EXHIBIT 10.2
FORM OF STANDBY PURCHASE AGREEMENT
THIS STANDBY PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of ____________, 2002 by and between Ladenburg Xxxxxxxx Financial
Services Inc., a Florida corporation (the "Company"), and New Valley
Corporation, a Delaware corporation (the "Purchaser").
WHEREAS, the Company anticipates issuing to the holders (the "Holders")
of its issued and outstanding shares of common stock, $.001 par value per share
( the "Common Stock"), and stock options, warrants and senior convertible
promissory notes of record at the close of business on ________, 2002 (the
"Record Date") certain subscription rights (the "Basic Subscription Rights"),
with over-subscription privileges ("Over-subscription Privileges", together with
the Basic Subscription Rights, the "Rights"), to subscribe for and purchase
additional shares of Common Stock at a per share price of $____ (the
"Subscription Price"), on the basis of ____ Rights for each share of Common
Stock held, or deemed held, of record on such date (such transaction generally
being herein referred to as the "Rights Offering");
WHEREAS, the Purchaser is the holder of senior convertible promissory
notes of the Company as of the Record Date; and, as such, will receive Rights in
the Rights Offering; and
WHEREAS, the Purchaser desires to serve as a Standby Purchaser for a
specified amount of shares of Common Stock at the Subscription Price (the
"Standby Shares") that have not been subscribed for by holders of Rights prior
to the expiration of the Rights Offering at 5:00 p.m., New York city time, on
____________, 2002 (the "Expiration Time");
NOW, THEREFORE, in and for consideration of the premises, and other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Purchase and Delivery of Standby Shares.
(a) Concurrently with the execution of this Agreement, the Company is
commencing the Rights Offering in which the Company is offering __________
shares of Common Stock to the Holders for purchase on or before the Expiration
Time. If the Holders other than the Purchaser do not subscribe for and purchase
all _________ shares of Common Stock offered in the Rights Offering through the
exercise of their Basic Subscription Rights and Over-subscription Privileges
(the "Unsubscribed Shares") on or before the Expiration Time, subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
the Purchaser and the Purchaser hereby agrees to subscribe for and purchase from
the Company, a number of shares equal to _________ less the number of shares
subscribed for and purchased by Holders other than the Purchaser in the Rights
Offering, up to a maximum of ________ shares.
(b) The Purchaser shall fulfill its standby purchase commitment under
this Section by executing and delivering to the Company prior to the Expiration
Time an executed subscription rights certificate in the form attached to the
Registration Statement (as defined in Section 3(a)(v) below) as Exhibit 4.1
thereto (the "Purchaser Subscription Certificate"). The Company acknowledges and
agrees that the Purchaser shall not be required (i) to exercise its basic
subscription right notwithstanding the provisions of Section 1 of the Purchase
Subscription Certificate and (ii) to tender payment for the Standby Shares at
the time of its delivery of the Purchaser Subscription Certificate to the
Company, notwithstanding the provisions of Section 1 of the "Instructions for
Use of Ladenburg Xxxxxxxx Financial Services Inc. Subscription Rights
Certificates" adopted by the Company for the Rights Offering (the "Subscription
Instructions"). In the event of any inconsistency between the terms of (i) the
Purchaser Subscription Certificate and the Subscription Instructions and (ii)
the terms of this Agreement, the terms of this Agreement shall govern.
(c) The Company will not extend the closing date of the Rights Offering
beyond __________, 2002 without the prior written consent of the Purchaser.
2. The Closing. As soon as practicable following its determination of
the number of Unsubscribed Shares, the Company shall notify the Purchaser of the
number of Standby Shares, if any, to be purchased by the Purchaser pursuant to
Section 1 of the Agreement ("Purchased Shares"). The delivery of the payment for
the Standby Shares shall take place at the office of American Stock Transfer &
Trust Company, the Company's Subscription Agent, in connection with the
consummation of the Rights Offering, which shall be designated by the Company by
oral communication or written notice to the Purchaser (such time and date being
referred to as the "Closing Time," the date of the Closing Time being referred
to as the "Closing Date" and the consummation of the transaction being referred
to as the "Closing").
3. Representation and Warranties.
(a) The Company hereby represents and warrants to the Purchaser as
follows:
(i)The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Florida.
(ii)The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
of the Company, and this Agreement, when duly executed and delivered by the
Purchaser, will constitute a valid and legally binding instrument of the Company
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(iii)The Standby Shares have been duly authorized by all
necessary corporate action of the Company, and when issued in accordance with
such authorization and delivered by the Company against payment therefor will be
validly issued, fully paid and nonassessable; and the Holders have no preemptive
rights with respect to the Standby Shares. The Rights have been duly authorized
by all necessary corporate action of the Company, and when issued in accordance
with such authorization and delivered by the Company, will constitute legal,
valid, binding and enforceable obligations of the Company, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(iv)The execution and delivery of this Agreement, the
consummation by the Company of the transactions herein contemplated and the
compliance by the Company with the terms hereof do not and will not conflict
with, or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, the certificate of incorporation or bylaws of the
Company, or any indenture, mortgage, deed or trust, loan agreement or other
agreement or instrument to which the Company is a party or by which any of its
properties or assets are bound, with such exceptions as would not have a
material adverse effect on the financial condition of the Company, or any
applicable law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over the Company or
any of its properties or assets; and no consent, approval, authorization, order,
registration or qualification of or with any such governmental instrumentality
or court is required for the valid authorization, execution, delivery and
performance by the Company of this Agreement, the issuance of the Rights, the
issuance of the shares of Common Stock upon the exercise of the Rights, except
such as have been obtained under the rules and regulations of the Securities and
Exchange Commission (the "Commission") and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or "blue sky" laws.
(v)A registration statement, including a prospectus, relating
to the Common Stock of the Company has been filed with the Commission and may be
amended. Such registration statement, as it may be amended at the time when it
becomes effective is hereinafter referred to as the "Registration Statement,"
and such prospectus, as then amended, including all material incorporated by
reference therein, as the "Prospectus." When the Registration Statement becomes
effective (the "Effective Time"), the Registration Statement and Prospectus will
conform in all respects to the requirements of the Securities Act of 1933 (the
"Act") and the rules and regulations of the Commission, and neither of such
documents will include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not apply to
statements or omissions in either of such documents based upon written
information furnished to the Company by the Purchaser specifically for use
therein.
(b)The Purchaser hereby represents and warrants to the Company as
follows:
(i)The Purchaser has been duly organized and exists in good
standing as a limited liability company under the laws of the State of Delaware.
(ii)The execution, delivery and performance of this Agreement
by the Purchaser and the consummation by the Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary action of the
Purchaser, and this Agreement, when duly executed and delivered by the
Purchaser, will constitute a valid and legally binding instrument, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(iii)The Purchaser has sufficient cash resources on hand to
purchase the Standby Shares on the terms and conditions contained in this
Agreement.
(iv)No state, federal or foreign regulatory approvals,
permits, licenses, or consents or other contractual or legal obligations are
required in order for the Purchaser to enter into this Agreement or purchase the
Standby Shares.
(v)The execution and delivery of this Agreement, the
consummation by the Purchaser of the transactions herein contemplated and the
compliance by the Purchaser with the terms hereof do not and will not conflict
with, or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, the constituent documents of the Purchaser or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Purchaser is a party or by which any of the Purchaser's
properties or assets are bound, or any applicable law, rule, regulation,
judgment, order or decree of any government, governmental jurisdiction over the
Purchaser or any of Purchaser's properties or assets; and no consent, approval,
authorization, government, governmental instrumentality or court, domestic or
foreign, is required for the valid authorization, execution, delivery and
performance by the Purchaser of this Agreement or the consummation by the
Purchaser of the transactions contemplated by this Agreement.
(vi)The Purchaser understands that its commitment under this
Agreement is not contingent on the commitment of any other Holder or on any
minimum number of shares being issued in the Rights Offering.
(vii)At the Effective Time, the information furnished to the
Company by the Purchaser specifically for use in the Registration Statement and
Prospectus will not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(viii)The Purchaser has reviewed a copy of the Registration
Statement and Prospectus.
4. Closing Conditions. The respective obligations of the Purchaser and
the Company to consummate the purchase and sale of the Standby Shares shall be
subject, in the discretion of the Company or the Purchaser, as the case may be,
to the conditions that (i) all representations and warranties and other
statements of the other party are, at and as of the Closing Time, true and
correct in all material respects, (ii) the other party shall have performed all
of its obligations hereunder theretofore to be performed in all material
respects, and (iii) that the Effective Time of the Registration Statement shall
be no later than 5:30 p.m., New York time, on the date of this Agreement or such
later date as shall have been consented by the Purchaser; and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Purchaser, shall be contemplated by the
Commission.
5. Registration Statement.
(a) The Company shall use best efforts to file promptly with the
Commission, and use commercially reasonable efforts to cause to be declared
effective by the Commission, a registration statement ("Purchase Registration
Statement") to register the Purchased Shares for resale pursuant to the Act. The
Company shall use best efforts to keep such Purchaser Registration Statement
continuously effective and usable until the date on which all of the Purchased
Shares are sold or such earlier date as the Purchased Shares may be resold by
Purchaser without registration under Rule 144(k) under the (the "Final Date").
The Company shall deliver copies of the prospectus included within the Purchaser
Registration Statement ("Purchaser Prospectus") to the American Stock Exchange
pursuant to Rule 153 under the Act and to Purchaser on reasonable request.
(b) Upon the occurrence of any event that would cause the Purchaser
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
Purchased 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 Purchaser 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 Purchaser
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 Purchaser Registration Statement to become usable as soon as
reasonably practicable thereafter.
(c) The Company and Purchaser agree that Purchaser shall be entitled to
enforce specifically the obligations under Section 5 in any court of competent
jurisdiction (this being in addition to any other remedy to which it is entitled
at law or equity).
