UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.)*
Brooke Group Ltd.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
112525100
(CUSIP Number)
Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
January 28, 1998
(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 Rule 13d-1(b)(3) or (4),
check the following box / /.
Check the following box if a fee is being paid with the statement
/ /. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) 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__ Pages
List of Exhibits is on Page __
SCHEDULE 13D
CUSIP No. 112525100 Page __ of __ Pages
1 NAME OF REPORTING PERSON
High River Limited Partnership
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
1,500,000
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
1,500,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,500,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.7%
14 TYPE OF REPORTING PERSON*
PN
SCHEDULE 13D
CUSIP No. 112525100 Page __ of __ Pages
1 NAME OF REPORTING PERSON
Riverdale LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
0
8 SHARED VOTING POWER
1,500,000
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
1,500,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,500,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.7%
14 TYPE OF REPORTING PERSON*
OO
SCHEDULE 13D
CUSIP No. 112525100 Page __ of __ Pages
1 NAME OF REPORTING PERSON
Carl C. Icahn
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
0
8 SHARED VOTING POWER
1,500,000
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
1,500,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,500,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.7%
14 TYPE OF REPORTING PERSON*
IN
SCHEDULE 13D
------------
Item 1. Security and Issuer
This Schedule 13D relates to the common stock, par value $0.01
per share ("Shares"), of Brooke Group Ltd., a Delaware corporation (the
"Issuer" or "Brooke Group"). The address of the principal executive
offices of the Issuer is 100 S.E. Second Street, 32nd Floor, Miami,
Florida 33131.
Item 2. Identity and Background
The persons filing this statement are High River Limited
Partnership, a Delaware limited partnership ("High River"), Riverdale
LLC, a New York limited liability company ("Riverdale") and Carl C.
Icahn, a citizen of the United States of America (collectively, the
"Registrants"). The principal business address and the address of the
principal office of the Registrants is 100 South Bedford Road, Mount
Kisco, New York 10549, with the exception of Carl C. Icahn, whose
principal business address is c/o Icahn Associates Corp., 767 Fifth
Avenue, 47th Floor, New York, New York 10153.
Riverdale is the general partner of High River. Riverdale is
wholly owned by Carl C. Icahn. Registrants may be deemed to be a "group"
with the meaning of Section 13(d)(3) promulgated under the Securities
Exchange Act of 1934, as amended (the "Act").
High River is primarily engaged in the business of investing in
securities. Riverdale is primarily engaged in the business of owning
real estate and acting as general partner of High River. Carl C. Icahn's
present principal occupation or employment is acting as President and a
Director of Starfire Holding Corporation, a Delaware corporation
("Starfire"), and as the Chairman of the Board and Director of various
Starfire's subsidiaries, including ACF Industries, Incorporated, a New
Jersey corporation ("ACF"). Starfire, whose principal business address
is 100 South Bedford Road, Mount Kisco, New York 10549, is primarily
engaged in the business of holding, either directly or through its
subsidiaries, a majority of the common stock of ACF. ACF is primarily
engaged in the business of leasing, selling and manufacturing railroad
freight and tank cars.
PAGE
The name, citizenship, present principal occupation or
employment and business address of each member of Riverdale is set forth
in Schedule A attached hereto.
Carl C. Icahn is a member of Riverdale and owns 100% of the
interests therein. As such, Mr. Icahn is in a position directly and
indirectly to determine the investment and voting decisions made by
Registrants.
Neither High River, Riverdale, Mr. Icahn, nor any executive
officer or director of any of the Registrants, has, during the past five
years, (a) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (b) been 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 a
finding of any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The aggregate purchase price of the 1,500,000 Shares purchased
by the Registrants, is $9,000,000. The source of funding for the
purchase of these Shares is general working capital of the Registrants.
Item 4. Purpose of Transaction
Registrants acquired the Shares for investment purposes.
Issuer has agreed to register such shares under the Securities
Act of 1933, ("Act") and, once such registration statement becomes
effective, to keep such Shares registered so that the Shares may be sold
by Registrants at any time and from time to time, until the shares are
sold or may be sold pursuant to Rule 144(k) under the Act.
Registrants reserve the right to acquire additional Shares at
any time and from time to time in public or private transactions, whether
from third parties or otherwise. Likewise, Registrants reserve the right
to dispose of any or all of the Shares in whole or in part, in public or
private transactions, whether to third parties or otherwise.
