Back to top

ESCROW RELEASES PURCHASE AGREEMENT

Release Agreement

ESCROW RELEASES PURCHASE AGREEMENT | Document Parties: QVT Associates GP LLC | QVT Associates LP | Star Scientific, Inc | Star Tobacco, Inc | Whitebox Hedged High Yield Partners, LP You are currently viewing:
This Release Agreement involves

QVT Associates GP LLC | QVT Associates LP | Star Scientific, Inc | Star Tobacco, Inc | Whitebox Hedged High Yield Partners, LP

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: ESCROW RELEASES PURCHASE AGREEMENT
Governing Law: New York     Date: 3/16/2007
Industry: Tobacco     Law Firm: Latham Watkins     Sector: Consumer/Non-Cyclical

ESCROW RELEASES PURCHASE AGREEMENT, Parties: qvt associates gp llc , qvt associates lp , star scientific  inc , star tobacco  inc , whitebox hedged high yield partners  lp
50 of the Top 250 law firms use our Products every day

Exhibit 10.91

ESCROW RELEASES

PURCHASE AGREEMENT

BY AND BETWEEN

QVT Associates LP

Whitebox Hedged High Yield Partners, LP

Star Scientific, Inc.

Star Tobacco, Inc.

 


TABLE OF CONTENTS

 

1.   Definitions.    1
2.   Basic Transaction .    2
3.  

Representations and Warranties of the Sellers . The Sellers represent and warrant to the Purchasers that the statements contained in this Section 3 are true, correct and complete as of the Effective Date and as of the 2006 Payment Effective Date.

   3
4.  

Representations and Warranties of the Purchasers . The Purchasers represent and warrant to the Sellers the that the statements contained in this Section 4 are true, correct and complete as of the Closing Date.

   5
5.   Other Covenants .    6
6.   Miscellaneous .    8

EXHIBITS

Exhibit A Escrow Accounts

Exhibit B Form of Acknowledgement

Exhibit C Form of Opinion from Sellers’ Counsel

 


ESCROW RELEASES PURCHASE AGREEMENT

This Escrow Releases Purchase Agreement is entered into on March 14, 2007 (the “ Effective Date ”), by and between QVT Associates LP, a limited partnership formed under the laws of the State of Delaware and Whitebox Hedged High Yield Partners, LP, a limited partnership formed under the laws of the British Virgin Islands (collectively, the “ Purchasers ”) and Star Scientific, Inc., a Delaware corporation (“ STSI ”) and Star Tobacco, Inc., a Virginia corporation (“ STI ”) (collectively, the “ Sellers ”). The Purchasers and the Sellers are referred to collectively herein as the “ Parties .”

This Agreement contemplates a transaction in which the Purchasers will purchase all Sellers’ right, title and interest in and to all income from and reversionary interests in the escrow accounts identified on Exhibit A, which were established by the Sellers on behalf of STI as a non-participating manufacturer under state statutes adopted substantially in the form of the Model Statute set forth on Exhibit T to the Master Settlement Agreement between the major tobacco companies and each state in the United States and the District of Columbia, other than the states of Virginia, Texas, Louisiana and Minnesota (the “ Escrow ”).

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

1. Definitions.

(a) “ Acknowledgement ” has the meaning set forth in Section 2(c)(i) below.

(b) “ Assigned Interests ” means all of the right, title, and interest in and to (a) the Principal and the 2006 Payments; and (b) the interest in all income generated by and other appreciation of the Principal and, upon the deposit thereof, the 2006 Payments.

(c) “ Closing ” has the meaning set forth in Section 2(c) below.

(d) “ Closing Date ” has the meaning set forth in Section 2(c) below.

(e) “ Escrow ” has the meaning set forth in the preamble above.

(f) “ Escrow Agent ” means Branch Banking & Trust Company.

(g) “ Escrow Agreement ” means the agreements between the Sellers and the Escrow Agent under which the escrow accounts identified on Exhibit A were established and as of the Closing Date are maintained.

(h) “ Escrow Claims ” has the meaning set forth in Section 5(c) below.

(i) “ Knowledge ” means actual knowledge after reasonable inquiry.

 


(j) “ Law ” means a law, order, ruling, rule, regulation, writ, assessment, injunction, judgment or decree.

(k) “ Material Adverse Effect ” means the ability of a Party to consummate the transactions contemplated by this Agreement or a material adverse change in the value of the Escrow.

(l) “ Notice of Election ” has the meaning set forth in Section 5(c)(ii) below.

(m) “ Party ” has the meaning set forth in the preamble above.

(n) “ Person ” means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

(o) “ Principal ” means the reversionary interest in all amounts deposited in the Escrow prior to March 13, 2007.

(p) “ Purchase Price ” has the meaning set forth in Section 2(b) below.

(q) “ Purchasers ” has the meaning set forth in the preamble above.

(r) “ SEC Documents ” means Sellers’ Annual Report on Form 10-K/A for the fiscal year ended December 31, 2005, Sellers’ Quarterly Reports on Form 10-Q for the periods ended March 31, 2006, June 30, 2006, and September 30, 2006, and each current report on Form 8-K filed by Sellers since January 1, 2005.

(s) “ Sellers ” has the meaning set forth in the preamble above.

(t) “ 2006 Payments ” mean the Sellers’ deposits to be made into Escrow on or about April 15, 2007 pursuant to state statutes adopted substantially in the form of the Model Statute set forth on Exhibit T to the Master Settlement Agreement between the major tobacco companies and each state in the United States other than Virginia, Texas, Louisiana and Minnesota; provided, however, that the 2006 Payments shall not exceed $700,000.

