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EXHIBIT 10.8
LIMITED RECOURSE GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Guarantee"), dated as of
March 2, 1998 is made by Brooke (Overseas) Ltd., a Delaware corporation (the
"Guarantor"), for the equal and ratable benefit of AIF II, L.P., a Delaware
limited partnership ("AIF II") and ARTEMIS AMERICA PARTNERSHIP, a Delaware
limited partnership (as successor to Artemis America, LLC, a Delaware limited
liability company) (collectively, with AIF II, the "Participating Holders").
R E C I T A L S:
WHEREAS, BGLS Inc., a Delaware corporation (the "Company"),
has entered into the Indenture (as amended, modified, supplemented and in
effect from time to time, the "Indenture") dated as of January 1, 1996 between
the Company and State Street Bank and Trust Company (as successor to Fleet
National Bank of Massachusetts), as trustee (the "Trustee");
WHEREAS, pursuant to the terms and conditions of the
Standstill Agreement dated as of March 2, 1998 between the Company and the
Participating Holders (the "Standstill Agreement"), the Participating Holders
have agreed to defer the payment of interest due to the Participating Holders
under the Indenture until the occurrence of a Termination Event (as defined in
the Standstill Agreement);
WHEREAS, it is a condition to the Participating Holders
entering into the Standstill Agreement that the Guarantor shall have (i)
pledged certain securities to the Participating Holders pursuant to Pledge
Agreements dated as of the date of this Guarantee (the "Pledge Agreements") and
(ii) guaranteed for the benefit of the Participating Holders the Company's
obligations under the Series B Senior Secured Notes (as defined below); and
WHEREAS, the Guarantor, expects to receive substantial
benefits from the performance of the Standstill Agreement;
NOW, THEREFORE, to induce the Participating Holders to enter
into the Standstill Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Guarantor has
agreed to guarantee the Guaranteed Obligations (as defined below) upon the
terms and conditions of this Guarantee. Accordingly, the parties hereto agree
as follows:
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Section 1. Definitions and Interpretation.
1.1 Definitions. Unless otherwise defined, all
capitalized terms used in this Guarantee that are defined in the Indenture
(including those terms incorporated therein by reference) shall have the
respective meanings set forth in the Indenture. In addition, the following
terms shall have the following meanings under this Guarantee:
"Guaranteed Obligations" means any and all
obligations of the Company for the payment of all amounts, liabilities
and indebtedness (whether for principal, interest (including interest
at the post-default rate, fees, charges, indemnification or otherwise)
now or in the future owed to the Participating Holders under the
Indenture, the Series B Senior Secured Notes and the Standstill
Agreement and any extensions, renewals or modifications of any of the
foregoing, and for the performance by the Company of its agreements,
covenants and undertakings, under or in respect of the Indenture, the
Series B Senior Secured Notes and the Standstill Agreement and any
renewals, extensions or modifications of any of the foregoing.
1.2 Interpretation. In this Guarantee, unless otherwise
indicated, the singular includes the plural and plural the singular; words
importing any gender include the other gender; references to statutes or
regulations are to be construed as including all statutory or regulatory
provisions consolidating, amending or replacing the statute or regulation
referred to; references to "writing" include printing, typing, lithography and
other means of reproducing words in a tangible visible form; the words
"including", "includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to articles, sections (or subdivisions
of sections), exhibits, annexes or schedules are to this Guarantee; references
to agreements and other contractual instruments shall be deemed to include all
subsequent amendments, extensions and other modifications to such instruments
(without, however, limiting any prohibition on any such amendments, extensions
or modifications by the terms of this Guarantee); and references to Persons
include their respective permitted successors and assigns and, in the case of
Governmental Persons, Persons succeeding to their respective functions and
capacities.
Section 2. The Guarantee.
2.1 The Guarantee. The Guarantor hereby guarantees to
each of the Participating Holders the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the Guaranteed
Obligations. The Guarantor hereby further agrees that if the Company shall fail
to pay in full when due (whether at stated maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, the Guarantor will promptly pay
the same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
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2.2 Obligations Unconditional. The obligations of the
Guarantor under Section 2.1 are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of the Indenture,
the Series B Senior Secured Notes or any other agreement or instrument referred
to herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 2.2 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not alter or impair the liability of the Guarantor
hereunder which shall remain absolute and unconditional as described above:
1. at any time or from time to time, without notice
to the Guarantor, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
2. any of the acts mentioned in any of the
provisions of the Indenture, the Series B Senior Secured Notes, the
Standstill Agreement or any other agreement or instrument referred to
herein or therein shall be done or omitted;
3. the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations shall be
modified, supplemented or amended in any respect, or any right under
the Indenture, the Series B Senior Secured Notes, the Standstill
Agreement or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
4. any lien or security interest granted to, or in
favor of, the Participating Holders as security for any of the
Guaranteed Obligations (including, without limitation, those granted
under the Pledge Agreement) shall fail to be perfected.
The Guarantor hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that the
Participating Holders exhaust any right, power or remedy or proceed against the
Company under the Indenture, the Series B Senior Secured Notes, the Standstill
Agreement or any other agreement or instrument referred to herein or therein,
or against any other Person under any other guarantee of, or security for, any
of the Guaranteed Obligations.
2.3 Reinstatement. The obligations of the Guarantor
under this Section 2 shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of the Company in respect of
the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in
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bankruptcy or reorganization or otherwise, and the Guarantor agrees that it
will indemnify each of the Participating Holders on demand for all reasonable
costs and expenses (including, fees of counsel) incurred by each of the
Participating Holders in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
2.4 Subrogation. Until the Guaranteed Obligations have
been satisfied in full, the Guarantor hereby waives all rights of subrogation
or contribution, whether arising by contract or operation of law (including any
such right arising under the Federal Bankruptcy Code) or otherwise by reason of
any payment by it pursuant to the provisions of this Section 2.
2.5 Remedies. The Guarantor agrees that, as between the
Guarantor and each of the Participating Holders, the obligations of the Company
under the Indenture and the Series B Senior Secured Notes (including the
obligations under the Standstill Agreement) may be declared to be forthwith due
and payable as provided in Section 7.02 of the Indenture (and shall be deemed
to have become automatically due and payable in the circumstances provided in
said Section 7.02) and Section 7 of the Termination Agreement for purposes of
Section 2.1 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically
due and payable) as against the Company and that, in the event of such
declaration (or such obligations being deemed to have become automatically due
and payable), such obligations (whether or not due and payable by the Company)
shall forthwith become due and payable by the Guarantor for purposes of said
Section 2.1.
2.6 Separate Action. The Participating Holders may bring
and prosecute a separate action or actions against the Guarantor whether or not
the Company, any other guarantor or any other Person is joined in any such
action or a separate action or actions are brought against the Company, any
other guarantor, any other Person, or any collateral for all or any part of the
Guaranteed Obligations. The obligations of the Guarantor under, and the
effectiveness of, this Guarantee are not conditioned upon the existence or
continuation of any other guarantee (including any letter of credit) of all or
any part of the Guaranteed Obligations.
2.7 Instrument for the Payment of Money; Post-Default
Interest. The Guarantor hereby acknowledges that the guarantee in this Section
2 constitutes an instrument for the payment of money, and consents and agrees
that each of the Participating Holders, at each Participating Holder's sole
option, in the event of a dispute by the Guarantor in the payment of any moneys
due hereunder, shall have the right to bring motion-action under New York CPLR
Section 3213. In addition, the Guarantor hereby agrees that in the event it
shall fail to pay in full any amount owing by it hereunder on the date upon
which the same shall become due (whether upon demand or otherwise), it shall be
obligated to pay interest at the post-default rate in respect of such amount
for each day during the period from and including the due date thereof to but
excluding the date the same shall be paid in full, such interest to be payable
upon demand of the Participating Holders.
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2.8 Continuing Guarantee. The guarantee in this Section
2 is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
Section 3. Representations and Warranties. The Guarantor
represents and warrants to each of the Participating Holders that:
3.1 Corporate Existence. The Guarantor is a corporation
duly organized and validly existing under the laws of the state of Delaware and
has all requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted.
3.2 No Breach. None of the execution and delivery of
this Guarantee, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or by-laws of the
Guarantor, or any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency, or any agreement or
instrument to which the Guarantor or any of its Subsidiaries is a party or by
which any of them is bound or to which any of them is subject, or constitute a
default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any of the revenues or assets of the Guarantor or
any of its Subsidiaries pursuant to the terms of any such agreement or
instrument.
3.3 Corporate Action. The Guarantor has all necessary
corporate power and authority to execute, deliver and perform its obligations
under this Guarantee; the execution, delivery and performance by the Guarantor
of this Guarantee have been duly authorized by all necessary corporate action
on its part; and this Guarantee has been duly and validly executed and
delivered by the Guarantor and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.
3.4 Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or regulatory
authority or agency, or any securities exchange are necessary for the
execution, delivery or performance by the Guarantor of this Guarantee or for
the validity or enforceability hereof.
Section 4. Miscellaneous.
4.1 No Waiver. No failure on the part of any of the
Participating Holders to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by any of the
Participating Holders of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any
remedies provided by law.
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4.2 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified for the Company in the
Indenture or, as to either party, at such other address as shall be designated
by such party in a notice to the other party. Except as otherwise provided in
this Guarantee, all such communications shall be deemed to have been duly given
when transmitted by telecopier or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.
4.3 Expenses. The Guarantor agrees to reimburse each of
the Participating Holders for all reasonable costs and expenses of such
Participating Holder (including, the reasonable fees and expenses of legal
counsel) in connection with (a) any Event of Default and any enforcement or
collection proceeding resulting therefrom, including, all manner of
participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (b) the enforcement of this Section
4.3.
4.4 Amendments, Etc. The terms of this Guarantee may be
waived, altered or amended only by an instrument in writing duly executed by
the Guarantor and each of the Participating Holders. Any such amendment or
waiver shall be binding upon the Participating Holders, each holder of any of
the Guaranteed Obligations and the Guarantor.
4.5 Successors and Assigns. This Guarantee shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Guarantor, the Participating Holders, and each holder of any of the
Guaranteed Obligations (provided, however, that the Guarantor shall not assign
or transfer its rights hereunder without the prior written consent of each of
the Participating Holders).
4.6 Captions. The captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Guarantee.
4.7 Counterparts. This Guarantee may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and either of the parties hereto may execute this Guarantee
by signing any such counterpart.
4.8 Governing Law; Submission to Jurisdiction. This
Guarantee shall be governed by, and construed in accordance with, the law of
the State of New York. The Guarantor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of the Supreme Court of the State of New York sitting in New York
County (including its Appellate Division), and of any other appellate court in
the State of New York, for the purposes of all legal proceedings arising out of
or relating to this Guarantee or the transactions contemplated hereby. The
Guarantor hereby irrevocably waives, to the fullest extent permitted by
applicable law, any objection that it may now or hereafter have to
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the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
4.9 Waiver of Jury Trial. EACH OF THE GUARANTOR AND
PARTICIPATING HOLDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
4.10 Agents and Attorneys-in-Fact. The Participating
Holders may employ agents and attorneys-in-fact in connection herewith and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
4.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the
Participating Holders in order to carry out the intentions of the parties
hereto as nearly as may be possible and (b) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
4.12 Limitation on Recourse. Notwithstanding anything to
the contrary contained in this Guarantee, recourse to the Guarantor under this
Guarantee shall be limited to the collateral granted pursuant to the Pledge
Agreements.
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IN WITNESS WHEREOF, the parties hereto have caused this
Guarantee to be duly executed and delivered as of the day and year first above
written.
BROOKE (OVERSEAS) LTD.
By /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
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