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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
JOINT CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): FEBRUARY 6, 1998
BROOKE GROUP LTD. BGLS INC.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
1-5759 33-93576
(Commission File Number) (Commission File Number)
51-0255124 13-3593483
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
100 S.E. SECOND STREET 100 S.E. SECOND STREET
MIAMI, FLORIDA 33131 MIAMI, FLORIDA 33131
(Address of principal executive (Address of principal executive
offices including Zip Code) offices including Zip Code)
305/579-8000 305/579-8000
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
(NOT APPLICABLE) (NOT APPLICABLE)
(Former name or former address, (Former name or former address,
if changed since last report) if changed since last report)
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ITEM 5. OTHER EVENTS.
On February 6, 1998, BGLS Inc. entered into a further
amendment to the previously reported Standstill Agreement and Consent, a copy of
which is attached hereto as Exhibit 99.1 and incorporated herein by reference,
with the holders of $97,239,000 principal amount of BGLS Inc.'s 15.75% Senior
Secured Notes due 2001 which extended the termination date of such agreement
with respect to such holders to March 2, 1998. On that date, the holder of
$97,551,000 principal amount of the BGLS Notes, who was previously a party to
the Standstill Agreement and Consent, was paid its pro rata share of the July
31, 1997 interest payment on the BGLS Notes.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
The following Exhibits are provided in accordance with the
provisions of Item 601 of Regulation S-K and are filed herewith unless otherwise
noted.
Exhibit Index
99.1 Amendment to the Standstill Agreement and Consent, dated as of
February 6, 1998, among BGLS Inc., AIF II, L.P. and Artemis America
Partnership.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BROOKE GROUP LTD.
By: /s/ Joselynn D. Van Siclen
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Joselynn D. Van Siclen
Vice President and Chief Financial Officer
BGLS INC.
By: /s/ Joselynn D. Van Siclen
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Joselynn D. Van Siclen
Vice President and Chief Financial Officer
Date: February 9, 1998
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EXHIBIT 99.1
AMENDMENT TO STANDSTILL AGREEMENT AND CONSENT
This Amendment to Standstill Agreement and Consent, dated as of
February 6, 1998 ("AMENDMENT"), among BGLS INC., a Delaware corporation (the
"COMPANY"), AIF II, L.P., a Delaware limited partnership ("AIF II") and ARTEMIS
AMERICA PARTNERSHIP, a Delaware partnership (as successor to Artemis America
LLC, a Delaware limited liability company) (collectively with AIF II, the
"REMAINING PARTICIPATING HOLDERS") amends the Standstill Agreement and Consent
among the Company, the Remaining Participating Holders and TORTOISE CORP., a New
York corporation ("TORTOISE") dated as of August 28, 1997 (the "STANDSTILL
AGREEMENT"). Capitalized terms not otherwise defined herein shall have the
meanings specified in the Standstill Agreement.
WHEREAS, Tortoise has made a July Interest Amount Demand with respect
to Tortoise's pro rata share of the July Interest Amount and has requested that
the Company make all future interest payments to Tortoise in accordance with the
terms of the Indenture;
WHEREAS, Tortoise has also requested that it no longer be subject to
the Standstill Agreement or a party to further amendments to the Standstill
Agreement;
WHEREAS, the Company has agreed to make such interest payments to
Tortoise and release Tortoise from the Standstill Agreement;
WHEREAS, the Company has requested that the Remaining Participating
Holders extend the termination date of the Standstill Agreement and agree to the
release of Tortoise from the Standstill Agreement; and
WHEREAS, the Remaining Participating Holders have agreed to such an
extension and release on the terms and conditions contained in this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreement of the parties contained in this Amendment, the parties
hereto agree as follows:
1. RELEASE OF TORTOISE FROM STANDSTILL AGREEMENT. The Company and the
Remaining Participating Holders hereby agree that Tortoise shall be released
from its obligations under the Standstill Agreement.
