any of its
Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require Purchaser to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, or (iv) result in the creation or imposition of any Lien upon
Purchaser or any of its Assets or Properties under, any material Contract or
License to which Purchaser is a party or by which any of its Assets and
Properties is bound.
-5-
<PAGE> 6
3.04 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of Purchaser is required in connection with the execution, delivery
and performance of this Agreement, the Supplemental Indenture or the Pledge
Agreement Amendment or the consummation of the transactions contemplated hereby
or thereby.
ARTICLE IV
DEFINITIONS
4.01 DEFINITIONS. As used in this Agreement, the following
defined terms have the meanings indicated below:
"AGREEMENT" means this Purchase Agreement, as the same shall
be amended from time to time.
"ASSETS AND PROPERTIES" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, investment assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and intellectual property.
"BGL MERGER" has the meaning ascribed to it in the forepart of
this Agreement.
"CLOSING" means the closing of the transactions contemplated
by SECTION 1.03.
"COMPANIES" has the meaning ascribed to it in the forepart of
this Agreement.
"CONTRACT" means any agreement, lease, license, evidence of
indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
"DEBT OBLIGATIONS" has the meaning ascribed to it in SECTION
1.02.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"INDENTURE" has the meaning ascribed to it in the forepart of
this Agreement.
"LAWS" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any
-6-
<PAGE> 7
domestic or foreign state, county, city or other political subdivision or of any
Governmental or Regulatory Authority.
"LICENSES" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"MERGER" has the meaning ascribed to it in the forepart of
this Agreement.
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive or exercise any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock of such Person, including
any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.
"ORDER" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"PENSION LIABILITY" has the meaning ascribed to it in SECTION
1.02.
"PERSON" means any natural person, corporation, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.
"PLEDGE AGREEMENT" has the meaning ascribed to it in the
forepart of this Agreement.
"PLEDGE AGREEMENT AMENDMENT" has the meaning ascribed to it in
SECTION 1.02.
"PLEDGED SHARES" has the meaning ascribed to it in the
forepart of this Agreement.
"PREDECESSOR" has the meaning ascribed to it in the forepart
of this Agreement.
"PURCHASER" has the meaning ascribed to it in the forepart of
this Agreement.
"SELLER" has the meaning ascribed to it in the forepart of
this Agreement.
-7-
<PAGE> 8
"SHARES" has the meaning ascribed to it in the forepart of
this Agreement.
"SUBSIDIARY" means any Person in which any of the Companies,
directly or indirectly through Subsidiaries or otherwise, beneficially owns more
than fifty percent (50%) of either the equity interests in, or the voting
control of, such Person.
"SUPPLEMENTAL INDENTURE" has the meaning ascribed to it in
SECTION 1.02.
"TRUSTEE" has the meaning ascribed to it in the forepart of
this Agreement.
ARTICLE V
MISCELLANEOUS
5.01 NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Purchaser, to:
BGLS Holding Inc.
100 S.E. Second Street
Miami, Florida 33131
Facsimile No.: (305) 579-8001
Attn: Bennett S. LeBow
If to Seller, to:
BGLS Inc.
100 S.E. Second Street
Miami, Florida 33131
Facsimile No.: (305) 579-8001
Attn: Bennett S. LeBow
-8-
<PAGE> 9
with a copy to:
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
Facsimile No.: (212) 530-5219
Attn: Mark Weissler, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 5.01, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 5.01, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 5.01, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section 5.01). Any party from time to time may change
its address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.
5.02 ENTIRE AGREEMENT. This Agreement, the Supplemental
Indenture and the Pledge Agreement Amendment supersede all prior discussions and
agreements between the parties with respect to the subject matter hereof and
thereof, and contain the sole and entire agreement between the parties hereto
with respect to the subject matter hereof and thereof.
5.03 WAIVER. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.
5.04 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
5.05 NO THIRD PARTY BENEFICIARY. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or permitted assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other Person.
5.06 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Purchaser may assign any or all of its
-9-
<PAGE> 10
rights, interests and obligations hereunder to a wholly-owned subsidiary,
provided that any such subsidiary agrees in writing to be bound by all of the
terms, conditions and provisions contained herein. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and permitted
assigns.
5.07 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
5.08 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New York applicable to a
Contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
5.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
-10-
<PAGE> 11
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
BGLS HOLDING INC.
By: /s/ Richard J. Lampen
--------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
BGLS INC.
By: /s/ Joselynn D. Van Siclen
--------------------------------
Name: Joselynn D. Van Siclen
Title: Vice President and Chief
Financial Officer
-11-
<PAGE> 1
EXHIBIT 99.1
------------
S A R D V E R B I N N E N & C O NEWS
FOR IMMEDIATE RELEASE Contact: George Sard/Anna Cordasco/Paul Caminiti
- --------------------- Sard Verbinnen & Co.
212/687-8080
BROOKE GROUP LTD.
COMPLETES HOLDING COMPANY REORGANIZATION
------------------------------------------------------------------------
MIAMI, FL, OCTOBER 1, 1999 -- Brooke Group Ltd. (NYSE: BGL) announced
today that it has reorganized into a holding company form of organizational
structure. The name of the new holding company will remain "Brooke Group Ltd."
The new corporate structure will allow the Company to manage its entire
organization more effectively and broadens the alternatives for future
financing.
Stockholders do not have to take any action in connection with the
change in corporate structure and will not need to exchange their existing share
certificates. Outstanding shares of common stock have been automatically
exchanged on a share-for-share, tax-free basis into shares of the new holding
company. The new holding company will have the same certificate of
incorporation, by-laws, executive officers and directors as those of the old
Company. The new shares will have identical rights and terms as the old shares
and will continue to be traded on the New York Stock Exchange under the symbol
"BGL".
Brooke Group Ltd. is a holding company which owns Liggett Group Inc.
and controlling interests in Liggett-Ducat Ltd. and New Valley Corporation.
# # #
SARD VERBINNEN & CO., INC. 630 THIRD AVENUE NEW YORK, NY 10017
TEL: 212-687-8080 FAX: 212-687-8344
