Agreement, dated April 13, 2005



 






EXHIBIT 10.2




April 13, 2005



Andrew Whittaker

Executive Vice President

Jefferies & Company, Inc.

11100 Santa Monica Boulevard

10th Floor

Los Angeles, California 90025



Dear Andrew:




     On the terms set forth in the Master Securities Loan Agreement dated as of April 13, 2005 (the
“Loan Agreement”), between the undersigned and Jefferies & Company, Inc. (“Jefferies”), and for
other good and valuable consideration, the receipt of which is hereby acknowledged, notwithstanding
any other agreement, the undersigned has agreed to lend or re-lend, in case the loan is terminated,
to Jefferies 300,000 shares (the “Borrowed Shares”) of common stock of Vector Group
Ltd., a Delaware corporation (“Vector”), owned beneficially and of record by the undersigned. The
undersigned hereby agrees not to dispose of or encumber or otherwise impair in any fashion at any
time, the availability of such Borrowed Shares during the Availability Period. The “Availability
Period” shall mean the period commencing on November 18, 2004 and ending on the date that is thirty
(30) months after the date thereof. The undersigned also will use commercially reasonable efforts
to cooperate with Vector to assure that the Form S-3 registration statement relating to the
Borrowed Shares is available and effective for the loan of the Borrowed Shares during the
Availability Period.



     Notwithstanding any of the covenants or agreements set forth herein, in no event shall any
such covenants or agreements: (1) prohibit the undersigned from selling or otherwise disposing of
any or all of the Borrowed Shares in a “Change of Control Transaction” (as such term is defined
herein) or (2) affect or be deemed to affect the rights and obligations of Mr. Lorber as a director
or officer of Vector (including relating to any Board of Director vote), or the right of the
undersigned or any affiliate thereof to vote any shares of common stock of Vector owned thereby, in
favor of any Change of Control Transaction (provided that if any affiliate of the undersigned
acquires the Borrowed Shares pursuant to a transaction described in the first bullet point below,
such affiliate shall assume the obligations hereunder) or on any other matter in the sole
discretion of the undersigned or any such affiliate, provided, however, that the
rights of the undersigned or any affiliate thereof set forth in this sentence do not alter the
undersigned’s or any such affiliate’s obligation to loan to Jefferies, and not to dispose of, any
new or different security exchanged for the Borrowed Shares in connection with a recapitalization,
merger, consolidation, stock purchase or other corporate action. For purposes of this letter, a
“Change of Control Transaction” means:



 









 






	 	•  	the acquisition by any “person” or group under Section 13(d)(3) of the Exchange Act
(collectively, “Person”) unaffiliated with Mr. Lorber of beneficial ownership, directly
or indirectly, through a purchase, merger, or other acquisition transaction or series
of transactions, of shares of Vector’s capital stock entitling such Person to exercise
more than 50% of the total voting power of all shares of Vector’s capital stock
entitling the holders thereof to vote generally in elections of directors, or
	 
	 	•  	any consolidation of Vector with, or merger of Vector into, any other Person, any
merger of another Person into Vector, or any sale or transfer of all or substantially
all of Vector’s assets to another Person, other than a merger or sale of assets that
(x) is effected solely to change Vector’s jurisdiction of incorporation and results in
a reclassification, conversion, or exchange of outstanding shares of common stock
solely into shares of common stock, or (y) does not have the result that Vector’s
shareholders immediately before such transaction beneficially own, directly or
indirectly, immediately following such transaction, less than 50% of the combined total
voting power of all shares of capital stock of the Person resulting from such
transaction entitling the holders thereof to vote generally in elections of directors.




2









 











     This Letter and the Loan Agreement shall terminate in the event that: (i) Vector has redeemed
all of Vector’s issued and outstanding 5% Variable Interest Senior Convertible Notes due 2011 (the
“Notes”) in accordance with the terms of the indenture governing the Notes, or (ii) all of the
issued and outstanding Notes have been converted by the holders thereof into commonstock of Vector
in accordance with the terms of the indenture governing the Notes.


	 	 	 	 	 
	 	LORBER EPSILON 1999 LIMITED PARTNERSHIP

 	 
	 	By:  	LORBER EPSILON 1999 LLC,
 	 
	 	 	Its General Partner 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	                             /s/ Howard M. Lorber
 	 
	 	 	Howard M. Lorber 	 
	 	 	Manager 	 
	 





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