2. AMENDMENT TO SECTION 7. Section 7 of the Standstill Agreement is
hereby amended by deleting the date "February 6, 1998" contained in clause (iv)
of such section and replacing it with the date "March 2, 1998".
3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT. This
Amendment shall become effective upon the execution and delivery of this
Amendment by the Company and each of the Remaining Participating Holders.
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4. ABSENCE OF WAIVER. The parties hereto agree that, except to the
extent expressly set forth herein, nothing contained herein shall be deemed to:
(a) be a consent to, or waiver of, any Default or Event of Default;
(b) prejudice any right or remedy which any of the Remaining
Participating Holders may now have or may in the future have under the
Indenture, the Series B Securities or otherwise, including, without limitation,
any right or remedy resulting from any Default or Event of Default; or
(c) constitute a waiver of the rights of any of the Remaining
Participating Holders under Section 2.12 of the Indenture.
5. REPRESENTATIONS. Each party hereto hereby represents and warrants to
the other parties that:
(a) such party is a corporation or partnership, as applicable, duly
organized, validly existing, and in good standing under the laws of the state of
its incorporation or formation, as applicable;
(b) the execution, delivery and performance of this Amendment by such
party is within its corporate or partnership powers, as applicable, has been
duly authorized by all necessary corporate or partnership action, as applicable,
has received all necessary consents and approvals (if any shall be required),
and does not and will not contravene or conflict with any provisions of law or
of the charter or by-laws, or partnership agreement, as applicable, of such
party or of any material agreement binding upon such party or its property; and
(c) upon its effectiveness under Section 3, this Amendment constitutes
the legal, valid and binding obligation of such party, enforceable against it in
accordance with its terms.
In addition, the Company represents and warrants that to the best of its
knowledge, except as set forth in the Standstill Agreement no Default or Event
of Default under the Indenture has occurred and is continuing.
6. CONTINUING EFFECT, ETC. Except as expressly provided herein, the
Company hereby agrees that the Standstill Agreement, the Indenture and the
Series B Securities, shall continue unchanged and in full force and effect, and
all rights, powers and remedies of the Remaining Participating Holders
thereunder and under applicable law are hereby expressly reserved.
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7. EXPENSES.
(a) The Company hereby agrees to reimburse each of the Remaining
Participating Holders for their reasonable attorneys fees and expenses incurred
in connection with this Amendment.
(b) The Company agrees that an actual or threatened or potential
claim, action, suit or proceeding against or affecting an Indemnitee (as defined
in the Exchange Agreement dated as of November 21, 1995 among inter alia the
Company and the Remaining Participating Holders) that at any time results from,
relates to or arises out of the execution, delivery or performance by the
Remaining Participating Holders of this Amendment is deemed to be an
Indemnification Event (as defined in the Exchange Agreement).
8. MISCELLANEOUS.
(a) This Amendment may be executed in any number of counterparts and
by the different parties on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same agreement.
(b) This Amendment shall be a contract made under and governed by the
laws of the State of New York.
(c) This Amendment shall be binding upon the Company, the Remaining
Participating Holders and their respective successors and assigns, and shall
inure to the benefit of the Company, the Remaining Participating Holders and
their respective successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized representatives as of the date
first above written.
BGLS INC.
By /s/ Richard J. Lampen
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Name: Richard J. Lampen
Title: Executive Vice President
AIF II, L.P.
By APOLLO ADVISORS, L.P.
Managing General Partner
By APOLLO CAPITAL MANAGEMENT, INC.
General Partner
By /s/ John J. Hannan
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Name: John J. Hannan
Title:
ARTEMIS AMERICA PARTNERSHIP
By LION ADVISORS, L.P.
Attorney-in-Fact
By LION CAPITAL MANAGEMENT, INC.
General Partner
By /s/ John J. Hannan
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Name: John J. Hannan
Title:
ACKNOWLEDGED, AGREED & CONSENTED TO
WITH RESPECT TO SECTION 7(b):
BROOKE GROUP LTD.
By /s/ Richard J. Lampen
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Name: Richard J. Lampen
Title: Executive Vice President
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