EXHIBIT 10.7
THE RIGHTS OF THE BENEFICIARY HEREUNDER ARE SUBORDINATED TO THE PRIOR PAYMENT
IN FULL AND ALL OTHER RIGHTS OF CONGRESS FINANCIAL CORPORATION ("CONGRESS") AS
AND TO THE EXTENT PROVIDED IN THAT CERTAIN SUBORDINATION AGREEMENT BETWEEN
CONGRESS AND THE BENEFICIARY OF EVEN DATE HEREWITH.
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GUARANTEE
Dated as of April 30, 2002
by
XXXXXXX GROUP INC.
as Guarantor
in favor of
THE BANK OF NEW YORK,
as Collateral Agent,
to the benefit of the Holders of the 10% Senior Secured
Notes due March 31, 2006 of VGR Holding Inc.
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GUARANTEE
GUARANTEE, dated as of April 30, 2002 (this "Guarantee"), is
made by XXXXXXX GROUP INC., a Delaware corporation (the "Guarantor") in favor
of The Bank of New York as Collateral Agent for the benefit of the holders of
the 10% Senior Secured Notes due March 31, 2006 (the "Notes") of VGR Holding
Inc. (the "Company") and The Bank of New York, as Collateral Agent.
RECITALS:
A. On May 14, 2001, the Company issued $60,000,000 in
aggregate principal amount of Notes to the Purchasers (as defined in the Note
Purchase Agreement, dated as of May 14, 2001, between the Company and the
Purchasers named therein (such agreement, as amended, modified and supplemented
from time to time, the "Note Purchase Agreement").
B. The Company wishes to issue an additional
$30,000,000 in aggregate principal amount of Notes pursuant to the Second
Amendment to Note Purchase Agreement and New Note Purchase Agreement (the
"Amendment and Purchase Agreement"), dated as of April 30, 2002 by and among
the Company, the Majority Holders (as defined in the Note Purchase Agreement)
and the New Purchasers (as defined in the Amendment and Purchase Agreement).
C. It is a condition precedent to both the amendment of
the Note Purchase Agreement pursuant to the Amendment and Purchase Agreement
New Purchasers purchasing the additional Notes that the Guarantor shall have
executed and delivered this Guarantee for benefit of all Holders of Notes,
whenever issued, and the Collateral Agent.
D. The Company indirectly owns 100% of the outstanding
capital stock of the Guarantor.
NOW, THEREFORE, in consideration of the foregoing premises
and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Guarantor hereby agrees as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Certain Defined Terms.
(a) Each capitalized term used and not
otherwise defined herein shall have the meaning assigned to such term (whether
directly or by reference to another agreement or document) in the Note Purchase
Agreement.
(b) The term "Guaranteed Obligations" shall
have the meaning ascribed to the term "Secured Obligations" in the BGLS Pledge
Agreement.
(c) The term "Guaranteed Parties" means,
collectively, the Holders and the Collateral Agent.
ARTICLE 2
THE GUARANTEE
(a) The Guarantor hereby unconditionally and
irrevocably guarantees to the Guaranteed Parties the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration
or otherwise) of all Guaranteed Obligations from time to time owing to the
Guaranteed Parties, in each case strictly in accordance with the terms thereof.
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 to the
Collateral Agent for the benefit of the Guaranteed Parties, 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 to the Collateral Agent for the benefit of the Guaranteed
Parties (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
(b) The obligations of the Guarantor under
Section 2(a) hereof are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of the Note Documents 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(b) that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. The Guarantor hereby expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement that
any Guaranteed Party exhaust any right, power or remedy or proceed against the
Company under the Note Purchase Agreement or the Company Pledge 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.
(c) The obligations of the Guarantor under this
Guarantee 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
bankruptcy or reorganization or otherwise, and the Guarantor agrees that it
will indemnify the Guaranteed Parties on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees of counsel) incurred
by Holders and the Collateral Agent 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.
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(d) The Guarantor hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations it shall not
exercise any right or remedy arising by reason of any performance by it of its
guarantee in Section 2(a) hereof, whether by subrogation or otherwise, against
the Company or any other guarantor of any of the Guaranteed Obligations or any
security for any of the Guaranteed Obligations.
(e) The Guarantor agrees that, as between (i)
the Guarantor and (ii) the Holders, the obligations of the Company under the
Note Purchase Agreement may be declared to be forthwith due and payable as
provided in Section 12 of the Note Purchase Agreement (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 12) for purposes of Section 2(a) hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable by the Guarantor for
purposes of said Section 2(a)).
(f) The guarantee in this Section 2 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
(g) The Guarantor hereby acknowledges that this
Guarantee constitutes an instrument for the payment of money, and consents and
agrees that any Holder, at its 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.
(h) Anything herein or in any other Note
Document to the contrary notwithstanding, the maximum liability of the
Guarantor hereunder shall in no event exceed the maximum amount which can be
guaranteed by the Guarantor under applicable federal and state laws relating to
the insolvency of debtors without rendering the Guarantor insolvent.
(i) At the request of any Holder, the Guarantor
shall execute the following endorsement on any Note:
"Xxxxxxx Group Inc. hereby unconditionally and irrevocably
guarantees, subject to the Xxxxxxx Subordination Agreement,
to the holder of the foregoing Note the due and punctual
payment of all principal, interest and Prepayment Premium, if
any, on said Notes as more fully provided in the Xxxxxxx
Guarantee."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.01 The Guarantor represents and warrants that:
(a) the Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;
(b) the Guarantor has the corporate power and
authority and the legal right to execute and deliver, to perform its
obligations under this Agreement and has
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taken all necessary corporate action to authorize its execution, delivery and
performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid
and binding obligation of the Guarantor, enforceable in accordance with its
terms, except in each case as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally;
(d) the execution, delivery and performance by
the Guarantor of this Guarantee will not (i) contravene, result in any breach
of, or constitute a default under, or result in the creation of any Lien in
respect of any property of the Guarantor under, any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Guarantor is bound
or by which the Guarantor or any of its properties is bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental or Regulatory Authority applicable to the Guarantor or (iii)
violate any provision of any statute or other rule or regulation of any
Governmental or Regulatory Authority applicable to the Guarantor;
(e) no consent, approval or authorization of,
or registration, filing or declaration with, any Governmental or Regulatory
Authority is required in connection with the execution, delivery or performance
by the Guarantor of this Agreement;
(f) no litigation, proceeding, or, to the
knowledge of Guarantor, investigation of or before any arbitrator or
Governmental or Regulatory Authority is pending or, to the knowledge of the
Guarantor, threatened by or against the Guarantor against any of its properties
or revenues with respect to this Agreement or any of the transactions
contemplated hereby;
(g) after giving effect to the transactions
contemplated in the New Note Purchase Agreement, the Guarantor will be Solvent;
and (h) the Guarantor is not an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
ARTICLE 4
[RESERVED]
ARTICLE 5
WAIVER OF SURETYSHIP DEFENSES
Without limiting the generality of Section 2 of this
Agreement, 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:
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(a) the occurrence of any Event of Default
under, or any lack of validity, legality or enforceability of any provision of
any Note Document or any other agreement or document;
(b) the failure of any Guaranteed Party:
(i) to assert any claim or demand or
to enforce any right or remedy against any Document Party or any other Person
under the provisions of any Note Document, or otherwise, or
(ii) to exercise any right or remedy
against any other guarantor of or other Person pledging collateral securing any
of the Guaranteed Obligations;
(c) at any time or from time to time, with or
without notice to the Guarantor, any change in the time, manner or place of
payment of, or in any term of, all or any of the Guaranteed Obligations, or any
other extension, compromise, indulgence, waiver or renewal of any Guaranteed
Obligation;
(d) any reduction, limitation, variation,
impairment, discontinuance or termination of any of the Guaranteed Obligations
for any reason (other than by reason of any payment which is not required to be
rescinded), including any claim of waiver, release, discharge, surrender,
alteration or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, the Guaranteed Obligations or
otherwise (other than by reason of any payment which is not required to be
rescinded);
(e) any amendment to, rescission, waiver or
other modification of, or any consent to any departure from, any of the terms
of the Guaranteed Obligations or any guarantees or security;
(f) any addition, exchange, release, discharge,
realization or non-perfection of any collateral security in respect of the
Guaranteed Obligations;
(g) any amendment to, rescission, waiver or
other modification of, or release or addition of, or consent to any departure
from, any other guarantee held by the Holders as security for any of the
Guaranteed Obligations;
(h) the loss of or in respect of or the
unenforceability of any guarantee or other security which the Guaranteed
Parties may now or hereafter hold in respect of the Guaranteed Obligations,
whether occasioned by the fault of the Guaranteed Parties or otherwise;
(i) any change in the name of the Company or in
the constitutive documents, capital structure, capacity or constitution of the
Company, the bankruptcy or
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insolvency of the Company, the sale of any or all of the Company's business or
assets or the Company being consolidated, merged or amalgamated with any other
Person;
(j) any failure on the part of the Company or
any other Person to perform or comply with any term of the Note Documents or
any of the Guaranteed Obligations or any other agreement or document;
(k) any suit or other action brought by any
beneficiaries or creditors of, or by, the Company or any other Person for any
reason whatsoever, including without limitation any suit or action in any way
attacking or involving any issue, matter or thing in respect of any Note
Document, any of the Guaranteed Obligations or any other agreement or document;
(l) any lack or limitation of status or of
power, incapacity or disability of the Company or any trustee or agent thereof;
or
(m) any other circumstance (other than final
and indefeasible payment in full) which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Company, Brooke
Holding, NV Holdings or Vector or any surety or any other guarantor of the
foregoing.
ARTICLE 6
MISCELLANEOUS PROVISIONS
Section 6.01 Notices. All notices and communications
provided for hereunder shall be in writing and sent (a) by telecopy if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid). Any such notice must be
sent:
(a) if to any Holder, to such Holder at the
address specified for such communications in Schedule A to the Note Purchase
Agreement, or at such other address as it shall have specified to Xxxxxxx and
the Collateral Agent in writing,
(b) if to the Collateral Agent, to the
Collateral Agent at such address as is set forth on its signature page to the
Collateral Agency Agreement or at such other address as the Collateral Agent
shall have specified to each Holder and to Xxxxxxx in writing, or
(c) if to Xxxxxxx, to Xxxxxxx at its address
set forth on its signature page hereto, or at such other address as Xxxxxxx
shall have specified to each Holder and to the Collateral Agent.
Notices under this Section 6.01 will be deemed given when actually received if
sent by telecopy, upon the succeeding Business Day if sent by overnight courier
and three days after deposit in the U.S. mail if sent by registered or
certified mail.
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Section 6.02 Amendments. No waiver, amendment,
modification or termination of any provision of this Guarantee, or consent to
any departure by the Guarantor from the terms of this Guarantee, shall in any
event be effective without the prior written consent of the Majority Holders
(acting in accordance with the Note Documents) and the Collateral Agent. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
Section 6.03 Successors and Assigns. This Guarantee
shall be binding upon the Guarantor and its respective permitted successors and
assigns and shall inure to the benefit of the Guaranteed Parties and their
respective successors and assigns. Except as expressly permitted by the Note
Documents, the Guarantor may not assign or otherwise transfer any of its
respective rights or obligations under this Guarantee.
Section 6.04 Survival. All agreements, statements,
representations and warranties made by the Guarantor herein or in any
certificate or other instrument delivered by the Guarantor or on its behalf
under this Guarantee shall be considered to have been relied upon by the
Holders and the Collateral Agent and shall survive the execution and delivery
of this Agreement and the Note Documents until termination thereof or the
indefeasible payment in full in cash of all Guaranteed Obligations regardless
of any investigation made by or on behalf of any Holder or the Collateral
Agent.
Section 6.05 No Waiver; Remedies Cumulative. No failure
or delay on the part of any Guaranteed Party in exercising any right, power or
privilege hereunder and no course of dealing between the Guarantor and any
Guaranteed Party shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Guaranteed Parties would otherwise have.
Section 6.06 Counterparts. This Guarantee may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. Delivery of an executed counterpart hereof by facsimile or e-mail
transmission shall be effective as delivery of a manually executed counterpart
hereof.
Section 6.07 Captions. The headings of the several
articles and sections and sub-sections of this Guarantee are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Guarantee.
Section 6.08 Severability. In case any provision
contained in or obligation under this Guarantee shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
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Section 6.09 Governing Law; Submission to Jurisdiction
and Venue; Waiver of Jury Trial.
THIS GUARANTEE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT
LIMITATION, xx.xx. 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
AND NYCPLR 327(b). TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, THE GUARANTOR IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING, WHETHER IN TORT, CONTRACT OR
OTHERWISE, ARISING OUT OF OR RELATING TO THIS AND IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE HEARD AND
DETERMINED ONLY IN ANY SUCH COURT. THE GUARANTOR IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
GUARANTEED PARTY OR ITS AGENTS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
GUARANTOR OR ANY OF ITS AFFILIATES IN ANY OTHER JURISDICTION.
Section 6.10 Entire Agreement. This Guarantee, together
with any other document executed in connection with this Guarantee, is intended
by the parties as a final expression of their agreement as to the matters
covered by this Guarantee and is intended as a complete and exclusive statement
of the terms and conditions of such agreement.
Section 6.11 Independent Obligations. The Guarantor's
obligations under this Agreement shall be in addition to and shall be
independent of every other guarantee or security which the Guaranteed Parties
may at any time hold for any of the Guaranteed Obligations. Any Guaranteed
Party may bring a separate action against the Guarantor without first
proceeding against the Company or any other guarantor or any other Person or
any other security provided by any Person and without pursuing any other
remedy.
Section 6.12 Expenses. The Guarantor agrees to pay or to
reimburse the Guaranteed Parties for all reasonable costs and expenses
(including reasonable attorney's fees and expenses) that may be incurred by any
Guaranteed Party in any effort to enforce any of the provisions of this
Guarantee or any of the obligations of the Guarantor under this Guarantee ,
including all such reasonable costs and expenses (and reasonable attorney's
fees and expenses) incurred in any bankruptcy, reorganization, workout or other
similar proceeding.
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IN WITNESS WHEREOF, Xxxxxxx Group Inc. has caused this
Guarantee to be duly executed and delivered as of the date first above written.
XXXXXXX GROUP INC.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Vice President
Address for Notices:
Xxxxxxx Group Inc.
000 Xxxxx Xxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx.
with a copy to:
Vector Group Ltd.
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
Executive Vice President
