EXHIBIT 10.2
SECOND AMENDMENT TO COLLATERAL AGENCY AGREEMENT
This Second Amendment to Collateral Agency Agreement (this "Second
Amendment") is made and entered into as of April 30, 2002 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"), (v) Liggett
Group Inc., a Delaware corporation (parties (i) through (v) the "Company
Parties"), (vi) 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 as amended on
September 4, 2001 (the "Collateral Agency Agreement") with reference to that
certain Note Purchase Agreement (as amended, supplemented or otherwise modified
from time to time, the "Note Purchase Agreement") dated as of May 14, 2001
under which the Company has issued to the purchasers (the "Purchasers")
$90,000,000 in aggregate principal amount of the Company's 10% Senior Secured
Notes due March 31, 2006 (the "Notes") and (vii) 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 Collateral
Agency Agreement.
RECITALS
WHEREAS, the parties listed above wish to amend the Collateral Agency
Agreement to reflect issuance of an additional $30,000,000 in Notes pursuant to
the Second Amendment to Note Purchase Agreement and New Note Purchase Agreement
dated as of the date hereof by and among the Company and the signatories
thereto.
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
hereby agree as follows:
1. AMENDMENT TO COLLATERAL AGENCY AGREEMENT.
(a) The definition of "Notes" in the preamble to the Collateral
Agency Agreement is hereby amended by substituting "$90,000,000" in lieu of
"$60,000,000".
(b) Section 2.06 is added which shall read in its entirety: "2.06
Notice of Default. The Company shall deliver to the Collateral Agent written
notice of any Default or Event of Default in the performance of any covenant,
agreement or condition contained in the Note Purchase Agreement, with such
notice to be delivered promptly and, in any event, no later than one (1)
Business Day following the occurrence of such Default or Event of Default."
(c) Section 3.01 of the Collateral Agency Agreement is hereby
amended by (i) deleting the word "and" after Section 3.01(j), (ii) deleting
Section 3.01(k) in its entirety and inserting in lieu thereof the following:
"(k) upon the receipt by it of written instructions of the
Majority Holders, file or record (or cause its agents to file or record) such
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;"
and (iii) adding Section 3.01(l) and Section 3.01(m) to read as
follows:
"(l) receive any and all amounts or proceeds paid pursuant to the
Liggett Guarantee and apply such amounts or proceeds as specified in Section
4.02; and
(m) promptly upon and, in any event, no later than one (1)
Business Day after receipt of notice from the Company pursuant to Section 2.06
hereof, deliver notice to Congress Financial Corporation in accordance with the
Liggett Subordination Agreement that a Default or Event of Default, as the case
may be, has occurred under the Note Purchase Agreement."
(d) Section 3.03(d) is hereby amended by deleting "The Collateral
Agent is authorized to" from the beginning of the first sentence thereof.
(e) Section 4.01 of the Collateral Agency Agreement is hereby
amended by deleting at the end thereof "in accordance with Section 5.13 of the
applicable Pledge Agreement" and substituting in lieu thereof "in accordance
with Section 5.13 of the BGLS Pledge Agreement, and Section 4.13 of each of the
Brooke Holding Pledge Agreement and the NV Holdings Pledge Agreement".
(f) Section 4.02 is hereby added to the Collateral Agency
Agreement and read as follows:
"4.02. Payments under Liggett Guarantee. The receipt by the
Collateral Agent of any amounts under the Liggett Guarantee shall be applied by
the Collateral Agent first, to the payment of all proper fees, costs and
expenses incurred by the Collateral Agent and/or its agents, counsel or other
professional advisors in the collection thereof and second, in satisfaction of
the Secured Obligations (as defined in the Company Pledge Agreement).
2. AUTHORIZATION OF AMENDMENT DOCUMENTS. The Majority Holders
hereby instruct the Collateral Agent to execute the Amended and Restated
Guarantee, Acknowledgment and Pledge Agreement, dated as of the date hereof,
among Vector, the Collateral Agent and the Majority Holders, the Amendment to
Pledge and Security Agreement, dated as of the date hereof, between Brooke
Holding and the Collateral Agent, the Amendment to Pledge and Security
Agreement, dated as of the date hereof, between NV Holdings and the Collateral
Agent, the Amendment to Pledge and Security Agreement, dated as of the date
hereof, between the Company and the Collateral Agent, the Liggett Guarantee and
the Liggett Subordination Agreement.