(d) All fees and expenses incidental to the performance of or
compliance with this Section 5 shall be borne by the Company whether or not the
Purchaser Registration Statement is filed or becomes effective, other than
Purchaser's professional fees and expenses, if any, and underwriting discounts
and commissions and transfer taxes, if any, in respect of the Purchased Shares,
which shall be payable by Purchaser.
6. Indemnification.
(a) The Company will indemnify and hold harmless the Purchaser and each
person, if any, who controls the Purchaser within the meaning of the Act against
any losses, claims, damages or liabilities, joint or several, to which such
Purchaser or such controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, the Purchaser Registration Statement, the Purchaser Prospectus,
any amendment or supplement thereto, any related preliminary prospectus or any
document incorporated by reference in any of the foregoing, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and will reimburse the Purchaser and each such controlling person
for any legal or other expenses reasonably incurred by the Purchaser or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any of such documents in
reliance upon and in conformity with information furnished to the Company by the
Purchaser specifically for use therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
Insofar as the foregoing indemnity agreement, or the representations
and warranties contained in this Agreement, may permit indemnification for
liabilities under the Act of the Purchaser or a member or controlling person of
the Purchaser within the meaning of Section 15 of the Act and who, at the date
of this Agreement, is a director, officer or controlling person of the Company,
the Company has been advised that in the opinion of the Commission such
provisions may be broad enough to contravene Federal public policy as expressed
in the Act and may therefore be unenforceable. In the event that a claim for
indemnification under such agreement or such representations and warranties for
any such liabilities (except insofar as such agreement provides for the payment
by the Company of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such a person, the Company will submit to a court of appropriate
jurisdiction (unless in the opinion of counsel for the Company the matter has
already been settled by controlling precedent) the question of whether or not
indemnification by it for such liabilities is against public policy as expressed
in the Act and therefore unenforceable, and the Company will be governed by the
final adjudication of such issue.
(b) The Purchaser will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement
and who will sign the Purchaser Registration Statement and each person, if any,
who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities to which the Company or any such director,
officer or controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, the Purchaser Registration Statement, the Purchaser Prospectus or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that 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 by the Purchaser specifically for use
therein; and will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. This indemnity agreement will be in addition to any liability which the
Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
(d) If recovery is not available under the foregoing indemnification
provisions of this Section, for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the extent that contribution
is not permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by each party from the transactions
contemplated by this Agreement, the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
the opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The Company and
the Purchaser agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation. Neither the
Purchaser or nor any person controlling the Purchaser shall be obligated to make
contribution hereunder which in the aggregate exceeds the total Subscription
Price of the Common Stock purchased by the Purchaser pursuant to this Agreement,
less the aggregate amount of any damages which the Purchaser and its controlling
persons have otherwise been required to pay in respect of the same claim or any
substantially similar claim.
7. Termination.
(a) Either of the parties hereto may terminate this Agreement (i) if
the transactions contemplated hereby are not consummated by __________, 2002
through no fault of the Purchaser or (ii) in the event that the Company is
unable to obtain any required approvals for the transactions contemplated hereby
to be undertaken by it on conditions reasonably satisfactory to it despite its
reasonable efforts to obtain such approvals. In addition, this Agreement shall
terminate upon mutual consent of the parties hereto.
(b) The Company and the Purchaser hereby agree that any termination of
this Agreement pursuant to Section 6(a), or the termination of the Rights
Offering for any reason whatsoever by the Company (other than termination in the
event of a breach of this Agreement by the Purchaser or misrepresentation of any
of the statements made herein by the Purchaser) shall be without liability of
the Company or the Purchaser.
8. Notices. All communications hereunder shall be in writing and, if to
the Company, shall be mailed, delivered or telecopied and confirmed to it at:
Ladenburg Xxxxxxxx Financial Services Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
If to the Purchaser, shall be mailed, delivered or telecopied and
confirm to it at:
New Valley Corporation
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
In either case, with a copy to:
Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx Xxxxxx
Facsimile: (000) 000-0000
9. Binding Effects. This Agreement shall be binding upon, and shall
inure solely to the benefit of, each of the parties hereto, and each of their
respective heirs, executors, administrators, successors and permitted assigns,
and no other Person shall acquire or have any right under or by virtue of this
Agreement. The Purchaser may not assign its rights and obligations hereunder.
10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York in effect at the time of
the execution hereof.
11. Entire Agreement. This Agreement represents the entire
understanding of the parties with respect to the matters addressed herein and
supersedes all prior written and oral understandings concerning the subject
matter herein.
12. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which counterparts when so executed and
delivered shall be deemed to be an original, but all such respective
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, and intending to be legally bound thereby, each of
the Purchaser and the Company has signed or caused to be signed its name as of
the day and year first above written.
LADENBURG XXXXXXXX FINANCIAL SERVICES INC.
By: _______________________________________
Name:
Title:
NEW VALLEY CORPORATION
By: _______________________________________
Name:
Title:
