SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 24, 1998
BELL TECHNOLOGY GROUP LTD.
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(Exact name of registrant as specified in charter)
Delaware 1-14168 13-3781263
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(State or other juris- (Commission (IRS Employer
diction of Incorporation) File number) Identification No.)
295 Lafayette Street, 3rd Floor, New York, New York 10012
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (212) 334-8500
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On April 24, 1998, Bell Technology Group Ltd. (the "Company") entered into
a Purchase Agreement to sell to ING Baring (U.S.) Securities, Inc. (the "Initial
Purchaser"), 160,000 Units. The purchase closed on April 30, 1998. Each Unit
consists of $1,000 principal amount of 13% Senior Notes due 2005 (the "Notes")
and one warrant (a "Warrant") to purchase 3.52 shares of common stock, $0.01 par
value, of the Company (the "Common Stock").
The Notes are senior unsecured obligations of the Company and mature on
May 1, 2005. Interest on the Notes is payable semi-annually in arrears on May 1
and November 1 of each year commencing November 1, 1998. Concurrently with the
closing, the Company deposited with Marine Midland Bank, as Escrow Agent an
amount of U.S. Government Securities (approximately $57 million), that, together
with the income from the investment thereof, will be sufficient to pay, when due
the first six interest payments on the Notes, with any excess to be retained by
the Company.
Each Warrant entitles the holder to purchase 3.52 shares of Common Stock
of the Company at an exercise price of $14.03 per share, subject to certain
anti-dilution provisions. Unless exercised, the Warrants will automatically
expire on May 1, 2005. The 160,000 Warrants, if exercised in full would entitle
the holders thereof to acquire an aggregate of 563,200 shares of Common Stock of
the Company, representing approximately
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10% of the outstanding Common Stock of the Company on a fully-diluted basis.
The foregoing summary of the transaction is qualified in its entirety by
reference to the full text of the exhibits filed with this Report.
The Company intends to use the net proceeds of the offering to expand its
New York SuperPOP facility and to construct and operate SuperPOPs in London and
San Francisco. The Company also intends to use the net proceeds of the offering
to fund potential acquisitions in its target markets. The Company will use the
balance of the net proceeds to increase its sales, marketing, technical and
administrative personnel and to fund working capital needs.
The Units have not been registered under the Securities Act of 1933, as
amended, or any state securities laws, and unless so registered, may not be
offered or sold in the United States except on the PORTAL System or pursuant to
an exemption from the registration requirements of the Securities Act and
applicable state securities laws.
This Report contains forward-looking statements. Because the Company faces
intense competition in a business characterized by rapidly changing technology,
actual results or outcomes may differ materially from any such forward-looking
statements. Information regarding additional factors that may affect such
statements appear in the Company's publicly filed documents, including its
10-KSB for the year ended September 30,
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1997 and the Company's Registration Statement filed with the Securities and
Exchange Commission on November 6, 1997 (see, in particular, "Risk Factors").
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number
4(a) Purchase Agreement between the Company and the Initial
Purchaser, dated April 24, 1998.
4(b) Indenture between the Company and Marine Midland Bank, as
Trustee, dated as of April 30, 1998.
4(c) Form of $160,000,000 13% Senior Note due May 1, 2005.
4(d) Form of Warrant to purchase 3.52 shares of Common Stock
expiring May 1, 2005.
4(e) Warrant Agreement between the Company and Marine Midland Bank,
as Warrant Agent, dated as of April 30, 1998.
4(f) Registration Rights Agreement between the Company and the
Initial Purchaser, dated as of April 30, 1998.
4(g) Warrant Registration Rights Agreement between the Company and
the Initial Purchaser, dated as of April 30, 1998.
4(h) Escrow and Security Agreement between Marine Midland Bank, as
Escrow Agent, Marine Midland Bank, as Trustee, and the
Company, dated as of April 30, 1998.
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SIGNATURES
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.
BELL TECHNOLOGY GROUP LTD.
By Marc H. Bell
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Marc H. Bell, President
and Chief Executive Officer
Dated: May 8, 1998
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EXHIBIT INDEX
Sequentially
Exhibit Description Numbered Page
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4(a) Purchase Agreement between the Company and the Initial
Purchaser, dated April 24, 1998.
4(b) Indenture between the Company and Marine Midland Bank,
as Trustee, dated as of April 30, 1998.
4(c) Form of $160,000,000 13% Senior Note due May 1, 2005.
4(d) Form of Warrant to purchase 3.52 shares of Common
Stock expiring May 1, 2005.
4(e) Warrant Agreement between the Company and Marine
Midland Bank, as Warrant Agent, dated as of April 30,
1998.
4(f) Registration Rights Agreement between the Company and
the Initial Purchaser, dated as of April 30, 1998.
4(g) Warrant Registration Rights Agreement between the
Company and the Initial Purchaser, dated as of April
30, 1998.
4(h) Escrow and Security Agreement between Marine Midland
Bank, as Escrow Agent, Marine Midland Bank, as
Trustee, and the Company, dated as of April 30, 1998.
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