Item 5. Interest in Securities of the Issuer
(a) As of the close of business on January 28, 1998,
Registrants may be deemed to beneficially own in the aggregate 1,500,000
Shares representing approximately 7.7% of the Issuer's outstanding Shares
(based upon the 18,097,096 Shares stated to be outstanding as of November
10, 1997, by the Issuer in the Issuer's 10-Q filing filed with the
Securities and Exchange Commission (the "SEC") on November 17, 1997, plus
the 1,500,000 Shares to be issued to Registrants.) Registrants have
direct beneficial ownership of the Shares as follows:
NAME NUMBER OF APPROXIMATE PERCENTAGE
SHARES OF OUTSTANDING SHARES
High River 1,500,000 7.7%
Riverdale and Mr. Icahn, by virtue of their relationships to
High River (as disclosed in Item 2), may be deemed to beneficially own
(as that term is defined in Rule 13d-3 under the Act) the Shares which
High River directly beneficially owns. Each of Riverdale and Mr. Icahn
disclaims beneficial ownership of such Shares for all other purposes.
To the best of Registrants' knowledge, except as set forth
herein, neither the directors nor the executive officers of the
Registrants beneficially own any Shares.
(b) High River has sole voting power and sole dispositive
power with regard to 1,500,000 Shares. Riverdale has shared voting power
and shared dispositive power with regard to 1,500,000 Shares. Carl C.
Icahn has shared voting power and shared dispositive power with regard to
1,500,000 Shares.
(c) The following sets forth all transactions with respect to
Shares effected during the past sixty days by each of the persons named
in Item 5(a) above.
On January 16, 1998, High River entered into a Stock
Purchase Agreement with Brooke Group, Ltd. whereby High River has agreed
to purchase 1,500,000 shares of Brooke Group common stock for $9,000,000
(the "Agreement"), attached hereto as Exhibit 2. As a condition to the
Agreement, Shares must be approved for listing on the New York Stock
Exchange ("the Exchange"). On January 28, 1998, Registrants were informed
by Brooke Groupe that the Exchange had approved the listing of the Shares
and the closing is scheduled to take place shortly.
(d) No other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of
any Shares which Registrants may be deemed to beneficially own.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationship with
Respect to Securities of the Issuer
Registrants are party to a Joint Filing Agreement, a copy of
which is attached hereto as Exhibit 1, with respect to the filing of this
statement and any amendments thereto and Stock Purchase Agreement, dated
January 16, 1998, between Brooke Group Ltd., and High River Limited
Partnership which is attached hereto as Exhibit 2.
Item 7. Material to be Filed as Exhibits
1. Joint Filing Agreement of the Registrants
2. Stock Purchase Agreement, dated January 16, 1998, between Brooke
Group Ltd., and High River Limited Partnership.
PAGE
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: January 26, 1998
RIVERDALE LLC
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC
Its: General Partner
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
Carl C. Icahn
By: /s/Carl C. Icahn
Carl C. Icahn
(Signature Page of Schedule 13D with respect to Brooke Group
Ltd.)
PAGE
SCHEDULE A
----------
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS
Name, Business Address and Principal Occupation of
Each Member of Riverdale
The following sets forth the name, position, and principal
occupation of each member of Riverdale. Each such person is a citizen of
the United States of America. Except as otherwise indicated, the
business address of each director and officer is c/o Icahn Associates
Corp., 767 Fifth Avenue, 47th Floor, New York, New York 10153. To the
best of Registrants' knowledge, except as set forth in this statement on
Schedule 13D, none of the directors or executive officers of the
Registrants own any shares of the Issuer.
RIVERDALE LLC
Name Position Principal Occupation
- ---- -------- --------------------
Carl C. Icahn Member See Item 2 herein
Officer of various Icahn
affiliated entities
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, the persons named below agree
to the joint filing on behalf of each of them of a statement on
Schedule 13D (including amendments thereto) with respect to the
Common Stock, par value $.01 per share, of Brooke Group Ltd. and
further agree that this Joint Filing Agreement be included as an
Exhibit to such joint filings. In evidence thereof, included as
Exhibit to such joint filings. In evidence thereof, the
undersigned, being duly authorized, have executed this Joint
Filing Agreement this 26th day of January, 1998.
Dated: January 26, 1998
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Member
RIVERDALE LLC
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Member
/s/ Carl C. Icahn
Carl C. Ichan
[Joint Filing Agreement for Schedule 13D with respect to
Brooke Group Ltd.]
Exhibit 2
STOCK PURCHASE AGREEMENT
dated as of January 16, 1998
by and between
BROOKE GROUP LTD.
and
HIGH RIVER LIMITED PARTNERSHIP
with respect to 1,500,000 shares of
common stock of
BROOKE GROUP LTD.
TABLE OF CONTENTS
This Table of Contents is not part of the
Agreement to which it is attached but is inserted for convenience
only.
Page
No.
----
ARTICLE I SALE OF SHARES AND CLOSING
1.01 Purchase and Sale................................ 1
1.02 Purchase Price................................... 1
1.03 Closing.......................................... 1
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.01 Corporate Existence of the Company............... 2
2.02 Authority........................................ 2
2.03 Capital Stock.................................... 2
2.04 No Conflicts..................................... 2
2.05 Governmental Approvals and Filings............... 3
2.06 SEC Reports and Financial Statements............. 3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.01 Organization of Purchaser........................ 3
3.02 Authority........................................ 4
3.03 No Conflicts..................................... 4
3.04 Governmental Approvals and Filings............... 4
3.05 Purchase for Investment.......................... 5
ARTICLE IV CONDITIONS
4.01 Conditions to Obligation of Each Party to
Effect the Closing................................ 5
ARTICLE V COVENANTS OF THE COMPANY
5.01 Shelf Registration Statement..................... 6
5.02 Liquidated Damages............................... 6
5.03 Registration Expenses............................ 7
5.04 Indemnification.................................. 7
5.05 Valuation........................................ 9
ARTICLE VI DEFINITIONS
6.01 Definitions....................................... 10
ARTICLE VII MISCELLANEOUS
7.01 Entire Agreement................................... 12
7.02 Expenses........................................... 12
7.03 Waiver............................................. 12
7.04 Amendment.......................................... 13
7.05 No Third Party Beneficiary......................... 13
7.06 No Assignment; Binding Effect...................... 13
7.07 Headings........................................... 13
7.08 Invalid Provisions................................. 13
7.09 Governing Law...................................... 13
7.10 Counterparts....................................... 13
7.11 Termination........................................ 13
This STOCK PURCHASE AGREEMENT dated as of January 16,
1998 is made and entered into by and between High River Limited
Partnership, a Delaware limited partnership ("PURCHASER"), and
Brooke Group Ltd., a Delaware corporation (the "COMPANY").
Capitalized terms not otherwise defined herein have the meanings
set forth in SECTION 6.01.
WHEREAS, Purchaser desires to purchase from the Company
1,500,000 shares (the "SHARES") of common stock, par value $.10
per share, of the Company, on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the Company will use the net proceeds from the
sale of the Shares to make a contribution to the capital of its
indirect wholly-owned subsidiary Brooke (Overseas) Ltd., a
corporation engaged in the manufacture and sale of cigarettes in
Russia through Liggett-Ducat, a Russian joint stock company;
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. The Company agrees to sell to
Purchaser, and Purchaser agrees to purchase from the Company, the
Shares at the Closing on the terms and subject to the conditions
set forth in this Agreement.
1.02 PURCHASE PRICE. The aggregate purchase price for
the Shares is $9,000,000 (the "PURCHASE PRICE"), payable in
immediately available United States funds at the Closing in the
manner provided in SECTION 1.03.
1.03 CLOSING. The Closing will take place at the
offices of Milbank, Tweed, Hadley & McCloy, One Chase Manhattan
Plaza, New York, NY 10005 on the Closing Date. At the Closing:
(i) Purchaser will pay the Purchase Price by wire transfer of
immediately available funds to such account as the Company has
reasonably directed, and (ii) the Company will sell to Purchaser
the Shares by delivering to Purchaser a certificate or
certificates representing the Shares. The Shares will bear an
appropriate securities law legend.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser
as follows:
2.01 CORPORATE EXISTENCE OF THE COMPANY. The Company is
a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Delaware. The Company has
full corporate power and authority to execute and deliver this
Agreement and to perform the Company's obligations hereunder and
to consummate the transactions contemplated hereby, including
without limitation to sell and transfer (pursuant to this
Agreement) the Shares.
2.02 AUTHORITY. The execution and delivery by the
Company of this Agreement, and the performance by such party of
its obligations hereunder, have been duly and validly authorized
by the Board of Directors of the Company, no other corporate
action on the part of the Company or its stockholders being
necessary. This Agreement has been duly and validly executed and
delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against the Company
in accordance with its terms.
2.03 CAPITAL STOCK. The Shares are duly authorized,
validly issued, fully paid and nonassessable. The delivery of a
certificate or certificates at the Closing representing the
Shares in the manner provided in SECTION 1.03 will transfer to
Purchaser good and valid title to the Shares, free and clear of
all Liens other than Liens created or suffered to exist by
Purchaser.
2.04 NO CONFLICTS. The execution and delivery by the
Company of this Agreement do not, the performance by the Company
of its obligations under this Agreement and the consummation of
the transactions contemplated hereby 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 by-laws (or other comparable
corporate charter documents) of the Company;
(b) conflict with or result in a violation or
breach of any term or provision of any Law or Order applicable to
the Company or any of its Assets and Properties (other than such
conflicts, violations or breaches (i) which will not in the
aggregate adversely affect the validity or enforceability of this
Agreement or have a material adverse effect on the Business or
Condition of the Company or (ii) as would occur solely as a
result of the identity or the legal or regulatory status of
Purchaser or any of its Affiliates); or
(c) except as will not, individually or in the
aggregate, be materially adverse to the Business or Condition of
the Company or adversely affect the ability of the Company to
consummate the transactions contemplated hereby or to perform its
obligations hereunder, (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 the Company 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,
or (v) result in the creation or imposition of any Lien upon the
Company or any of its Assets and Properties under, any Contract
or License to which the Company is a party or by which any of its
Assets and Properties is bound.
2.05 GOVERNMENTAL APPROVALS AND FILINGS. Except for the
listing by the Company of the Shares on notice of issuance on The
New York Stock Exchange and as required under SECTION 5.01, no
other consent, approval or action of, filing with or notice to
any Governmental or Regulatory Authority by the Company is
required as a precondition to the execution, delivery and
performance of this Agreement or the consummation of the
transactions contemplated hereby except (i) where the failure to
obtain any such consent, approval or action, to make any such
filing or to give any such notice will not adversely affect the
ability of the Company to consummate the transactions
contemplated by this Agreement or to perform its obligations
hereunder or have a material adverse effect on the Business or
Condition of the Company, and (ii)those as would be required
solely as a result of the identity or the legal or regulatory
status of the Purchaser or any of its Affiliates.
2.06 SEC REPORTS AND FINANCIAL STATEMENTS. As of the
irrespective dates, the Company SEC Reports did not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading. Since the respective dates of
such filings, and except as disclosed therein, there has not been
any change, event or development having, or that is reasonably
expected to have, individually or in the aggregate, a material
adverse effect on the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company
as follows:
3.01 ORGANIZATION OF PURCHASER. Purchaser is a limited
partnership duly organized, validly existing and in good standing
under the Laws of the State of Delaware. Purchaser is duly
authorized to execute and deliver this Agreement and to perform
Purchaser's obligations hereunder and to consummate the
transactions contemplated hereby, including without limitation to
buy (pursuant to this Agreement) the Shares.
3.02 AUTHORITY. The execution and delivery by Purchaser
of this Agreement, and the performance by Purchaser of its
obligations hereunder, have been duly and validly authorized, no
other action on the part of Purchaser being necessary. This
Agreement has been duly and validly executed and delivered by
Purchaser and constitutes a legal, valid and binding obligation
of Purchaser enforceable against Purchaser in accordance with its
terms.
3.03 NO CONFLICTS. The execution and delivery by
Purchaser of this Agreement do not, the performance by Purchaser
of its obligations under this Agreement and the consummation of
the transactions contemplated hereby will not:
(a) conflict with or result in a violation or
breach of any of the terms, conditions or provisions of its
partnership agreement (or other comparable organizational
documents) 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 (other than such
conflicts, violations or breaches (i)which will not in the
aggregate adversely affect the validity or enforceability of this
Agreement or have a material adverse effect on the Business or
Condition of Purchaser or (ii) as would occur solely as a result
of the identity or the legal or regulatory status of the Company
or any of its Affiliates); or
(c) except as will not, individually or in the
aggregate, be materially adverse to the Business or Condition of
Purchaser or adversely affect the ability of Purchaser to
consummate the transactions contemplated hereby or to perform its
obligations hereunder, (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, (iv)
result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to,
or (v) result in the creation or imposition of any Lien upon
Purchaser or any of its Assets and Properties under, any Contract
or License to which Purchaser is a party or by which any of its
Assets and Properties is bound.
3.04 GOVERNMENTAL APPROVALS AND FILINGS. No consent,
approval or action of, filing with or notice to any Governmental
or Regulatory Authority by Purchaser is required as a
precondition to the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated
hereby except (i) where the failure to obtain any such consent,
approval or action, to make any such filing or to give any such
notice will not adversely affect the ability of Purchaser to
consummate the transactions contemplated by this Agreement or to
perform its obligations hereunder or have a material adverse
effect on the Business or Condition of Purchaser, and (ii)those
as would be required solely as a result of the identity or the
legal or regulatory status of the Company or any of its
Affiliates.
3.05 PURCHASE FOR INVESTMENT. (a) The Shares will be
acquired by Purchaser for its own account for the purpose of
investment, it being understood that the right to dispose of such
Shares shall be entirely within the discretion of Purchaser.
Purchaser will refrain from transferring or otherwise disposing
of any of the Shares, or any interest therein, in such manner as
to cause the Company to be in violation of the registration
requirements of the Securities Act or any applicable state
securities or blue sky laws.
(b) Purchaser acknowledges that it is an
"accredited investor" as defined in Rule 501 of Regulation D
under the Securities Act.
ARTICLE IV
CONDITIONS
4.01 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT
THE CLOSING. The respective obligations of each party hereunder
to effect the Closing are subject to the fulfillment or waiver,
at the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the other party in this
Agreement shall be true and correct in all material respects on
and as of the Closing Date.
(b) ORDERS AND LAWS. There shall not be pending or
in effect on the Closing Date any Order or Law restraining,
enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this
Agreement or which could reasonably be expected to otherwise
result in a material diminution of the benefits of the
transactions contemplated by this Agreement to such party, and
there shall not be pending on the Closing Date any Action or
Proceeding in, before or by any Governmental or Regulatory
Authority which could reasonably be expected to result in the
issuance of any such Order or the enactment, promulgation or
deemed applicability to either party or the transactions
contemplated by this Agreement of any such Law.
(c) REGULATORY CONSENTS AND APPROVALS. All
consents, approvals and actions of, filings with and notices to
any Governmental or Regulatory Authority necessary to permit each
party to perform its respective obligations under this Agreement
and to consummate the transactions contemplated hereby (a) shall
have been duly obtained, made or given, (b) shall be in form and
substance reasonably satisfactory to each party, (c) shall not be
subject to the satisfaction of any condition that has not been
satisfied or waived and (d) shall be in full force and effect,
and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the
consummation of the transactions contemplated by this Agreement
shall have occurred, and the Shares shall have been accepted for
listing on notice of issuance by The New York Stock Exchange.
ARTICLE V
COVENANTS OF THE COMPANY
The Company covenants and agrees with Purchaser that
the Company will comply with the covenants and provisions of this
ARTICLE V, except to the extent Purchaser may otherwise consent
in writing:
5.01 SHELF REGISTRATION STATEMENT.
(a) The Company shall use best efforts to file
with the Securities and Exchange Commission (the "COMMISSION") by
the Filing Date a Shelf Registration Statement pursuant to Rule
415 under the Securities Act (the "SHELF REGISTRATION STATEMENT")
on Form S-3 (or any successor form thereto) to register resales
by Purchaser of the Shares. The Company shall use best efforts to
cause such Shelf Registration Statement to be declared effective
by the Commission by the Effectiveness Date. The Company shall
use best efforts to keep such Shelf Registration Statement
continuously effective and usable until the date on which all of
the Shares are sold or such earlier date as the Shares may be
resold by Purchaser without registration under Rule 144(k) under
the Securities Act (the "FINAL DATE"). The Company shall deliver
copies of the Prospectus to The New York Stock Exchange pursuant
to Rule 153 under the Securities Act and to Purchaser on
reasonable request.
(b) Upon the occurrence of any event that would
cause the Shelf Registration Statement (i) to contain a material
misstatement or to omit a material fact required to be stated
therein or necessary to make the statements made not misleading
or (ii) not to be effective and usable for resale of the Shares
until the Final Date, the Company shall notify Purchaser as soon
as reasonably practicable thereafter and, within two Business
Days of the occurrence of such event, file a supplement to the
Prospectus included in (if a supplement is appropriate for such
purpose) or, within four Business Days of the occurrence of such
event, file an amendment to the Shelf Registration Statement, in
the case of clause (i) immediately above correcting any such
misstatement or omission, and in the case of either clause (i) or
(ii) immediately above use best efforts to cause such amendment
to be declared effective and such Shelf Registration Statement to
become usable as soon as reasonably practicable thereafter.
5.02 LIQUIDATED DAMAGES. (a) The Company and Purchaser
agree that Purchaser will suffer damages if the Company fails to
fulfill its obligations under SECTION 5.01(A) of this Agreement
and that it would not be feasible to ascertain the extent of such
damages with precision. Accordingly, (a) if the Company fails to
file the Shelf Registration statement on or prior to the Filing
Date or (b) if the Shelf Registration Statement has not been
declared effective on or prior to the Effectiveness Date, then
Liquidated Damages on the Shares shall accrue at a rate of
$0.016667 per Share per day for the first 60-day period, and
thereafter at a rate per Share per day of $.033334, until both of
the foregoing breaches have been cured, PROVIDED, HOWEVER, that
the aggregate Liquidated Damages payable on the Shares may not
exceed $9,000,000.
(b) Notwithstanding the foregoing, the Company
shall not be required to pay such Liquidated Damages with respect
to the Shares if the applicable default arises from the failure
of the Company to file or cause to become effective within the
time periods specified in SECTION 5.01 primarily by reason of the
failure of the Purchaser to provide such information concerning
Purchaser as (i) is required pursuant to the Securities Act and
the regulations promulgated thereunder for inclusion in the Shelf
Registration Statement or any Prospectus included therein or (ii)
the SEC may request in connection with such Shelf Registration.
5.03 REGISTRATION EXPENSES. All fees and expenses
incidental to the performance of or compliance with this Article
V by the Company shall be borne by the Company whether or not the
Shelf Registration is filed or becomes effective, other than
underwriting discounts and commissions and transfer taxes, if
any, in respect of the Shares, which shall be payable by
Purchaser.
5.04 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company
shall, to the full extent permitted by law, indemnify and hold
harmless Purchaser, its directors and each Person, if any, who
controls Purchaser within the meaning of the Securities Act
against any Losses, claims, damages, expenses or liabilities,
joint or several (together, "LOSSES"), to which it or any such
controlling Person may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Shelf
Registration Statement or the Prospectus, or any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein(in the
case of the Prospectus, in the light of the circumstances under
which they were made) not misleading, and the Company will
reimburse Purchaser and each such controlling Person for any
legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such Loss (or
action or proceeding in respect thereof); PROVIDED that the
Company shall not be liable in any such case to the extent that
any such Loss (or action or proceeding in respect thereof) arises
out of or is based upon (x) an untrue statement or alleged untrue
statement or omission or alleged omission made in any such
registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and
in conformity with written information furnished to the Company
through an instrument duly executed by Purchaser specifically
stating that it is for use in the preparation thereof or (y)
Purchaser's failure to send or give a copy of the final
Prospectus to the Persons asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Shares to such
Person if such statement or omission was corrected in such final
Prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of Purchaser
or any such controlling Person, and shall survive the transfer of
Shares by Purchaser.
