BELL TECHNOLOGY GROUP LTD.
13% SENIOR NOTE DUE 2005, SERIES A
CUSIP NO. 07814VAB8
No. A-1
$160,000,000
Bell Technology Group Ltd., a Delaware corporation (herein called the "Company,"
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of ONE HUNDRED AND SIXTY MILLION
($160,000,000) United States dollars on May 1, 2005, at the office or agency of
the Company referred to below, and to pay interest thereon from the date of
issuance, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semiannually on May 1 and November 1 in each
year, commencing November 1, 1998 at the rate of 13% per annum, subject to
adjustments as described in the second following paragraph, in United States
dollars, until the principal hereof is paid or duly provided for. Interest shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.
The Holder of this Series A Security is entitled to the benefits of the
Registration Rights Agreement between the Company and the Initial Purchaser,
dated April 30, 1998 (the "Registration Rights Agreement"), pursuant to which,
subject to the terms and conditions thereof, the Company is obligated to
consummate the Exchange Offer pursuant to which the Holder of this Security
shall have the right to exchange this Security for 13% Senior Notes due 2005,
Series B (herein called the "Series B Securities") in like principal amount as
provided therein. The Series A Securities and the Series B Securities are
together referred to as the "Securities." The Series A Securities shall rank
pari passu in right of payment with the Series B Securities.
In the event that (a) the Exchange Offer Registration Statement is not filed
with the Commission on or prior to the date specified in the Registration Rights
Agreement, (b) the Exchange Offer Registration Statement has not been declared
effective on or prior to the date specified in the Registration Rights
Agreement, (c) the Exchange Offer is not consummated or a Shelf Registration
Statement is not declared effective, in either case, on or prior to the date
specified in the Registration Rights Agreement, or (d) the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective but
thereafter ceases to be effective or usable in connection with resales of the
Series A Securities during the periods specified in the Registration Rights
Agreement, without being succeeded immediately by a post-effective amendment to
such Registration Statement that cures such failure and that is itself declared
effective within a five Business Day period after filing such post-effective
amendment (each such event referred to in clauses (a) through (d) above, a
"Registration Default"), then commencing on the day following the date on which
such Registration Default occurs, the interest rate borne by the Series A
Securities shall be increased by one-half of one percent per annum for the 90-
day period following such Registration Default, which rate will increase by
one-half of one percent per annum with respect to each subsequent 90-day period
up to a maximum of one and one half percent (1.50%) per annum until cured
("Additional Interest"). Following the cure of all Registration Defaults, the
accrual of Additional Interest will cease and the interest rate will revert to
the original rate.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture hereinafter referred
to, be paid to the Person in whose name this Security (or any Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the April 15 or October 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid, or duly provided for, and interest on
such defaulted interest at the interest rate borne by the Series A Securities,
to the extent lawful, shall forthwith cease to be payable to the Holder on such
Regular Record Date, and may either be paid to the Person in whose name this
Security (or any Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by the Indenture not inconsistent with the requirements of such
exchange, all as more fully provided in the Indenture.
Payment of the principal of, premium, if any, and interest on, this Security,
and exchange or registration of transfer of this Security, will be made at the
office or agency of the Company in The City of New York maintained for that
purpose (which initially will be a corporate trust office of the Trustee located
at 140 Broadway, New York, New York 10005), or at such other office or agency as
may be maintained for such purpose, by wire transfer of immediately available
funds unless otherwise provided in the Indenture. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by the
Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Security shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
Dated: April 30, 1998
BELL TECHNOLOGY GROUP LTD.
By:
----------------
Attest: Name:
Title:
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Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 13% Senior Notes due 2005, Series A referred to in the
within-mentioned Indenture.
MARINE MIDLAND BANK, as Trustee
By:
----------------
Authorized Signatory
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to Section
1012 or Section 1014, as applicable, of the Indenture, check the Box:____
If you wish to have a portion of this Security purchased by the Company pursuant
to Section 1012 or Section 1014 as applicable, of the Indenture, state the
amount (in original principal amount):
$ ------
Date: ____________ Your Signature:_______
(Sign exactly as your name
appears on the other side of this
Security)
Signature Guarantee:__
Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15
(Reverse of Note)
Bell Technology Group Ltd.
13% Senior Note due 2005, Series A
This Security is one of a duly authorized issue of Securities of the Company
designated as its 13% Senior Notes due 2005, Series A (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $160,000,000, issued under and
subject to the terms of an indenture (the "Indenture") dated as of April 30,
1998, between the Company and Marine Midland Bank, as trustee (the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Guarantors, if any, the Trustee
and the Holders of the Securities, and of the terms upon which the Securities
are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the entire
Indebtedness on the Securities and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance with certain
conditions set forth therein.
The Securities are subject to redemption at any time on or after May 1, 2001, at
the option of the Company, in whole or in part, on not less than 30 nor more
than 60 days' prior notice, in amounts of $1,000 or an integral multiple
thereof, at the following redemption prices (expressed as percentages of the
principal amount), if redeemed during the 12-month period beginning on May 1, of
the years indicated below:
Redemption
Year Price
- ---- -----
2001 106.500%
2002 104.333%
2003 102.166%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
rights of Holders of record on relevant record dates to receive interest due on
an Interest Payment Date).
In addition, at any time on or prior to May 1, 2000, the Company may, at its
option,
use the net proceeds of one or more Public Equity Offerings or the sale of
Common Stock (other than Disqualified Stock) of the Company to a Strategic
Investor in a single transaction or in a series of related transactions, to
redeem up to an aggregate of 35% of the aggregate principal amount of Securities
originally issued under the Indenture at a redemption price equal to 113% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the Redemption Date; provided that at least 65% aggregate principal
amount of the initially issued aggregate principal amount of Securities remains
outstanding immediately after the occurrence of such redemption. In order to
effect the foregoing redemption, the Company must mail a notice of redemption no
later than 45 days after the closing of the related Public Equity Offering or
sale of Common Stock to a Strategic Investor and must consummate such redemption
within 60 days of the closing of the Public Equity Offering or sale of Common
Stock to a Strategic Investor.
If less than all of the Securities are to be redeemed, the Trustee shall select
the Securities or portions thereof to be redeemed pro rata, by lot or by any
other method the Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control, each Holder may require the Company
to purchase such Holder's Securities in whole or in part in integral multiples
of $1,000, at a purchase price in cash in an amount equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of purchase, pursuant to a Change of Control Offer in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds received by the
Company from any Asset Sale, which proceeds are not used to permanently repay
Pari Passu Indebtedness of the Company or invested in properties or other assets
that replace the properties and assets that were the subject of the Asset Sale
and which will be used only in an Internet Service Business, exceeds a specified
amount the Company will be required to apply such proceeds to the repayment of
the Securities and certain Indebtedness ranking pari passu in right of payment
to the Securities.
In the case of any redemption or repurchase of Securities in accordance with the
Indenture, interest installments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities of record as
of the close of business on the relevant Regular Record Date or Special Record
Date referred to on the face hereof. Securities (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the Redemption Date.
In the event of redemption or repurchase of this Security in accordance with the
Indenture in part only, a new Security or Securities for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof.
If an Event of Default shall occur and be continuing, the principal amount of
all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain amendments
permitted without the consent of any Holders and certain amendments which
require the consent of all the Holders) as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the Guarantors, if any, and the rights of the Holders under the Indenture and
the Securities and the Guarantees, if any, at any time by the Company and the
Trustee with the consent of the Holders of at least a majority in aggregate
principal amount of the Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of at least a majority in aggregate
principal amount of the Securities (100% of the Holders in certain
circumstances) at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company and the Guarantors, if any, with
certain provisions of the Indenture and the Securities and the Guarantees, if
any, and certain past Defaults under the Indenture and the Securities and the
Guarantees, if any, and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, any Guarantor, if
any, or any other obligor on the Securities (in the event such Guarantor or such
other obligor is obligated to make payments in respect of the Securities), which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on, this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
Certificated securities shall be transferred to all beneficial holders in
exchange for their beneficial interests in the Rule 144A Global Securities or
the Regulation S Global
Securities if (x) the Company notifies the Trustee in writing that the
Depositary is unwilling or unable to continue as depository for such Global
Security and a successor depository is not appointed by the Company within 90
days or (y) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of certificated Series A Securities. Upon any such
issuance, the Trustee is required to register such certificated Series A
Securities in the name of, and cause the same to be delivered to, such Person or
Persons (or the nominee of any thereof). All such certificated Series A
Securities would be required to include the Private Placement Legend.
Series A Securities in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Series A Securities are exchangeable for a like aggregate principal amount
of Securities of a differing authorized denomination, as requested by the Holder
surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of the
Exchange Act, upon the written request of a Holder of a Series A Security, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) to such Holder or to a prospective purchaser of such Series A
Security who such Holder informs the Company is reasonably believed to be a
"Qualified Institutional Buyer" within the meaning of Rule 144A under the
Securities Act, as the case may be, in order to permit compliance by such Holder
with Rule 144A under the Securities Act.
No service charge shall be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security is overdue, and
neither the Company, any Guarantor, the Trustee nor any such agent shall be
affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
Insert Taxpayer Identification No.
(Please print or typewrite name and address including zip code of assignee)
________________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing__________________ attorney to transfer such Security on the books
of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL
CERTIFICATES FOR SERIES A SECURITIES EXCEPT
PERMANENT OFFSHORE PHYSICAL CERTIFICATES]
In connection with any transfer of this Security occurring prior to the date
which is the earlier of the date of an effective Registration Statement or the
end of the period referred to in Rule 144(k) under the Securities Act, the
undersigned confirms that without utilizing any general solicitation or general
advertising that:
[Check One]
______(a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended, provided by Rule
144A thereunder.
or
______(b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions of
transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Security in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 307 of the Indenture
shall have been satisfied.
Date:
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NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every particular,
without alteration or any change whatsoever.
Signature Guarantee:
--------------------
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, as amended,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date:
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NOTICE: to be executed by an authorized signatory