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1 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) 2 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. Page 2 of 3 3 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 ------------------------------------------ Joselynn D. Van Siclen Vice President and Chief Financial Officer BGLS INC. By: /s/ Joselynn D. Van Siclen ------------------------------------------ Joselynn D. Van Siclen Vice President and Chief Financial Officer Date: February 9, 1998 Page 3 of 3
1 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. 2 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. -2- 3 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. -3- 4 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 ------------------------------------ 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 --------------------------------- 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 --------------------------------- Name: John J. Hannan Title: ACKNOWLEDGED, AGREED & CONSENTED TO WITH RESPECT TO SECTION 7(b): BROOKE GROUP LTD. By /s/ Richard J. Lampen --------------------------------------- Name: Richard J. Lampen Title: Executive Vice President -4-