(b) INDEMNIFICATION BY PURCHASER. Purchaser shall,
to the full extent permitted by law, indemnify and hold harmless
the Company, its directors and officers, and each other Person,
if any, who controls the Company within the meaning of the
Securities Act, against any Losses to which the Company or any
such director or officer or controlling Person may become subject
under the Securities Act or otherwise, insofar as such Losses
(or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the Shelf Registration Statement or the Prospectus,
or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein (in the case of a Prospectus, in the light of
the circumstances under which they were made) not misleading, if
such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an
instrument duly executed by Purchaser specifically stating that
it is for use in the preparation of the Shelf Registration
Statement or the Prospectus. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of the Company or any such director, officer or
controlling Person and shall survive the transfer of the Shares
by Purchaser.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt
by an Indemnified Party of notice of the commencement of any
action or proceeding involving a claim referred to in the
preceding PARAGRAPH (A) OR (B) of this SECTION 5.04, such
Indemnified Party will, if a claim in respect thereof is to be
made against an Indemnifying Party pursuant to such paragraphs,
give written notice to the latter of the commencement of such
action, PROVIDED that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under the preceding
paragraphs of this SECTION 5.04, except to the extent that the
Indemnifying Party is actually prejudiced by such failure to
give notice. In case any such action is brought against an
Indemnified Party, the Indemnifying Party shall be entitled to
participate in and to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party, and after
notice from the Indemnifying Party to such Indemnified Party of
its election so to assume the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified Party for any
legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs
of investigation; PROVIDED that the Indemnified Party or
Indemnified Parties shall have the right to employ one counsel
to represent it or them if, in the reasonable judgment of the
Indemnified Party or Indemnified Parties, it is advisable for it
or them to be represented by separate counsel by reason of
having legal defenses which are different from or in addition to
those available to the Indemnifying Party, and in that event the
reasonable fees and expenses of such one counsel shall be paid by
the Indemnifying Party. If the Indemnifying Party is not
entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses of more than
one counsel for the Indemnified Parties with respect to such
claim, unless in the reasonable judgment of the Indemnified Party
a conflict of interest may exist between such Indemnified Party
and any other Indemnified Parties with respect to such claim, in
which event the Indemnifying Party shall be obligated to pay the
fees and expenses of such additional counsel for the Indemnified
Parties or counsels. No Indemnifying Party shall consent to
entry of any judgment or enter into any settlement without the
consent of the Indemnified Party which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. No Indemnifying
Party shall be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably
withheld.
(d) CONTRIBUTION. If the indemnity and
reimbursement obligation provided for in any paragraph of this
SECTION 5.04 is unavailable or insufficient to hold harmless an
Indemnified Party in respect of any Losses (or actions or
proceedings in respect thereof) referred to therein, then the
Indemnifying Party shall contribute to the amount paid or payable
by the Indemnified Party as a result of such Losses (or actions
or proceedings in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and the Indemnified Party on the other
hand in connection with statements or omissions which resulted in
such Losses. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
Indemnifying Party or the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The
parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined
by PRO RATA allocation or by any other method of allocation
which does not take account of the equitable considerations
referred to in the first sentence of this paragraph. The amount
paid by an Indemnified Party as a result of the Losses referred
to in the first sentence of this paragraph shall be deemed to
include any legal and other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending
any Loss which is the subject of this paragraph. No Indemnified
Party guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Indemnifying Party if the Indemnifying
Party was not guilty of such fraudulent misrepresentation.
5.05 VALUATION. The Company shall use reasonable
efforts to obtain, within 30 days of the Closing Date, from an
independent valuation firm, a valuation of the Shares as of the
date hereof reasonably acceptable to and addressed to the
Company and Purchaser (the "VALUATION"); PROVIDED, HOWEVER, that
if the Company fails to obtain such Valuation within such 30-day
period, Purchaser may obtain a Valuation acceptable to it at the
Company's reasonable expense.
ARTICLE VI
DEFINITIONS
6.01 DEFINITIONS. (a) DEFINED TERMS. As used in this
Agreement, the following defined terms have the meanings
indicated below:
"ACTIONS OR PROCEEDINGS" means any action, suit,
proceeding, arbitration or Governmental or Regulatory Authority
investigation.
"AFFILIATE" means any Person that directly, or
indirectly through one of more intermediaries, controls or is
controlled by or is under common control with the Person
specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether
by Contract or otherwise.
"AGREEMENT" means this Stock Purchase Agreement and the
Disclosure Schedule, 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,
and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person.
"BUSINESS DAY" means any day other than a Saturday, a
Sunday or any other day on which banking institutions are not
authorized or required to close in New York City or Miami,
Florida.
"BUSINESS OR CONDITION OF THE COMPANY" means the
business, financial condition or results of operations of the
Company and the Subsidiaries taken as a whole.
"CLOSING" means the closing of the transactions
contemplated by SECTION 1.03.
"CLOSING DATE" means the third Business Day after the
Shares have been accepted for listing on notice of issuance on
The New York Stock Exchange.
"COMMISSION" has the meaning ascribed to it in SECTION
5.01.
"COMPANY" has the meaning ascribed to it in the
forepart of this Agreement.
"COMPANY SEC REPORTS" means each form, report,
schedule, registration statement, definitive proxy statement and
other document (together with all amendments thereof and
supplements thereto) filed by the Company with the SEC since
December 31, 1996.
"CONTRACT" means any agreement, lease, license,
evidence of indebtedness, mortgage, indenture, security agreement
or other contract.
"DISCLOSURE SCHEDULE" means the record delivered to
Purchaser by the Company herewith and dated as of the date
hereof, containing all lists, descriptions, exceptions and other
information and materials as are required to be included therein
by the Company pursuant to this Agreement.
"EFFECTIVENESS DATE" means May 15, 1998.
"FILING DATE" means February 2, 1998.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court,
tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States or any state, county,
city or other political subdivision.
"INDEMNIFIED PARTY" means a party entitled to indemnity
in accordance with SECTION 5.04.
"INDEMNIFYING PARTY" means a party obligated to provide
indemnity in accordance with SECTION 5.04.
"LAWS" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of
the United States or any state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"LICENSE" 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.
"ORDER" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in
each such case whether preliminary or final).
"PERSON" means any natural person, corporation, limited
liability company, general partnership, limited partnership,
proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"PROSPECTUS" shall mean the prospectus included in the
Shelf Registration Statement, as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering
of any portion of the securities covered by such Shelf
Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated
by reference in such Prospectus.
"PURCHASE PRICE" has the meaning ascribed to it in
SECTION 1.02.
"PURCHASER" has the meaning ascribed to it in the
forepart of this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"SEC" means Securities and Exchange Commission.
"SHARES" has the meaning ascribed to it in the forepart
of this Agreement.
"SHELF REGISTRATION STATEMENT" has the meaning ascribed
to it in SECTION 5.01.
"SUBSIDIARY" means any Person in which the Company,
directly or indirectly through Subsidiaries or otherwise,
beneficially owns more than 50% of either the equity interests
in, or the voting control of, such Person.
"VALUATION" has the meaning ascribed to it in SECTION
5.05.
ARTICLE VII
MISCELLANEOUS
7.01 ENTIRE AGREEMENT. This Agreement supersedes all
prior discussions and agreements between the parties with respect
to the subject matter hereof and contains the sole and entire
agreement between the parties hereto with respect to the subject
matter hereof.
7.02 EXPENSES. Except as otherwise expressly provided
in this Agreement, whether or not the transactions contemplated
hereby are consummated, each party will pay its own costs and
expenses incurred in connection with the negotiation, execution
and closing of this Agreement and the transactions contemplated
hereby, PROVIDED, HOWEVER, that the Company will pay the
reasonable fees and expenses of Purchaser's counsel in connection
therewith.
7.03 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.
7.04 AMENDMENT. This Agreement may be amended,
supplemented or modified only by a written instrument duly
executed by or on behalf of each party hereto.
7.05 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.
7.06 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 for assignments and transfers by operation of Law.
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 assigns.
7.07 HEADINGS. The headings used in this Agreement have
been inserted for convenience of reference only and do not define
or limit the provisions hereof.
7.08 INVALID PROVISIONS. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under
any present or future Law, and if the rights or obligations of
any party hereto under this Agreement will not be materially and
adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as
if such illegal, invalid or unenforceable provision had never
comprised a part hereof, and (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be
affected by the illegal, invalid or unenforceable provision or by
its severance here from.
7.09 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.
7.10 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.
7.11 TERMINATION. This Agreement may be terminated, and
the transactions contemplated hereby may be abandoned, at any
time after February 2, 1998 by either party upon notification of
the non-terminating party by the terminating party if the Closing
shall not have occurred on or before such date and such failure
to consummate is not caused by a breach of this Agreement by the
terminating party.
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.
HIGH RIVER LIMITED PARTNERSHIP
By: Riverdale LLC, general partner
By: ------------------------------
Name: Robert J. Mitchell
Title: Manager
BROOKE GROUP LTD.
By: ------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
