EXHIBIT 10.3
FIRST AMENDMENT TO COLLATERAL AGENCY AGREEMENT
This First Amendment to Collateral Agency Agreement (this
"AMENDMENT") is made and entered into as of September 4, 2001 by and among (i)
VGR Holding Inc., a Delaware corporation (formerly known as BGLS Inc., the
"COMPANY"), (ii) Brooke Group Holding Inc., a Delaware corporation ("BROOKE
HOLDING"), (iii) Vector Group Ltd., a Delaware corporation ("VECTOR"), (iv) New
Valley Holdings, Inc., a Delaware corporation ("NV HOLDINGS"), (parties (i)
through (iv) the "COMPANY PARTIES"), (v) The Bank of New York, a New York
banking corporation as successor in interest to United States Trust Company of
New York, a New York banking corporation as collateral agent (the "COLLATERAL
AGENT") appointed pursuant to the Collateral Agency Agreement dated May 14, 2001
(the "AGREEMENT") with reference to that certain Note Purchase Agreement (the
"NOTE PURCHASE AGREEMENT") dated as of May 14, 2001 under which the Company has
issued to the purchasers (the "PURCHASERS") $60,000,000 in aggregate principal
amount of the Company's 10% Senior Secured Notes due March 31, 2006 (the
"NOTES") and (vi) the Holders (as defined below) of the Notes listed on the
signature pages hereto. Capitalized terms used but not defined herein shall have
the meaning ascribed to them in the Agreement.
RECITALS
WHEREAS, the obligations of the Company under the Notes and
the Note Purchase Agreement are secured by the Security Agreements;
WHEREAS, pursuant to the Security Agreements, the Company
Parties have granted to the Collateral Agent, for the benefit of the holders of
the Notes (the "HOLDERS"), a security interest in and liens on the Collateral
(as defined in the Note Purchase Agreement);
WHEREAS, the Company is changing its name from BGLS Inc. to
VGR Holding Inc;
WHEREAS, the Uniform Commercial Code financing statements on
file relating to the Collateral will need to be amended to reflect the Company's
name change in order to maintain the perfected security interest of the
Collateral Agent in the Collateral in which a security interest may be perfected
by filing Uniform Commercial Code financing statements;
WHEREAS, it is a specific duty of the Collateral Agent,
pursuant to SECTION 3.01(A) of the Agreement, to maintain the perfection of any
lien in, to or upon the Collateral or any portion thereof, that has been, are or
will be granted in favor of the Collateral Agent pursuant to the Security
Agreements;
WHEREAS, this duty can be more effectively performed by
amending the Agreement to authorize the Collateral Agent to file the Uniform
Commercial Code financing statements and amendments to the Uniform Commercial
Code financing statements it deems reasonably necessary at any time and for any
reason including without limitation a change in the name of any Company Party;
and
WHEREAS, the parties listed above wish to amend the Agreement
to give the Collateral Agent such authorization.
NOW THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
AGREEMENT
1. AMENDMENT OF SECTION 3.01. Section 3.01 is amended as follows:
a. The word "and" is omitted from the end of clause (i).
b. The period is omitted from the end of clause (j) and
is replaced with "; and".
c. 3.01 (k) is added which shall read in its entirety:
"The Majority Holders may instruct the Collateral
Agent from time to time to file or record Uniform
Commercial Code financing statements and other filing
or recording documents or instruments with respect to
the Collateral in such form and in such offices as
the Majority Holders reasonably determine appropriate
to perfect or to ensure the continuing perfection or
priority of the security interest in favor of the
Collateral Agent."
2. AMENDMENT OF SECTION 3.03. Section 3.03 shall be amended as follows:
a. The word "and" is omitted from the end of clause (b).
b. The period is omitted from the end of clause (c) and
is replaced with "; and".
c. Section 3.03 (d) is added which shall read in its
entirety: "The Collateral Agent is authorized to file
or record from time to time Uniform Commercial Code
financing statements and other filing or recording
documents or instruments with respect to the
Collateral in such form and in such offices as the
Collateral Agent may be specifically instructed by
the Majority Holders to file or record, to perfect or
to ensure the continuing perfection or priority of
the security interest in favor of the Collateral
Agent. The Collateral Agent shall have no obligation
to make any independent investigation or
determination as to the necessity or propriety of
filing any such financing statements or other
documents. However, if at any time, the Collateral
Agent receives actual notice or is advised by
in-house or outside legal counsel that it is
necessary or proper to file any such financing
statement or other document to perfect or to ensure
the continuing perfection or priority of the security
interest in favor of the Collateral Agent, then the
Collateral Agent shall be obligated to so inform the
Majority Holders, and the Majority Holders shall
thereupon instruct the Collateral Agent to take, or
refrain from taking, as the case may be, any action
with respect to such filing. In the event that the
Majority Holders fail to so instruct the Collateral
Agent, the Majority Holders shall be deemed to have
instructed the Collateral Agent to take no action."
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3. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile or e-mail
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.
4. HEADINGS. The section and other headings contained in this Amendment
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
5. CHOICE OF LAW. This Amendment shall be construed and enforced in
accordance with, and governed by the law of the State of New York.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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6. NO OTHER AMENDMENTS: CONFIRMATION. Except as expressly amended,
modified and supplemented hereby, the provisions of the Collateral Agency
Agreement and the other Note Documents are and still remain in full force and
effect.
7. REFERENCE TO AND EFFECT ON COLLATERAL AGENCY AGREEMENT. On and after
the date of this Amendment, each reference in the Collateral Agency Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words of like meaning
referring to the Collateral Agency Agreement, and each reference in the Note
Documents, other than the Collateral Agency Agreement, and any ancillary
documents to the "Collateral Agency Agreement", "thereunder", "thereof", or
words of like meaning referring to the Collateral Agency Agreement shall mean
and be a reference to the Collateral Agency Agreement as so amended by this
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment by their duly authorized officers as of the day and year first above
written.
VGR HOLDING INC.
By: /s/ Richard J. Lampen
----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
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BROOKE GROUP HOLDING INC.
By: /s/ Richard J. Lampen
----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
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VECTOR GROUP LTD.
By: /s/ Richard J. Lampen
----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
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NEW VALLEY HOLDINGS, INC.
By: /s/ Richard J. Lampen
----------------------------------
Name: Richard J. Lampen
Title: Executive Vice President
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THE BANK OF NEW YORK,
as successor in interest to
UNITED STATES TRUST COMPANY OF NEW YORK,
as Collateral Agent
By: /s/ Patricia Gallagher
------------------------------------
Name: Patricia Gallagher
Title: Authorized Signatory
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TCW LEVERAGED INCOME TRUST, L.P.,
By: TCW Advisers (Bermuda), Ltd.,
as its General Partner
By: /s/ Melissa V. Weiler
------------------------------------
Name: Melissa V. Weiler
Title: Managing Director
By: TCW Investment Management Company,
as Investment Adviser
By: /s/ Darryl L. Schall
------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW (LINC II), L.P.
as its General Partner
By: TCW Advisers (Bermuda), Ltd.,
its General Partner
By: /s/ Melissa V. Weiler
------------------------------------
Name: Melissa V. Weiler
Title: Managing Director
By: TCW Investment Management Company,
as Investment Adviser
By: /s/ Darryl L. Schall
------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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TCW LINC III CBO LTD.
By: TCW Investment Management Company,
as Collateral Manager
By: /s/ Melissa V. Weiler
------------------------------------
Name: Melissa V. Weiler
Title: Managing Director
By: Darryl L. Schall
------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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POWRs 1997-2 (Participating Obligations
with Residuals 1997-2)
By: Citibank Global Asset Management,
Its Investment Advisor
By: TCW Asset Management Company,
Its Portfolio Manager
By: /s/ Melissa V. Weiler
------------------------------------
Name: Melissa V. Weiler
Title: Managing Director
By: /s/ Darryl L. Schall
------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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CAPTIVA II FINANCE LTD.,
By: TCW Advisors, Inc.
Its Financial Manager
By: /s/ Melissa V. Weiler
------------------------------------
Name: Melissa V. Weiler
Title: Managing Director
By: /s/ Darryl L. Schall
------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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AIMCO CDO, SERIES 2000-A
By: Allstate Investment Management Company,
Its Collateral Manager
By: TCW Asset Management Company,
Its Investment Advisor
By: /s/ Melissa V. Weiler
-----------------------------------------
Name: Melissa V. Weiler
Title: Managing Director
By: /s/ Darryl L. Schall
-----------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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