3. ADDITIONAL PARTY. Liggett Group Inc. is hereby added as a
party to the Collateral Agency Agreement, as amended, as a Company Party.
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4. LIMITED EFFECT. Except as expressly amended and modified by
this Second Amendment, the Collateral Agency Agreement shall continue to be,
and shall remain, in full force and effect in accordance with its terms.
5. SUCCESSORS. All agreements of the parties to this Second
Amendment shall bind their respective successors.
6. COUNTERPARTS. This Second Amendment may be executed in two or
more 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 Second Amendment by facsimile or
electronic mail transmission shall be effective as delivery of a manually
executed counterpart of this Second Amendment.
7. GOVERNING LAW. THIS SECOND AMENDMENT AND ALL ISSUES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
8. SEVERABILITY. In case any one or more of the provisions in
this Second Amendment shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
9. HEADINGS. The headings of the sections of this Second
Amendment have been inserted for convenience of reference only, are not to be
considered a part of this Second Amendment and shall in no way modify or
restrict any of the term or provisions of this Second Amendment.
10. REFERENCE TO AND EFFECT ON COLLATERAL AGENCY AGREEMENT. On
and after the date of this Second 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 Second Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed this Second
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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LIGGETT GROUP INC.
By: /s/ Charles M. Kingan, Jr.
--------------------------------------
Name: Charles M. Kingan, Jr.
Title: Vice President
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THE BANK OF NEW YORK, as Collateral Agent
By: /s/ Patricia Gallagher
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Name: Patricia Gallagher
Title: Authorized Signatory
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TCW HIGH INCOME PARTNERS, LTD.
By: TCW Asset Management Company, its
Investment Advisor
By: /s/ Darryl L. Schall
--------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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TCW HIGH INCOME PARTNERS II, LTD.
By: TCW Asset Management Company, its
Investment Advisor
By: /s/ Darryl L. Schall
--------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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PIONEER HIGH YIELD CAYMAN UNIT TRUST
By: TCW Asset Management Company, its
Investment Advisor
By: /s/ Darryl L. Schall
--------------------------------------
Name: Darryl L. Schall
Title: Managing Director
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TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW Asset Management Company, its
Investment Advisor
By: /s/ Darryl L. Schall
--------------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: /s/ Shawn Bookin
--------------------------------------
Name: Shawn Bookin
Title: Senior Vice President
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TCW LEVERAGED INCOME TRUST IV, L.P.
By: TCW Asset Management Company, as its
Investment Advisor
By: /s/ Shawn Bookin
----------------------------------
Name: Shawn Bookin
Title: Senior Vice President
AND
By: TCW Asset Management Company, as its
Managing Member of TCW (LINC IV)
L.L.C., the General Partner
By: /s/ Darryl L. Schall
----------------------------------
Name: Darryl L. Schall
Title: Managing Director
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TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda), Ltd., as its
General Partner
By: /s/ Darryl L. Schall
----------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: TCW Investment Management Company, as
Investment Adviser
By: /s/ Shawn Bookin
----------------------------------
Name: Shawn Bookin
Title: Senior Vice President
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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/ Darryl L. Schall
----------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: TCW Investment Management Company, as
Investment Adviser
By: /s/ Shawn Bookin
----------------------------------
Name: Shawn Bookin
Title: Senior Vice President
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TCW LINC III CBO LTD.
By: TCW Investment Management Company,
as Collateral Manager
By: /s/ Darryl L. Schall
----------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: /s/ Shawn Bookin
----------------------------------
Name: Shawn Bookin
Title: Senior Vice President
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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/ Darryl L. Schall
----------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: /s/ Shawn Bookin
----------------------------------
Name: Shawn Bookin
Title: Senior Vice President
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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/ Darryl L. Schall
----------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: /s/ Shawn Bookin
----------------------------------
Name: Shawn Bookin
Title: Senior Vice President
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CAPTIVA II FINANCE LTD.
By: TCW Advisors, Inc., its Financial
Manager
By: /s/ Darryl L. Schall
----------------------------------
Name: Darryl L. Schall
Title: Managing Director
By: /s/ Shawn Bookin
----------------------------------
Name: Shawn Bookin
Title: Managing Director
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