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Exhibit 99.3
AMENDMENT NO. 2 TO SECURITY AGREEMENT
AMENDMENT NO. 2 dated as of January 30, 1998 ("AMENDMENT NO.
2") among LIGGETT GROUP INC., a Delaware corporation (the "ISSUER"), EVE
HOLDINGS INC., a Delaware corporation, and each of the other Subsidiaries of the
Issuer that, as of the date hereof, is a party to the Security Agreement
referred to below (each a "GUARANTOR" and collectively, the "GUARANTORS", and
together with the Issuer, the "OBLIGORS"), and BANKERS TRUST COMPANY, acting not
in its individual capacity but solely as collateral agent under the Security
Agreement referred to below (in such capacity, the "COLLATERAL AGENT").
WHEREAS, the Issuer and the Guarantor are parties to (i) an
Indenture dated as of February 14, 1992 (as supplemented and amended and in
effect from time to time, the "INDENTURE") with Bankers Trust Company, as
trustee (in such capacity, the "TRUSTEE"), under which there is currently
outstanding $112,612,000 aggregate principal amount of the Issuer's 11.50%
Series B Senior Secured Notes Due 1999 and $32,279,081 of the Issuer's Variable
Rate Series C Senior Secured Notes Due 1999 and (ii) a Security Agreement dated
as of February 14, 1992, as amended by Amendment No. 1 to Security Agreement
dated as of January 26, 1994 (the "SECURITY AGREEMENT"), with the Collateral
Agent providing, INTER ALIA and subject to the terms and conditions thereof, for
the granting by the Issuer and the Guarantor of a security interest in the
Collateral;
WHEREAS, the Issuer, the Guarantor and the Trustee are
concurrently executing a supplement to the Indenture providing for certain
amendments to the Indenture as described therein;
WHEREAS, pursuant to Section 9.02 of the Indenture, the
Requisite Holders (as defined in the Indenture) have consented to the amendment
of the Security Agreement as provided herein and the amendments to the Indenture
pursuant to the Second Supplemental Indenture and Amendment to Series B and
Series C Senior Secured Notes, dated as of January 30, 1998;
NOW, THEREFORE, in consideration of the premises and other
benefits to the Obligors, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment No. 2, terms defined in the Security Agreement are used herein as
defined therein.
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Section 2. AMENDMENTS. The Security Agreement is hereby
amended as follows:
A. References in the Security Agreement (including references
to the Security Agreement as amended hereby) to "this Agreement" or "this
Security Agreement" (and indirect references such as "hereunder", "hereby",
"herein" and "hereof") shall be deemed to be references to the Security
Agreement as amended hereby.
B. Section 6.5 of the Security Agreement is hereby amended in
its entirety to read as follows:
6.5. INVESTMENT OF PROCEEDS. The Issuer shall establish an
account at Bankers Trust Company (the "INVESTMENT ACCOUNT") in
the name of the Collateral Agent into which each Obligor shall
deposit the Net Cash Proceeds received from any Asset Sale
(other than Excluded Assets) or any insurance proceeds
received by the Issuer under the Mortgages and shall deliver
any instruments received in respect of such Asset Sale to the
Collateral Agent. The Issuer shall be entitled to apply up to
$2,000,000 cumulatively and in the aggregate of amounts held
in the Investment Account towards Capital Expenditures in
accordance with Section 4.06 of the Indenture. Amounts held in
the Investment Account shall be invested by the Collateral
Agent (provided that if no Event of Default shall have
occurred and be continuing the Collateral Agent shall invest
such amounts only at the written direction of such Obligor) in
Permitted Investments. Cash in the Investment Account, such
instruments and such Permitted Investments shall constitute
additional Collateral hereunder. The Collateral Agent shall
have no liability whatsoever for any investment loss resulting
from investments made at the direction of the Obligors.
Section 3. EFFECTIVENESS. The amendments set forth herein
shall become effective upon (i) the execution and delivery of this Amendment No.
2 by the Obligors and the Collateral Agent, as well as any financing statements,
officers' certificates or opinions of counsel reasonably requested by the
Trustee pursuant to the Security Agreement, the Indenture, or the TIA and (ii)
the satisfaction of each of the conditions set forth in Section 3.01 of the
Second Supplemental Indenture and Amendment to Series B and Series C Senior
Secured Notes of even date herewith.
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Section 4. MISCELLANEOUS. Except as herein provided, the
Security Agreement shall remain unchanged and in full force and effect. Each
Obligor hereby certifies that each of the representations and warranties
contained in the Security Agreement are true and correct in all material
respects as of the date hereof (except to the extent the such representations
and warranties solely relate to an earlier date) and each Obligor expressly
ratifies and confirms the Security Agreement as amended hereby. The liens,
security interests, superior titles, rights, remedies, powers, equities and
priorities under the Security Agreement (the "RIGHTS") are hereby ratified and
confirmed as valid, subsisting and continuing to secure the Obligations. Nothing
contained herein shall in any manner diminish, impair or extinguish any of the
Rights or be construed as a novation in any respect. This Amendment No. 2 may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same amendatory instrument and each of the parties hereto
may execute this Amendment No. 2 by signing any such counterpart. In case any
provision of this Amendment No. 2 shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby. The recitals contained herein shall
be taken as statements of the Issuer, and the Collateral Agent assumes no
responsibility for their correctness. The Collateral Agent makes no
representations as to the validity and sufficiency of this Amendment No. 2 or
the consents of the Requisite Holders in respect thereof. This Amendment No. 2
shall be governed by, and construed in accordance with, the law of the State of
North Carolina without regard to principles of conflicts of law, except to the
extent that perfection of the security interest granted by this Amendment No. 2
is governed by a jurisdiction other than the State of North Carolina; PROVIDED,
HOWEVER, that to the extent not precluded by the laws of the State of North
Carolina, the rights, duties and indemnitees of the Collateral Agent shall be
governed by the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to be duly executed as of the day and year first above written.
LIGGETT GROUP INC.
By
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Name:
Title:
EVE HOLDINGS INC.
By
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Name:
Title:
BANKERS TRUST COMPANY,
as Collateral Agent,
acting on behalf of the
Secured Creditors
By
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Name:
Title: