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EXHIBIT 99.2
SECOND SUPPLEMENTAL INDENTURE
AND
AMENDMENT TO SERIES B AND SERIES C SENIOR SECURED NOTES
THIS SECOND SUPPLEMENTAL INDENTURE AND AMENDMENT TO SERIES B
AND SERIES C SENIOR SECURED NOTES (the "SECOND SUPPLEMENTAL INDENTURE AND
AMENDMENT TO NOTES"), dated as of January 30, 1998, is between XXXXXXX GROUP
INC., a Delaware corporation, EVE HOLDINGS INC., a Delaware corporation, and
BANKERS TRUST COMPANY, a New York banking corporation organized under the laws
of the State of New York, as Trustee under the Indenture, dated as of February
14, 1992, between the foregoing parties (as at any time amended or supplemented
or otherwise modified, the "INDENTURE"). Capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Indenture.
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered the
Indenture providing for the issuance of the Series A Senior Secured Notes and
the Series B Senior Secured Notes; and
WHEREAS, pursuant to Section 2 of the Registration Rights
Agreement, all of the Series A Senior Secured Notes have heretofore been
exchanged for Series B Senior Secured Notes; and
WHEREAS, the Indenture was amended by the First Supplemental
Indenture (the "FIRST SUPPLEMENTAL INDENTURE") dated as of January 26, 1994,
pursuant to which the Company issued the Variable Rate Series C Senior Secured
Notes, which Series C Senior Secured Notes have the same terms (other than the
rate of interest) and stated maturity as the Series B Senior Secured Notes; and
WHEREAS, as of the date hereof there are issued and
outstanding under the Indenture $112,612,000 principal amount of the Series B
Senior Secured Notes and $32,279,081 principal amount of the Series C Senior
Secured Notes; and
WHEREAS, the Company desires to amend the Senior Secured
Notes, the Indenture and the Security Agreement to, among other things, extend
the date of the February 1, 1998 mandatory redemption of $37,500,000 aggregate
principal amount of Senior Secured
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Notes, required pursuant to paragraph 2(b)(ii) of the Senior Secured Notes (the
"1998 MANDATORY REDEMPTION") to February 1, 1999; and
WHEREAS, in consideration of the extension of the 1998
Mandatory Redemption, Brooke Group Ltd. ("BGL"), a Delaware corporation, and
BGLS Inc. ("BGLS"), a Delaware corporation, have agreed pursuant to the
Commitment, Contribution and Subordination Agreement, dated as of January 30,
1998, executed by BGL, BGLS and Brooke (Overseas) Ltd. ("BOL") in favor of the
Trustee and the Noteholders (the "COMMITMENT AGREEMENT") that, in the event the
Company shall fail to pay the interest installments in full when due on the
Senior Secured Notes on February 1, 1998 and August 1, 1998 (the "1998 INTEREST
PAYMENTS"), BGL and BGLS shall, at their option, either (i) arrange for loans to
be made to the Company and, if required by the lender thereof, guaranty the
repayment of such loans or (ii) make loans to the Company, which loans shall
constitute Subordinated Indebtedness, in either case, so as to permit the
Company to make such 1998 Interest Payments in full (the "BGL/BGLS COMMITMENT");
and
WHEREAS, BGL and BGLS have agreed pursuant to the Commitment
Agreement, that any right of repayment, reimbursement, contribution or
subrogation of BGL or BGLS in connection with the BGL/BGLS Commitment, along
with any right of repayment, reimbursement, contribution or subrogation of BGL
or BGLS in connection with the guarantee of loans made in connection with the
Company's payment of the August 1, 1997 interest installment, shall be
subordinated in all respects to the prior repayment in full of all amounts
outstanding in respect of the Senior Secured Notes (the "BGL/BGLS
SUBORDINATION"); and
WHEREAS, in connection with the formation of a joint venture
or other entity (the "NEW RUSSIAN ENTITY") to finance the construction of a new
tobacco factory in Russia by Xxxxxxx-Xxxxx Limited, a Russian joint stock
company ("XXXXXXX-XXXXX"), and in consideration of the BGL/BGLS Commitment, the
BGL/BGLS Subordination, the BOL Pledge Agreement (as defined below) and the
Xxxxxxx-Xxxxx Recapitalization (as defined below), the Company has agreed,
pursuant to the Commitment Agreement, to transfer on the Effective Date (as
defined below) its approximately 19.97% ownership interest in, and options to
acquire additional shares of, Capital Stock of Xxxxxxx-Xxxxx (the "XXXXXXX-XXXXX
SALE") to BOL and each of BOL, BGL and BGLS has agreed, pursuant to the
Commitment Agreement, to cancel or convert to equity all Indebtedness of
Xxxxxxx-Xxxxx owed to it (the "XXXXXXX-XXXXX RECAPITALIZATION"); and
WHEREAS, BOL has agreed that, in consideration of the
Collateral Agent's release at the written direction of the Requisite Holders (in
the form of written consent to this Second Supplemental Indenture and Amendment
to Notes), of its existing lien on the Company's interests in Xxxxxxx-Xxxxx, BOL
will pledge to the Collateral Agent pursuant to the Pledge Agreement, dated
January 30, 1998, executed by BOL in favor of the Collateral Agent (the "BOL
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XXXXXX XXXXXXXXX"), sixteen percent (16%) of the fully diluted shares of the
Capital Stock of Xxxxxxx-Xxxxx (the "XXXXXXX-XXXXX SHARES"), after taking into
account the Xxxxxxx-Xxxxx Recapitalization, to secure the Company's obligations
under the Indenture; and
WHEREAS, BOL agrees that, upon the occurrence of an Event of
Default under the Indenture, the Collateral Agent at the request of the
Requisite Holders shall be entitled to direct the Pledgor to cause Xxxxxxx-Xxxxx
or the New Russian Entity, as applicable, to register the Pledged Stock (as
defined in the BOL Pledge Agreement) on the terms set forth in Appendix A to the
BOL Pledge Agreement;
WHEREAS, Section 9.02 of the Indenture provides, among other
things, that the Company, the Guarantors and the Trustee may modify and amend
the Indenture with the consent of the Requisite Holders, which consent has been
obtained; and
WHEREAS, the Company desires to execute this Second
Supplemental Indenture and Amendment to Notes and hereby requests the Trustee
and the Guarantors to join in this Second Supplemental Indenture and Amendment
to Notes for the purpose of amending the Indenture as hereinafter provided; and
WHEREAS, all conditions and requirements under the Indenture
and the TIA necessary to make this Second Supplemental Indenture and Amendment
to Notes a legal, valid and binding instrument have been done, performed and
fulfilled, and the execution and delivery of this Second Supplemental Indenture
and Amendment to Notes has been in all respects duly authorized by the parties
hereto;
NOW THEREFORE, THIS INDENTURE WITNESSETH:
That the Company, in consideration of the consent of the
Requisite Holders referenced above and the premises set forth herein and for
other valuable consideration, the receipt of which is hereby acknowledged,
hereby covenants, declares and agrees with the Trustee and its successors in the
trust under the Indenture as follows:
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ARTICLE ONE
AMENDMENTS TO THE INDENTURE
SECTION 1.01. Section 1.01 of the Indenture shall be amended
by adding the following new definitions (to the extent not already included in
Section 1.01 thereof) and inserting the same in the appropriate alphabetical
locations and amending in their entirety the following definitions (to the
extent already included in Section 1.01 thereof), as follows:
"Asset Sale" means any conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction), directly or indirectly, of any properties and
assets of the Company or any Subsidiary other than in the ordinary course of
business. For the purposes of this Indenture, the term "Asset Sale" shall not
include (i) any conveyance, transfer, lease or other disposition (as aforesaid)
of properties or assets of the Company or any Subsidiary that is governed by the
provisions of Article 5, (ii) any conveyance, transfer, lease or other
disposition (as aforesaid) of any Excluded Assets or (iii) the Xxxxxxx-Xxxxx
Sale.
"BGL" means Brooke Group Ltd., a Delaware corporation.
"BGLS" means BGLS Inc., a Delaware corporation.
"BOL" means Brooke (Overseas) Ltd., a Delaware corporation.
"BOL Pledge Agreement" means the Pledge Agreement, dated
January 30, 1998, executed by BOL in favor of the Collateral Agent, as the same
may be amended, supplemented or modified from time to time in accordance with
its terms.
"Collateral" means, collectively, (i) the "Collateral" as such
term is defined in the Security Agreement, (ii) the "Collateral" as such term is
defined in the BOL Pledge Agreement and (iii) the Real Property and proceeds
thereof that are from time to time subject to the Lien of the Mortgages.
"Commitment Agreement" means the Commitment, Contribution and
Subordination Agreement, dated as of January 30, 1998, executed by BGL, BGLS and
BOL in favor of the Trustee and the Noteholders.
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"Excluded Subsidiary" means any Subsidiary which would (solely
as the result of the ownership by a Person other than the Company or a
Subsidiary of Voting Stock or other equity interest of such Subsidiary) be an
Affiliate of the Company if the Company's direct or indirect ownership of Voting
Stock or other equity interests in such Subsidiary were disregarded.
"Xxxxxxx-Xxxxx Sale" means the sale by the Company to BOL of
its approximately 19.97% ownership interest in, and options to acquire
additional shares of, Capital Stock of Xxxxxxx-Xxxxx in consideration of the
execution and delivery of the Commitment Agreement and the BOL Pledge Agreement.
"Permitted Indebtedness" means, without duplication: (a)
Indebtedness of the Company and its Subsidiaries outstanding on the Initial
Issuance Date; (b) Indebtedness evidenced by the Senior Secured Notes and the
Guarantees; (c) Indebtedness (including guarantees thereof by Subsidiaries)
under the Working Capital Facility; (d) obligations under or pursuant to Raw
Material Purchase Arrangements (including, without limitation, letters of credit
required thereby); (e) intercompany debt obligations between or among the
Company and the Subsidiaries; (f) unsecured Indebtedness of the Company, the
proceeds of which are used by the Company to make the 1998 Interest Payments and
which Indebtedness, if provided by BGL, BGLS, BOL or any of their Affiliates,
other than the Company, is Subordinated Indebtedness; and (g) any renewals,
extensions, substitutions, refundings, refinancings or replacements of any
Indebtedness described in clauses (a) through (c) and (f) above so long as the
aggregate principal amount does not exceed the principal amount of the
Indebtedness so renewed, extended, substituted, refunded, refinanced or
replaced.
"Restricted Investment" means any investment in any Person,
whether by share purchase, capital contribution, loan, advance or otherwise,
including any credit extension constituting Indebtedness of such Person or
guarantee of Indebtedness of such Person, other than: (a) any such investments
in Guarantors by the Company or any other Guarantor or by a Guarantor or any
Subsidiary in the Company; (b) loans and advances to employees of the Company or
any Subsidiary in the ordinary course of business for a proper corporate
purpose; (c) any such investments with respect to hedging the Company's or any
Subsidiary's exposure to foreign currency fluctuations; (d) any such investments
in interest rate swaps, caps or collar agreements or similar arrangements
between the Company or any Subsidiary and a financial institution providing for
the transfer or mitigation of interest risks either generally or under specific
contingencies; and (e) Permitted Investments.
"Second Supplemental Indenture and Amendment to Notes" means
the Second Supplemental Indenture and Amendment to Series B and Series C Senior
Secured Notes, dated as of January 30, 1998 by and among the Company, the
Guarantors and the Trustee.
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"Security Documents" means, collectively, the Security
Agreement, the Mortgages and the BOL Pledge Agreement.
"Subordinated Indebtedness" means unsecured Indebtedness (i)
subordinated by its terms in right of payment to all series of Senior Secured
Notes, (ii) having no principal payment with a stated maturity earlier than
three months subsequent to the stated maturity of the Senior Secured Notes and
(iii) no payment in respect of interest on or principal of which shall be made
so long as any Event of Default shall have occurred and be continuing;
SECTION 1.02. Section 4.03 of the Indenture is hereby amended
in its entirety to read as follows:
SECTION 4.03. LIMITATIONS ON RESTRICTED PAYMENTS. The Company
shall not, and shall not permit any Subsidiary to, directly or
indirectly, (i) declare or pay any dividend on, or make any
distribution on account of, any shares of Capital Stock of the
Company (other than dividends and distributions payable in
shares of Capital Stock of the Company or in rights, warrants
or options to purchase Capital Stock of the Company), (ii)
purchase, redeem or otherwise acquire or retire for
consideration any shares of Capital Stock of the Company or
any option, warrant or other right to acquire any such Capital
Stock, (iii) make any payment of principal of, or redeem,
repurchase, defease or otherwise acquire or retire for
consideration any Subordinated Indebtedness of the Company,
(iv) make any Restricted Investments or (v) make any payment
to BGLS, BGL or BOL in respect of any Indebtedness of the
Company guaranteed by BGLS, BGL or BOL (such payments and any
other actions described in clauses (i), (ii), (iii), (iv) and
(v) collectively, "Restricted Payments").
SECTION 1.03. Section 4.05 of the Indenture is hereby amended
in its entirety to read as follows:
SECTION 4.05. LIMITATION ON INDEBTEDNESS. The Company shall
not, and shall not permit any of its Subsidiaries to, create,
incur, assume or directly or indirectly guarantee or in any
other manner become directly or indirectly liable for the
payment of any
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Indebtedness (including Acquired Indebtedness), other than
Permitted Indebtedness or Subordinated Indebtedness.
SECTION 1.04. Section 4.06 of the Indenture is hereby amended
in its entirety to read as follows:
SECTION 4.06. DISPOSITION OF PROCEEDS OF ASSET SALES. The
Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, make any Asset Sale unless (i) the
Company or such Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to
the Fair Market Value (as determined by the Board of Directors
whose good faith determination shall be conclusive and
evidenced by a board resolution) of the assets subject to such
Asset Sale and (ii) at least 90% of the consideration for any
such Asset Sale consists of cash. The Net Cash Proceeds of and
any instruments received in consideration of any Asset Sale
shall be deposited with the Collateral Agent in accordance
with Section 6.5 of the Security Agreement as additional
Collateral to secure the Senior Secured Notes; provided that
up to $2,000,000, cumulatively and in the aggregate, of such
Net Cash Proceeds may be used by the Company in connection
with the Capital Expenditures described on SCHEDULE I to the
Second Supplemental Indenture and Amendment to Notes. All
proceeds from Asset Sales shall remain subject to the
applicable provisions of the applicable Security Documents and
all sales and other dispositions of Collateral by or on behalf
of or at the direction of the Collateral Agent, which sales or
dispositions constitute an Asset Sale, shall be solely
governed by the provisions of the Security Documents.
SECTION 1.05. Section 4.09 of the Indenture is hereby amended
in its entirety to read as follows:
SECTION 4.09. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The
Company shall not, and shall not permit, cause or suffer any
Subsidiary to, make any loans, advances or investments to or
in any Affiliate of the Company (other than a Subsidiary) or
enter into or materially amend (it being understood that the
mere renewal or extension of an agreement is not a material
amendment)
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any agreement relating to the sale, purchase, lease, transfer,
or other disposition of any assets, property or services from
or to any Affiliate of the Company (other than a Subsidiary
which is not an Excluded Subsidiary); provided that the
foregoing restrictions shall not apply to any of the following
transactions:
(i) The Xxxxxxx-Xxxxx Sale;
(ii) The BGL/BGLS Commitment or any other loans,
guarantees or other credit support provided by Affiliates of
the Company to the Company; provided that any such loans shall
constitute Subordinated Indebtedness and that any right of
repayment, reimbursement, contribution or subrogation of any
such Affiliate of the Company in connection with such
guarantees or credit support shall be subordinated in all
respects to the repayment of the Senior Secured Notes;
(iii) Any investment by any Affiliate of the
Company in Capital Stock of the Company;
(iv) The Corporate Services Agreement, dated as
of June 29, 1990, by and between the Company (formerly Xxxxxxx
& Xxxxx Tobacco Company) and Brooke Group Ltd. (formerly
Xxxxxxx Group Inc.); the Corporate Services Agreement, dated
as of June 29, 1990, by and between Brooke Group Ltd.
(formerly Xxxxxxx Group Inc.) and the Company (formerly
Xxxxxxx & Xxxxx Tobacco Company); the Corporate Services
Agreement, dated as of October 1, 1991, by and between the
Company and Impel Marketing Inc.; the Services Agreement,
dated as of February 26, 1991, by and between Brooke
Management Inc. and the Company; the Agreement, dated June 29,
1990, by and among Brooke Group Ltd. (formerly Xxxxxxx Group
Inc.) and the Company (formerly Xxxxxxx & Xxxxx Tobacco
Company), Eve Holdings Inc., Xxxxxxxxxx Holdings Inc., Impel
Marketing Inc., Chesterfield Assets Inc. and BGI Subsidiary
Corp; the Corporate Services Agreement, dated as of January 1,
1992, by and between BGLS Inc. and the Company; the Agreement,
dated as of October 27, 1986, by and between Brooke Group Ltd.
(formerly Xxxxxxx Group Inc.), L Holdings Inc. and BGLS
(formerly X.X. XxXxx, Inc.); and
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the Agreement, dated as of February 4, 1991, by and between
the Company and NETC/QMC Partnership (in each case as such
agreements are in effect as of the Initial Issuance Date and
as they may be further amended or modified from time to time;
PROVIDED that either (A) such further amendments or
modifications are for the purpose of extending or renewing the
term of any such agreement on substantially similar terms,
with reasonable adjustments to account for inflation on a
basis consistent with past practice or (B) such amendments
otherwise comply with the provisions of this Section 4.09;
PROVIDED, FURTHER, that (a) payments by the Company otherwise
permitted under this clause (iv) shall not exceed $3,600,000
cumulatively and in the aggregate during any calendar year,
commencing January 1, 1998 and (b) in no event shall any
salary be paid by the Company to Xxxxxxx X. XxXxx subsequent
to January 1, 1998;
(v) Any amendment or modification of the
Working Capital Facility to the extent such amendment or
modification provides for the release and termination of any
guarantee of, or the release of any security interest in
collateral securing, the Working Capital Facility, in each
case as provided by any direct or indirect parent of the
Company on or prior to the Initial Issuance Date;
(vi) The payment in respect of pension funding
requirements relating to certain noncontributory defined
benefit retirement plans sponsored by the Company or an
Affiliate of the Company in which employees or leased
employees of the Company are then actively participating and
accruing benefits consistent with past practice;
(vii) The lease by the Company from BGLS of a
G.D. X2 NV Packing Machine for consideration not to exceed
$50,000 per month; and
(viii) The license by the Company to Xxxxxxx-Xxxxx
of the right to use the brand name "Taste of America" within
Russia and within the former CIS countries; provided that such
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license is on terms no less favorable to the Company than
could be obtained in an arms-length transaction.
SECTION 1.06. Section 4.17 of the Indenture is hereby amended
in its entirety to read as follows:
SECTION 4.17. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
The Company shall not and shall not permit any Subsidiary to,
enter into any arrangement with any Person (other than the
Company or any Subsidiary) providing for the leasing by the
Company or any Subsidiary of any real or personal property
(including Collateral) for a term in excess of three years,
which property has been or is to be sold or transferred by the
Company or any Subsidiary to such Person in contemplation of
such leasing, except for sale and leaseback arrangements in
effect on January 30, 1998.
SECTION 1.07. The first sentence of paragraph 2(b) of each of
Exhibit A and Exhibit B to the Indenture and Exhibit A to the First Supplemental
Indenture is hereby amended to read as follows:
The Company will redeem $7,500,000 aggregate principal amount
of Senior Secured Notes on February 1 in each of the years
1993 through 1997, in each case at a redemption price of 100%
of the aggregate principal amount thereof, plus accrued
interest to the redemption date (subject to the provisions of
paragraph 2(c) hereof).
ARTICLE TWO
AMENDMENTS TO THE SERIES B AND SERIES C SENIOR SECURED NOTES
SECTION 2.01. The first sentence of paragraph 2(b) of each
Senior Secured Note is hereby amended to read as follows:
The Company will redeem $7,500,000 aggregate principal amount
of Senior Secured Notes on February 1 in each of the years
1993 through 1997, in each case at a redemption price of 100%
of
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the aggregate principal amount thereof, plus accrued interest
to the redemption date (subject to the provisions of paragraph
2(c) hereof).
ARTICLE THREE
EFFECTIVENESS
SECTION 3.01. The amendments set forth herein shall become
effective (the "EFFECTIVE DATE") upon the Trustee's receipt of each of the
following by February 2, 1998:
(a) fully executed originals of each of this Second
Supplemental Indenture and Amendment to Notes, Amendment No. 2 to Security
Agreement, dated as of January 30, 1998, by and between the Company, the
Guarantors and the Collateral Agent, the BOL Pledge Agreement, the Commitment
Agreement and the BGL Registration Rights Agreement (as defined below), as well
as any Board Resolutions, Officers' Certificates or Opinions of Counsel
reasonably requested by the Trustee pursuant to the Indenture, the TIA, the
Security Agreement, or otherwise;
(b) the February 1, 1998 interest installment in the amount of
$9,662,749.25 payable on the Senior Secured Notes, in immediately available
funds;
(c) written notice from the Company of the contemporaneous
consummation of the Xxxxxxx-Xxxxx Sale on the terms described in the Recitals
hereto;
(d) written notice from the Company, acknowledged by special
counsel to the Noteholder Committee, of the Company's payment in full of all
unpaid reasonable fees and disbursements of special counsel to the Noteholder
Committee, such fees and disbursements not to exceed $250,000, which amount
includes the approximately $150,000 already paid to such special counsel by the
Company;
(e) written notice of the Company's payment in full of all
unpaid reasonable fees and disbursements of counsel to the Trustee incurred
prior to February 1, 1998, such fees and disbursements not to exceed $75,000,
such payment acknowledged by telephone by White & Case;
(f) consents of the Requisite Holders, executed in a form
reasonably acceptable to the Trustee; and
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(g) an opinion of outside counsel to the Company, satisfactory
in form and substance to the Trustee.
SECTION 3.02. Notwithstanding the conditions set forth in
Section 3.01 having been satisfied, the amendments set forth in Section 1.07 and
Article Two hereof shall cease to be effective upon the failure of the Company
to pay either of the 1998 Interest Payments in full, as and when due (taking
into account any applicable grace period) and the Company's obligation under
paragraph 2(b) of each Senior Secured Note to have redeemed $37,500,000 in
aggregate principal amount of Senior Secured Notes by February 1, 1998 shall
thereupon be automatically reinstated.
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ARTICLE FOUR
EFFECTIVENESS FEE
SECTION 4.01. On the Effective Date (or as soon thereafter as
any necessary governmental consents or filings are obtained or made), the
Company shall (i) distribute to each Person that shall have complied with the
provisions of Section 5.01 hereof and was on January 15, 1998 a Holder of Series
B Senior Secured Notes (or pending such Holder's compliance with Section 5.01,
shall reserve for distribution to such Holders and deposit with the Trustee) a
number of shares of common stock of BGL (rounded up to the nearest whole number
of shares) equal to the product of 375,373 shares multiplied by a fraction the
numerator of which is the aggregate principal amount of Series B Senior Secured
Notes held by such Holder on January 15, 1998 and the denominator of which is
the aggregate principal amount of Series B Senior Secured Notes outstanding on
January 15, 1998 and (ii) distribute to each Person that shall have complied
with the provisions of Section 5.01 hereof and was on January 15, 1998 a Holder
of Series C Senior Secured Notes (or pending such Holder's compliance with
Section 5.01, shall reserve for distribution to such Holder and deposit with the
Trustee), a number of shares of common stock of BGL (rounded up to the nearest
whole number of shares) equal to the product of 107,597 shares multiplied by a
fraction the numerator of which is the aggregate principal amount of Series C
Senior Secured Notes held by such Holder on January 15, 1998 and the denominator
of which is the aggregate principal amount of Series C Senior Secured Notes
outstanding on January 15, 1998. Any BGL shares required to be issued to any
such Holder by the preceding sentence (the "BGL SHARES") shall be issued to such
Holder irrespective of whether such Holder shall have delivered a consent to
this Second Supplemental Indenture and Amendment to Notes. The Requisite Holders
and any other Noteholder that agrees to be bound by the Registration Rights
Agreement executed by BGL substantially in the form attached as Exhibit A hereto
(the "BGL REGISTRATION RIGHTS AGREEMENT") shall receive registration rights with
respect to the BGL Shares on the terms set forth in the BGL Registration Rights
Agreement. Any BGL Shares reserved for distribution with the Trustee shall be
held by the Trustee in trust for the benefit of the affected Noteholder pending
such Noteholder's compliance with Section 5.01. Notwithstanding the foregoing,
for the purpose of determining the Persons entitled to receive BGL Shares, Notes
held by the Company or its Affiliates shall not be deemed "outstanding", and
accordingly, BGL Shares shall not be issued in respect of any Senior Secured
Notes held by the Company or its Affiliates. The Trustee makes no representation
with respect to, and shall have no liability in connection with, the validity,
value or enforceability of the Effectiveness Fee.
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ARTICLE FIVE
NOTATION OF NOTES
SECTION 5.01. Pursuant to Section 9.05 of the Indenture, as a
precondition to the payment of the effectiveness fee referenced in Section 4.01,
the Trustee shall request each of the Noteholders to deliver its Senior Secured
Notes to the Trustee for notation by the Trustee as follows:
THIS SECURITY HAS BEEN MODIFIED, INCLUDING THE EXTENSION OF
THE FEBRUARY 1, 1998 MANDATORY REDEMPTION OF SENIOR SECURED
NOTES TO FEBRUARY 1, 1999, BY THE TERMS AND CONDITIONS OF THE
SECOND SUPPLEMENTAL INDENTURE AND AMENDMENT TO SERIES B AND
SERIES C SENIOR SECURED NOTES DATED AS OF JANUARY 30, 1998.
ARTICLE SIX
MISCELLANEOUS
SECTION 6.01. Except as otherwise provided herein, the
Indenture, the Guarantee and the Senior Secured Notes shall remain unchanged and
in full force and effect.
SECTION 6.02. The parties may sign any number of copies of
this Second Supplemental Indenture and Amendment to Notes. This Second
Supplemental Indenture and Amendment to Notes may be executed in two or more
counterparts, each of which shall be an original, but all of them together
represent the same agreement.
SECTION 6.03. The laws of the State of New York shall govern
this Second Supplemental Indenture and Amendment to Notes without regard to
principles of conflicts of law. The Company, the Guarantors and the Noteholders
agree to submit to the jurisdiction of the state and federal courts located in
the Borough of Manhattan of the State of New York in any action or proceeding
arising out of or relating to this Second Supplemental Indenture and Amendment
to Notes.
SECTION 6.04. In case any provision of this Second
Supplemental Indenture and Amendment to Notes 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.
SECTION 6.05. The captions of this Second Supplemental
Indenture and Amendment to Notes are for convenience only and shall not affect
the construction hereof.
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SECTION 6.06. The recitals contained herein shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
their correctness.
SECTION 6.07. The Trustee makes no representation as to the
validity or sufficiency of this Second Supplemental Indenture and Amendment to
Notes or the consents of the Holders thereto.
SECTION 6.08. All agreements of the Company and the Guarantors
in this Second Supplemental Indenture and Amendment to Notes shall bind their
respective successors. All agreements of the Trustee in this Second Supplemental
Indenture and Amendment to Notes shall bind its successors.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture and Amendment to Notes to be duly executed all as of the
date first written above.
XXXXXXX GROUP INC.
By:
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Name:
Title:
EVE HOLDINGS INC.
By:
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Name:
Title:
BANKERS TRUST COMPANY,
as Trustee
By:
-------------------------------------
Name:
Title:
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ACKNOWLEDGED, AGREED AND CONSENTED TO:
BROOKE GROUP LTD.
By:
----------------------------------
Name:
Title:
BGLS INC.
By:
----------------------------------
Name:
Title:
BROOKE (OVERSEAS) LTD.
By:
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Name:
Title:
