EXHIBIT 10.3
AMENDMENT TO PLEDGE
AND SECURITY AGREEMENT
This Amendment to Pledge and Security Agreement is dated as of April
30, 2002 (this "Amendment") and amends the Pledge and Security Agreement, dated
as of May 14, 2001 (as amended, supplement or modified from time to time, the
"VGR Pledge and Security Agreement"), between VGR Holding Inc., a Delaware
corporation (the "Company"), and The Bank of New York, as successor in interest
to United States Trust Company of New York, a New York banking corporation, as
Collateral Agent on behalf of the Holders of the 10% Senior Secured Notes due
March 31, 2006 (the "Notes"). Capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the VGR Pledge and Security
Agreement.
WHEREAS, pursuant to the Second Amendment to Note Purchase Agreement
and New Note Purchase Agreement (the "New Note Purchase Agreement"), dated as
of the date hereof, by and among the Company and the other signatories thereto,
the Company and the Majority Holders have approved the issuance of an
additional $30,000,000 in Notes and desire to amend the VGR Pledge and Security
Agreement as set forth herein; and
WHEREAS, the Company will realize direct and indirect benefits as a
result of the New Note Purchase Agreement and the other Note Documents and the
transactions described therein.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. AMENDMENTS TO VGR PLEDGE AND SECURITY AGREEMENT.
(a) The following definitions in Section 1 of the VGR Pledge and
Security Agreement are hereby amended by deleting such definitions in their
entirety and inserting in lieu thereof the following:
"'Commercial Tort Claim' has the meaning ascribed thereto in the
Uniform Commercial Code.
'VTUSA' shall mean Vector Tobacco Inc., a Virginia corporation."
(b) The following definitions are hereby added to the VGR Pledge
and Security Agreement:
"'Brands' means Vector Xxxxxxx Brands Inc., a Delaware corporation,
and any successor thereto.
'Brands Convertible Securities' means any securities that are
convertible into or exchangeable for Equity Interests of Brands.
'Initial Pledged Brands Shares' means all Equity Interests of Brands
represented by the certificates of Brands identified in Annex 1 hereto."
(c) The definition of "Secured Obligations" in Section 1 of the
VGR Pledge and Security Agreement is hereby amended by deleting the definition
of "Secured Obligations" in its entirety and inserting in lieu thereof the
following:
"'Secured Obligations' means, collectively, all obligations and
liabilities of any kind or nature, present or future, absolute or contingent,
of (i) the Company arising under the Note Documents, (ii) NV Holdings arising
under the NV Holdings Pledge Agreement or any other undertaking or agreement
delivered by NV Holdings in connection with any other Note Document, (iii)
VTUSA arising under any undertaking or agreement delivered by VTUSA in
connection with any Note Document, (iv) Brooke Overseas arising under any
undertaking or agreement delivered by Brooke Overseas in connection with any
Note Document, (v) New Valley arising under any undertaking or agreement
delivered by New Valley in connection with any Note Document, (vi) Brooke
Holding arising under the Brooke Holding Pledge Agreement or any other
undertaking or agreement delivered by Brooke Holding in connection with any
other Note Document, (vii) Research arising under any undertaking or agreement
delivered by Research in connection with any Note Document, (viii) Vector
arising under the Vector Pledge Agreement or any other undertaking or agreement
delivered by Vector in connection with any other Note Document, (ix) Xxxxxxx
arising under the Xxxxxxx Guarantee, the Xxxxxxx Subordination Agreement or any
other undertaking or agreement delivered by Xxxxxxx in connection with any
other Note Document and (x) Brands arising under any undertaking or agreement
delivered by Brands in connection with any Note Document."
(d) Section 2(o) of the VGR Pledge and Security Agreement is
hereby amended by deleting Section 2(o) in its entirety and inserting in lieu
thereof the following:
"(o) as of the date hereof: (i) there are 22,881,406 shares of New
Valley Common Stock issued and outstanding and such shares are the only issued
and outstanding Equity Interests of New Valley and (ii) there are no issued and
outstanding New Valley Convertible Securities, and New Valley is not subject to
any obligation, contingent or otherwise, to issue in the future any additional
Equity Interests or any such New Valley Convertible Securities except:
(1) warrants exercisable for 17,867,499 shares of New
Valley Common Stock; and
(2) options to purchase 65,333 shares of New Valley
Common Stock and options to purchase warrants
exercisable for 584,000 shares of New Valley Common
Stock."
(e) Section 2 of the VGR Pledge and Security Agreement is hereby
amended by adding the following clauses:
"(kk) as of April 30, 2002, (i) the Initial Pledged Brands Shares
are the only issued and outstanding Equity Interests of Brands and (ii) there
are no issued and outstanding
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Brands Convertible Securities, and Brands is not subject to any obligation,
contingent or otherwise, to issue in the future any additional Equity Interests
or any such Brands Convertible Securities; and
(ll) the Initial Pledged Brands Shares are duly authorized,
validly issued, fully paid and nonassessable."
(f) Article 5 of the VGR Pledge and Security Agreement is hereby
amended by adding Section 5.18 as follows:
"5.18 Commercial Tort Claims The Company shall promptly notify the
Collateral Agent of any Commercial Tort Claims it possesses promptly upon
obtaining actual knowledge that it possesses such Commercial Tort Claim and
shall upon the request of the Collateral Agent or the Majority Holders execute
and deliver all agreements, instruments, financing statements and other
documents necessary for the Collateral Agent to perfect a security interest in
such Commercial Tort Claim."
(g) The Annexes to the VGR Pledge and Security Agreement are
hereby deleted in their entirety and replaced with the Annexes attached
hereto.
2. CONFIRMATION OF LIEN. The Company hereby confirms that
pursuant to the VGR Pledge and Security Agreement, as amended by this
Amendment, the Company has granted a lien on and a security interest in the
Collateral as collateral security for the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) and performance of
the Secured Obligations.
3. REPRESENTATIONS AND WARRANTIES. The Company hereby represents
and warrants that the representations and warranties in Section 2 of the VGR
Pledge and Security Agreement, are true and correct in all material respects as
of the date hereof (except to the extent that any such representations or
warranties apply to conditions existing at a particular date).
4. LIMITED EFFECT. Except as expressly amended and modified by
this Amendment, the VGR Pledge and Security Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
5. REFERENCE TO VGR PLEDGE AND SECURITY AGREEMENT. Each
reference in the VGR Pledge and Security Agreement to "this Agreement",
"hereunder", "hereof", "herein", or words of like import referring to the VGR
Pledge and Security Agreement, and each reference in the Note Documents and all
ancillary documents thereto to the "BGLS Pledge Agreement," "thereunder",
"thereof", or words of like import shall mean and be a reference to such Brooke
Pledge and Security Agreement as amended by this Amendment.
6. SUCCESSORS. All agreements of the parties to this Amendment
and Purchase Agreement shall bind their respective successors.
7. COUNTERPARTS. This Amendment may be executed in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Amendment
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by facsimile or electronic mail transmission shall be effective as delivery of
a manually executed counterpart of this Amendment.
8. GOVERNING LAW. THIS AMENDMENT AND ALL ISSUES HEREUNDER SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
9. SEVERABILITY. In case any one or more of the provisions in
this Amendment shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
10. HEADINGS. The headings of the Sections of this Amendment have
been inserted for convenience of reference only, are not to be considered a
part of this Amendment and shall in no way modify or restrict any of the term
or provisions of this Amendment.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
VGR HOLDING INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
THE BANK OF NEW YORK, as Collateral Agent
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Authorized Signatory
ANNEX 1
PLEDGED STOCK
ISSUER Certificate Nos. REGISTERED OWNER NUMBER OF SHARES
------ ---------------- ---------------- ----------------
New Valley Corporation NV 1712 VGR Holding Inc. 83,628 shares of common
stock, par value $.01
per share.
New Valley Corporation NV 1710 VGR Holding Inc. 1,974 shares of common
stock, par value $.01
per share.
New Valley Corporation W 2096 VGR Holding Inc. 5,924 warrants to
purchase shares of
Common Stock, par value
$.01 per share.
New Valley Corporation W 2098 VGR Holding Inc. 1,254,425 warrants to
purchase shares of
Common Stock, par value
$.01 per share.
Vector Tobacco Inc. 1 VGR Holding Inc. 100 shares of common
stock, par value $.01
per share.
Brooke (Overseas) Ltd. 2 VGR Holding Inc. 10 shares of common
stock, par value $.01
per share.
Vector Research Ltd. 2 VGR Holding Inc. 100 shares, $.01 par
value per share.
Brooke Group Holding Inc. 2 VGR Holding Inc. 1,000 shares, $.10 par
value per share.
New Valley Holdings, Inc. 1 VGR Holding Inc. 100 shares, $.01 par
value per share.
Xxxxxxx Vector Brands Inc. 1 VGR Holding Inc. 100 shares, $.01 par
value per share.
ANNEX 2
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
UNIFORM COMMERCIAL CODE FILINGS
Delaware Secretary of State
PATENT AND TRADEMARK FILINGS
None
ACTIONS WITH RESPECT TO STOCK COLLATERAL
Delivery to Collateral Agents of certificates representing Pledged Stock in the
State of New York along with a stock power endorsed in blank.
OTHER ACTIONS
1. Execution and delivery of the Account Control Agreement by the Company,
the Collateral Agent and the securities intermediary party thereto.
2. Delivery of pledged notes to the Collateral Agent in New York with
effective endorsements in blank.
ANNEX 3
CHIEF EXECUTIVE OFFICE
LIST OF LOCATIONS
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
ANNEX 4
INTELLECTUAL PROPERTY
None.
ANNEX 5
INSTRUMENTS
$175,000,000 Secured Revolving Demand Promissory Note, dated as of March 6, 2001
(as amended, supplemented or otherwise modified from time to time), made by
Vector Tobacco Inc. and Vector Tobacco Ltd. in favor of VGR Holding Inc. and
Vector Group Ltd.
ANNEX 6
DEPOSIT ACCOUNTS
Account #01596108029 at Bank of America, N.A.
