1
EXHIBIT 10.2
GUARANTY
THIS GUARANTY (this "Guaranty") dated as of June 14, 2000 by
Vector Group Ltd., a Delaware corporation (the "Guarantor"), in favor of
Xxxxxxxx Overseas (Holdings) Limited, a private limited company organized under
the laws of England ("Buyer"),
W I T N E S S E T H:
WHEREAS, Brooke (Overseas) Ltd. ("Seller"), a Delaware
corporation, and Buyer have entered into a Purchase and Sale Agreement dated as
of June 14, 2000 (as the same may be amended, modified or supplemented from time
to time, the "Purchase Agreement"), which contemplates the execution of this
Guaranty;
WHEREAS, the Guarantor owns directly or indirectly all of the
issued and outstanding stock of Seller; and
WHEREAS, the Guarantor will derive substantial direct and
indirect benefit from the sale by Seller to Buyer of its entire interest in
Western Tobacco Investments LLC, a Delaware limited liability company, pursuant
to the Purchase Agreement;
NOW, THEREFORE, in consideration of the premises and in order
to induce the Buyer to enter into the Purchase Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantor hereby agrees as follows:
1. DEFINITIONS.
Unless otherwise defined herein, any capitalized term used
herein shall have the meaning ascribed to such term in the Purchase Agreement.
2. GUARANTY.
2.1 GUARANTY UNCONDITIONAL. The Guarantor hereby
unconditionally and irrevocably guarantees, as a primary obligor and not merely
as a surety, to Buyer and its successors, indorsees, transferees and assigns the
2
prompt and complete payment when due, and the prompt and complete performance
when owing of each and every covenant, agreement and other obligation of Seller
to be performed pursuant to the Purchase Agreement (the "Obligations").
2.2 NO SUBROGATION. Notwithstanding any payment or payments
made by the Guarantor hereunder or any set-off or application of funds of the
Guarantor by Buyer, the Guarantor shall not (a) be entitled to be subrogated to
any of the rights of Buyer against Seller or any other guarantor or in any
collateral security or guaranty or right of offset held by Buyer with respect to
the payment or performance of any Obligations, or (b) seek any reimbursement or
contribution from Seller or any other guarantor in respect of any payment,
set-off or application of funds made by the Guarantor hereunder.
2.3 NO EFFECT ON GUARANTY. The obligations of the Guarantor
under this Guaranty shall not be altered, limited, impaired or otherwise
affected by:
(a) any rescission of any demand for payment or performance of
any of the Obligations or any failure by Buyer to make any such demand on Seller
or any other guarantor or to collect any payments from Seller or any other
guarantor or any release of Seller or any other guarantor;
(b) any renewal, extension, modification, amendment,
acceleration, compromise, waiver, indulgence, rescission, discharge, surrender
or release, in whole or in part, of the Purchase Agreement or the Obligations or
any other instrument or agreement evidencing, relating to, securing or
guaranteeing any of the Obligations, or the liability of any party to any of the
foregoing or for any part thereof or any collateral security therefor or
guaranty thereof;
(c) the validity, regularity or enforceability of any of the
Obligations or of the Purchase Agreement or any other instrument or agreement
evidencing, relating to, securing or guaranteeing any of the Obligations at any
time or from time to time held by Buyer;
(d) any failure by Buyer to protect, secure, perfect, record,
insure or enforce any security document or collateral subject thereto at any
time constituting security for the Obligations;
2
3
(e) any act or omission of Buyer relating in any way to the
Obligations or to Seller, including, without limitation, any failure to bring an
action against any party liable on the Obligations, or any party liable on any
guaranty of the Obligations, or any party which has furnished security for the
Obligations, or to apply any funds of any such party held by Seller, or to
resort to any collateral or collateral of any other guarantor;
(f) any defense, set-off or counterclaim which may at any time
be available to or be asserted by or on behalf of Seller or the Guarantor
against Buyer or any circumstance which constitutes, or might be construed to
constitute, an equitable or legal discharge of Seller or any other guarantor for
any of the Obligations, in bankruptcy or in any other instance;
(g) any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Seller or any other guarantor or any defense which Seller or any other
guarantor may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding; or
(h) any change, whether direct or indirect, in the Guarantor's
relationship to Seller, including, without limitation, any such change by reason
of any merger or any sale, transfer, issuance, or other disposition of any stock
of Seller, the Guarantor or any other entity.
2.4 CONTINUING GUARANTY. This Guaranty shall be construed as a
continuing, absolute and unconditional guaranty of payment and performance when
due, and not of collection only, and the obligations of the Guarantor hereunder
shall not be conditioned or contingent upon the pursuit by Buyer at any time of
any right or remedy against Seller or against any other person or entity which
may be or become liable in respect of all or any part of the Obligations or
against any collateral security or guaranty therefor. This Guaranty shall remain
in full force and effect until the Obligations shall have been satisfied by
payment or performance in full or released by Buyer.
2.5 REINSTATEMENT OF GUARANTY. This Guaranty shall continue to
be effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of the Obligations is avoided, rescinded or must otherwise be
restored or returned by Buyer to Seller or its representative or to any other
3
4
guarantor for any reason including as a result of any insolvency, bankruptcy or
reorganization proceeding with respect to Seller or the Guarantor, all as though
such payment had not been made.
3. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR. The
Guarantor hereby represents and warrants to Buyer, as follows:
(a) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, with full corporate
power and authority to execute and deliver this Guaranty and to perform its
obligations hereunder.
(b) The execution, delivery and performance by the Guarantor
of this Guaranty have been duly authorized by all necessary corporate action on
the part of the Guarantor. This Guaranty has been duly and validly executed and
delivered by the Guarantor. This Guaranty constitutes the valid and binding
obligations of the Guarantor, enforceable in accordance with its terms, subject
to the qualification, however, that the enforcement of the rights and remedies
created hereby is subject to bankruptcy and other similar laws of general
application relating to or affecting the rights and remedies of creditors and
that the availability of the remedy of specific enforcement or of injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
(c) The execution, delivery and performance of this Guaranty
by Guarantor do not and will not, with or without the giving of notice or the
lapse of time, or both, violate, conflict with, result in the breach of or
default under, or give rise to any right of termination, cancellation or
acceleration of any obligation of any person or to the loss of any material
right of any person under or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of any
pledge, lien, charge or other encumbrance upon any of the properties or assets
of the Guarantor under, any of the terms, conditions or provisions of (1) the
charter documents or by-laws of the Guarantor or (2) any covenant, agreement or
understanding to which the Guarantor is a party or by which its properties or
4
5
assets are bound, or (3) any order, ruling, decree, judgment, arbitration award,
law, rule, permit, regulation or stipulation to which the Guarantor is subject,
other than, in the case of clauses (2) and (3) above, any such items that,
individually or in the aggregate, would not have a material adverse effect on
the business, assets, financial condition, results of operations or prospects of
the Guarantor.
(d) The Guarantor (i) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage, (ii) is able to pay its debts as they mature and (iii) owns property
having a value, both at fair valuation and at present fair saleable value,
greater than the total amount of the existing probable liability of the
Guarantor on its debts and obligations as they become absolute and matured.
4. COVENANTS OF THE GUARANTOR. The Guarantor hereby agrees as
follows:
(a) Subject to Section 4(b), the Guarantor will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence in accordance with its organizational documents and
applicable laws.
(b) The Guarantor shall not consolidate with or merge into any
other person or convey or transfer, or cause to be conveyed or transferred, in
one or a series of transactions, all or substantially all of its business or
assets, to any person or persons, unless the person formed by such consolidation
or into which the Guarantor is merged or the person or persons acquiring by
conveyance or transfer the business or assets of the Guarantor shall be duly
organized and existing under the laws of the jurisdiction of its organization
and shall expressly assume, by an instrument supplemental hereto, executed and
delivered to Buyer prior to or contemporaneously with the consummation of such
transaction, the performance of the obligations of the Guarantor under this
Guaranty.
(c) The Guarantor also agrees that, from and after the date
hereof, the covenants of Seller set forth in Section 4.10 of the Purchase
Agreement shall be fully applicable to Guarantor and each of its subsidiaries
and affiliates as if such entities were substituted for Seller throughout such
Section 4.10.
5. INDEMNITY. The Guarantor shall indemnify Buyer and its
officers, directors, employees, representatives and agents from and against any
and all damages, losses, liabilities, costs and expenses (including, without
5
6
limitation, reasonable attorneys' fees and disbursements) arising out of or
resulting from, or otherwise in connection with this Guaranty.
6. ELECTION OF REMEDIES. Each and every right, power and
remedy herein given to Buyer, or otherwise existing, shall be cumulative and not
exclusive, and be in addition to all other rights, powers and remedies now or
hereafter granted or otherwise existing. Each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised, from
time to time and as often and in such order as may be deemed expedient by Buyer.
7. EFFECT OF DELAY OR OMISSION TO PURSUE REMEDY. No single or
partial waiver by Buyer of any right, power or remedy, or delay or omission by
Buyer in the exercise of any right, power or remedy which it may have shall
impair any such right, power or remedy or operate as a waiver thereof or of any
other right, power or remedy then or thereafter existing. Any waiver given by
Buyer of any right, power or remedy in any one instance shall only be effective
in that specific instance and only for the purpose for which given, and will not
be construed as a waiver of any right, power or remedy on any future occasion.
8. GUARANTOR'S WAIVERS. The Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by Buyer upon this Guaranty or acceptance of
this Guaranty; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted, incurred, renewed, extended, amended or waived in
reliance upon this Guaranty, and all dealings between the Guarantor and Buyer
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantor waives presentment, demand, notice,
and protest of all instruments included in or evidencing any of the Obligations
and all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of any such instrument or this Guaranty.
9. AMENDMENT. This Guaranty may not be modified, amended,
terminated or revoked, in whole or in part, except by an agreement in writing
signed by Buyer and the Guarantor. No waiver of any term, covenant or provision
6
7
of this Guaranty, or consent given hereunder, shall be effective unless given in
writing by Buyer.
10. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been
sufficiently given to any party hereto if personally delivered or if sent by
telecopy, or by registered or certified mail, return receipt requested, or by
recognized courier service, postage or other charges prepaid, addressed as
follows:
(a) If to the Guarantor:
Vector Group Ltd.
000 X.X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxx of America
Fax: 0 (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Coudert Brothers
1114 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx xx Xxxxxxx
Fax: 0 (000) 000-0000
Attention: Xxxxx X. Xxxxxx, III
(b) If to Buyer:
Xxxxxxxx Overseas (Holdings) Ltd.
Members Hill
Xxxxxxxxxx Xxxx
Xxxxxxxxx
Xxxxxx XX 000XX
Xxxxxx Xxxxxxx
Fax: 00 (0)0 000 000 000
Attention: Corporate Secretary and
Xxxxxxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx of America
Fax: 0 (000) 000-0000
Attention: A. Xxxxxx Xxxxx
7
8
and with a copy to:
Xxxxxxx & Xxxxxxx
00 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Fax: 00 (0)00 0000 0000
Attention: Xxx Xxxxxxxxx
or to such other address as may be specified from time to time by the Guarantor
or Buyer in a notice to the other party given as herein provided. Such notice or
communication will be deemed to have been given as of the date so personally
delivered, telecopied, or when received if sent by mail or by courier.
11. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding
upon and shall inure to the benefit of the Guarantor and Buyer and their
respective successors and permitted assigns. Notwithstanding the foregoing,
except as permitted by Section 4(b) the Guarantor shall not have the right to
assign its rights or obligations hereunder (whether by operation of law or
otherwise) without the prior written consent of Buyer. Buyer may, in its sole
discretion, assign this Guaranty to a permitted assignee of its rights under the
Purchase Agreement.
12. SECTION HEADINGS. The section headings used in this
Guaranty are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
14. CONSENT TO JURISDICTION. Guarantor irrevocably submits to
the jurisdiction of (a) the Supreme Court of the State of New York, New York
County, and (b) the United States District Court for the Southern District of
New York, for the purposes of any suit, action or other proceeding arising out
of this Guaranty. Any action, suit or proceeding relating hereto may be
commenced either in the United States District Court for the Southern District
of New York or if such suit, action or other proceeding may not be brought in
8
9
such court for jurisdictional reasons, in the Supreme Court of the State of New
York, New York County. Guarantor further agrees that service of any process,
summons, notice or document by hand delivery or U.S. or foreign registered mail
to Guarantor's address set forth in Section 10 hereof shall be effective service
of process for any action, suit or proceeding brought against Guarantor in any
such court. Guarantor irrevocably and unconditionally waives any objection to
the laying of venue of any action, suit or proceeding arising out of this
Guaranty in (i) the Supreme Court of the State of New York, New York County, or
(ii) the United States District Court for the Southern District of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
15. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
COUNTERCLAIM ARISING IN CONNECTION WITH THIS GUARANTY.
16. SEVERABILITY. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the remaining provisions hereof
shall be liberally construed in favor of Buyer in order to carry out the
provisions hereof. The invalidity or unenforceability of any provision of this
Guaranty in any jurisdiction shall not affect the validity or enforceability of
any such provision in any other jurisdiction.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be executed and delivered on its behalf as of the date first written above.
VECTOR GROUP LTD.
By /s/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice-President
9
