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EXHIBIT 10.6
GUARANTY
Dated as of June 10, 1999
From
EVE HOLDINGS INC.
as Guarantor
in favor of
THE AGENT AND LENDERS REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
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T A B L E O F C O N T E N T S
SECTION PAGE
1. GUARANTY......................................................................................................1
2. GUARANTY ABSOLUTE.............................................................................................2
3. WAIVERS AND ACKNOWLEDGMENTS...................................................................................2
4. NOTICES, ETC..................................................................................................3
5. CONTINUING GUARANTY...........................................................................................3
6. EXECUTION IN COUNTERPARTS.....................................................................................3
7. GOVERNING LAW; JURISDICTION...................................................................................4
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GUARANTY
GUARANTY dated as of June 10, 1999 made by Eve Holdings Inc.,
a Delaware corporation (the "GUARANTOR"), in favor of the Secured Parties (as
defined below).
PRELIMINARY STATEMENTS:
(1) Trademarks, LLC, a limited liability company (the "BORROWER"), is
party to the 5-Year Non-Amortizing Drawn Term Loan Agreement dated as of May 24,
1999 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"; the capitalized terms defined therein and
not otherwise defined herein being used herein as therein defined) with the
Guarantor, certain Lender Parties party thereto and Citibank, N.A., as
Collateral Agent for such Lender Parties (the Agent and such Lender Parties,
collectively, the "SECURED PARTIES").
(2) The Guarantor, the holder of all of the Class B Shares of the
Borrower, has guaranteed the obligations of the Borrower under Article VIII of
the Credit Agreement.
(3) The Borrower and the Guarantor have requested that the Secured
Parties enter into an amendment dated the date hereof (the AMENDMENT) to
terminate the Guarantor's obligations under Article VIII of the Credit Agreement
upon the execution by the Guarantor of a separate equivalent instrument of
guaranty. The Lenders and the Agent have indicated their willingness to enter
into the Amendment on the terms and conditions set forth therein.
(4) It is a condition precedent to the effectiveness of the Amendment
that the Guarantor shall have executed and delivered this Guaranty to the
Secured Parties.
(5) The Guarantor has received, directly or indirectly, all of the
proceeds of the Advances under the Credit Agreement and will continue to derive
substantial direct and indirect benefits from the transactions contemplated by
the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Secured Parties to enter into the Amendment, the Guarantor hereby
agrees as follows:
Section 1. Guaranty. Subject to Section 5, the Guarantor hereby
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all obligations of
the Borrower now or hereafter existing under or in respect of the Credit
Agreement (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
obligations) whether for principal, interest, expenses or otherwise (such
obligations being the "GUARANTEED OBLIGATIONS"), and any and all expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or any other Secured Party in enforcing any rights under this Guaranty.
Section 2. Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Credit Agreement, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
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rights of any Secured Party with respect thereto. Subject to Section 5, the
liability of the Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of:
(a) any lack of validity, enforceability or genuineness of any
provision of the Credit Agreement, any Loan Document or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations or any
other amendment or waiver of or any consent to departure from the
Credit Agreement or any other Loan Document;
(c) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of, or consent to departure from,
any other guaranty, for all or any of the Guaranteed Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower, the Guarantor or
any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as
though such payment had not been made.
Section 3. Waivers and Acknowledgments. (a) The Guarantor
hereby unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Secured Party protect, secure, perfect or insure any lien or any property
subject thereto or exhaust any right or take any action against the Borrower or
any other Person or any collateral.
(b) The Guarantor hereby irrevocably waives any claims or
other rights that it may now or hereafter acquire against the Borrower that
arise from the existence, payment, performance or enforcement of the Guarantor's
obligations under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Agent or any Lender against
the Borrower or any collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from such Borrower, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right. If any amount
shall be paid to the Guarantor in violation of the preceding sentence at any
time prior to the later of the cash payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty and the
Termination Date, such amount shall be held in trust for the benefit of the
Agent and the Lenders and shall forthwith be paid to the Agent to be credited
and applied to the Guaranteed Obligations and all other amounts payable under
this Guaranty, whether matured or unmatured, in accordance with the terms of the
Credit Agreement and this Guaranty, or to be held as collateral for any
Guaranteed Obligations or other amounts payable under this Guaranty thereafter
arising.
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(c) The Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Credit
Agreement and this Guaranty and that the waivers set forth in Section 2 and this
Section 3 are knowingly made in contemplation of such benefits.
Section 4. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to it, if to the Guarantor at its address c/o Brooke Group Ltd., 000 X.X.
Xxxxxx, 00xx Xxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx,
Executive Vice-President, if to the Agent or any Lender, at its address
specified in Section 9.02 of the Credit Agreement, or, as to any party, at such
other address as shall be designated by such party in a written notice to each
other party. All such notices and other communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively. Delivery by telecopier of an executed
counterpart of a signature page to any amendment or waiver of any provision of
this Guaranty shall be effective as delivery of an original executed counterpart
thereof.
Section 5. Continuing Guaranty. Subject to the proviso to this
Section 5, this Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the later of the cash payment in full of the Guaranteed
Obligations and all other amounts payable under this Guaranty and the
Termination Date, (b) be binding upon the Guarantor, its successors and assigns,
and (c) inure to the benefit of and be enforceable by the Lenders, the Agent and
their respective successors, transferees and assigns provided, however, that,
anything to the contrary notwithstanding, this Guaranty shall terminate and the
Guarantor shall, without the requirement of any further action by any of the
parties to any Loan Document, be released from any further liability hereunder
upon the exercise by Xxxxxx Xxxxxx of the Class B Option.
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Section 6. Execution in Counterparts. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 7. Governing Law; Jurisdiction. (a) This Guaranty
shall be governed by, and construed in accordance with, the laws of the State of
New York.
(b) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and the Guarantor hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty or any other Loan Document shall affect any right that
any party may otherwise have to bring any action or proceeding relating to this
Guaranty or any other Loan Document in the courts of any jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. The Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
EVE HOLDINGS INC.
By: /s/ Xxxxxxxx X. Xxx Xxxxxx
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Name: Xxxxxxxx X. Xxx Xxxxxx
Title: Vice President