2. Basic Transaction .

(a) Purchase and Sale . On and subject to the terms and conditions of this Agreement, the Purchasers hereby purchase from the Sellers, and the Sellers hereby sell, transfer, convey, and deliver to the Purchasers, all of Sellers’ right, title and interest in and to the Assigned Interests free and clear of all liens, pledges, charges, or encumbrances of any kind or nature against delivery of the consideration specified in Section 2(b)(i), and when the 2006 Payments are deposited, Section 2(b)(ii).

(b) Purchase Price . The Purchasers agree to pay Sellers an amount equal to: (i) the product of thirty cents ($.30) and the Principal as of the Closing Date; plus (ii) the product of thirty cents ($.30) and the amount of the 2006 Payments when deposited into the Escrow.

 

-2-

 


(c) The Closing . The closing of the purchase and sale provided for herein (the Closing ” ) occurred simultaneously with the execution of this Agreement (the date of such execution and Closing, the Closing Date ” ) at Latham & Watkins, LLP, 555 11 th Street, N.W., Suite 1000, Washington, D.C. 20004 and shall be effective as of 4.30 p.m. Eastern Time on the Closing Date. At the Closing:

(i) the Sellers delivered to Purchasers the notice, instruction, acknowledgement and Account Control Agreement (the “ Acknowledgement ”) in the form of Exhibit B hereto executed by Sellers and the Escrow Agent;

(ii) the Sellers provided the Purchasers an opinion from outside counsel that was acceptable to the Purchasers in the form of Exhibit C hereto;

(iii) the Purchasers delivered to the Sellers the consideration specified in clause (i) of Section 2(b) above by wire transfer in same day funds into an account designated in writing by Sellers; and

(iv) the Sellers shall deliver, or cause to be delivered, to the Purchaser an executed affidavit, dated not more than thirty (30) days prior to the Closing Date, in accordance with Code Section 1445(b)(2) and Treasury Regulation Section 1.1445-2(b), which statement certifies that such Person is not a foreign person and sets forth such Person’s name, taxpayer identification number and address.

(d) 2006 Payments .

(i) Sellers shall deposit the 2006 Payments into the applicable Escrow Accounts no later than April 16, 2007.

(ii) Purchasers shall deliver to the Sellers the consideration specified in Section 2(b)(ii) above into an account designated in writing by Sellers upon written confirmation from the Escrow Agent that the 2006 payments have been deposited into the applicable Escrow Accounts (the date of such confirmation being the “2006 Payment Effective Date”).

(iii) For purposes of clarity, nothing in this Agreement provides Purchasers the right to 2006 Payments in excess of $700,000 or obligate the Purchasers to pay a Purchase Price based on 2006 Payments of more than $700,000.

3. Representations and Warranties of the Sellers . The Sellers represent and warrant to the Purchasers that the statements contained in this Section 3 are true, correct and complete as of the Effective Date and as of the 2006 Payment Effective Date.

(a) Incorporation . STSI is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and STI is a corporation duly organized, validly existing, and in good standing under the laws of the State of Virginia. The Sellers have not received a written notification that any proceeding has been instituted in any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification, and to the Sellers’ Knowledge, no proceeding has been instituted in any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. The Sellers are not in violation of their charter or bylaws.

 

-3-

 


(b) Authorization of Transaction . The Sellers have full power and authority to execute and deliver this Agreement and to perform their obligations hereunder. Without limiting the generality of the foregoing, the respective Boards of Directors of each of the Sellers have duly authorized the execution, delivery, and performance of this Agreement by the Sellers. This Agreement constitutes the valid and legally binding obligation of the Sellers, enforceable in accordance with its terms and conditions.

(c) Noncontravention . To the Knowledge of the Sellers, the consummation of the transactions contemplated herein will not result in: (i) any violation of the certificate of incorporation or bylaws of the Sellers; (ii) a breach or violation of any of the terms and provisions of, or constitute a default under any contract, agreement, license, understanding, indenture, mortgage, deed of trust, loan agreement, joint venture, lease (including without limitation any sale and leaseback arrangement) or bond, debenture, note or other evidence of indebtedness, to which a Seller is a party or by or to which it or the Assigned Interests are or may be bound or subject; or (iii) a breach or violation of any Law of any government or governmental court, agency or body having jurisdiction over the Sellers or the Assigned Interests. For purposes of clarity and not qualification of the representation and warranty contained in this Section 3(c), Sellers shall remain as parties to the Escrow Agreement as required by the Model Statue but upon the Closing, shall have no right, title or interest in or to the Assigned Interests; upon the Closing, Purchasers shall own and control the Assigned Interests free and clear of all liens, claims, pledges and encumbrances of any kind or nature, and the Sellers shall have no further rights, interests or liens in the Assigned Interests.

(d) Ownership . Except as set forth in the SEC Documents, the Sellers have good and valid title to the Assigned Interests, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest, whether imposed by agreement, contract, understanding, law, equity or otherwise, except to the extent otherwise set forth in the Escrow Agreements. Upon delivery of the full consideration as set forth in Section 2(b), Purchasers will have good and valid title to all of Sellers’ rights, title and interest in and to the Assigned Interests and no further act nor thing need occur to transfer such rights, title and interest to the Purchasers.

(e) SEC Documents . STSI has filed in a timely manner all documents that STSI was required to file under the Securities and Exchange Act of 1934 during the 12 months period ending on the Closing Date. As of their respective filing dates, the SEC Documents complied or, when filed will comply in all material respects with the requirements of the Securities and Exchange Act of 1934 or the Securities Act of 1933, as applicable, and none of the SEC Documents contained or, when filed, will contain any untrue statement of a material fact or omitted or, when filed, will omit to state a material fact requir


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more